How to Use a Credit Card in an IVA

Individual voluntary arrangements, also known as IVA, is a debt management practice used in Britain. It is similar to debt management plans in the United States. A third party manages the plan, receives the payments and distributes the money among all of the creditors. Many IVAs prevent the debtor from obtaining and using credit cards, but you can get special dispensation in specific circumstances, especially if you are self-employed.

Instructions

1

Read the terms of your individual voluntary arrangement. The arrangement specifies whether you are allowed to use credit cards or apply for new credit while you are paying off your existing debts. In almost all cases, the default agreement does not permit the use of credit cards while you are paying off the IVA.

2

Talk to your IVA advisor about your specific circumstances. Self-employed individuals and those running small businesses may be allowed to have a small credit line that can be used while in an IVA. The insolvency practitioner must agree to allow you to use or apply for a credit line in this situation, and the limit maxes out at 500.

3

Keep track of the expenses that you are using the credit card for. Attempt to pay this amount in full as you receive payment or reimbursement for your business expenses. You do not want to add to your debt as you are attempting to pay off the rest of your debt under the IVA.