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Managing an IVA

Redundancy during an IVA


Being made redundant or losing your job while on an individual voluntary arrangement (IVA) can be worrying. Redundancy can happen to anyone, and affects many aspects of your life.

Your IVA provider is here to support you through any upheaval. However, there are steps you can take to give yourself some clarity over the situation, and make the change in circumstances easier to deal with. 

But, while it’s normal to still get letters or emails chasing the money you owe, if you receive any threatening debt enforcement action, such as from bailiffs or about a County Court judgment (CCJ), you should contact us or your IVA supervisor as soon as possible.

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Let your IVA provider know you've been made redundant

You may be anxious over how your IVA provider will react if you tell them you've been made redundant. The good news is that if you’re awarded any redundancy funds, you’re allowed to keep enough money to pay your household bills and your IVA payments while looking for another job.

Under the terms of your IVA, you’re able to keep six months’ worth of your regular take-home pay from any redundancy settlement received.

For example, if your monthly take-home pay was £1,000, you’d be able to keep £6,000 (six months' take-home pay) to cover your household bills and maintain your IVA payments. Any money received over this amount will need to be paid into your IVA.

If you do find work within the six-month period, it’s likely that a further proportion of the redundancy funds will need to be paid into your IVA.

Contact your IVA provider for advice as soon as your redundancy is confirmed. If you begin working again, please let them know as soon as possible so they can review your situation.

If we’re your IVA provider, please get in touch with us as soon as possible. If you’re worried about speaking to us, please know that we’re here to support you however we can.

Do your research on redundancy rights

Even if you've not yet been made redundant, or it's just a rumour at this point, it's still worth knowing what your rights are, just in case.

If you've been made redundant, you’ll need to understand your redundancy rights as well as what your options are. You can also use our online benefits calculator to see if you're entitled to any benefits. If you live alone, you may qualify for council tax benefit.

Review and update your budget

Keeping on top of your living expenses while looking for a new job is crucial. Hopefully, you'll find another job as soon as possible after being made redundant. However, there are other factors such as a lack of the type of job you're looking for, or changes in the economy, that you need to be mindful of.



Take a fresh look at your budget, and consider how you could save money on your living costs and household bills. For example, you could:





Looking for more money-saving ideas?

On our MoneyAware blog, you'll find lots of clever ideas to help save money after being made redundant, such as:








Make sure to sign up to our MoneyAware newsletter for even more great tips sent straight to your inbox every month!

Could I take out some credit to help me through my redundancy?

If you're on an IVA, you must not take out credit without speaking to your IVA provider first. There are rules over using credit cards and loans during an IVA. You're not allowed more than £500 credit from any lender without asking your insolvency practitioner (IP) for their permission first. This includes:



  • Credit cards 
  • Overdrafts 
  • Personal loans 
  • Payday loans (and other products from commercial lenders) 
  • Borrowing money from family or friends 




If you take out credit before checking with your IVA provider, you'll be in breach of the terms of your IVA. This could lead to your IVA failing, in which case you'd need to consider other debt solutions.

What happens if I can no longer afford my IVA after redundancy?

Once you complete a review with your IVA provider, they’ll be able to tell you if it's still the most suitable debt solution for your situation. If it’s not, you'll be given the option to explore other debt solutions. 

You should also consider any benefits or risks with other debt solutions before deciding what to do next. Please remember that your IVA provider knows that changes happen in life, and they'll do all they can to support you.