Can You Sell Your House With an IVA? What Happens to the Money
Published 6th November 2026·Updated 6 November 2026
Reviewed by: Reviewed for accuracy November 2026
You can sell your house during an IVA, but you must inform your insolvency practitioner (IP) before you agree anything with an estate agent. Any profit from the sale is treated as a windfall and will, in most cases, be paid into your IVA. Selling without telling your IP first is a serious breach of your arrangement.
The short answer
What you need to know before selling your house with an IVA:
- You must notify your IP before the sale is agreed, not after.
- Equity released from the sale is treated as a windfall - most of it will go into the IVA.
- You cannot quietly pocket the profit and continue paying monthly contributions as normal.
- Buying a new property while the IVA is active is very difficult, as it requires new credit.
- If the sale proceeds clear your IVA in full, your IP can close the arrangement early.
Do you need your IP's permission to sell your house?
You do not legally need your IP's permission to sell - your home is not locked inside the IVA. However, your IVA terms require you to report any significant change in your financial position, and a house sale is exactly that. If you proceed without notifying your IP, you risk failing the arrangement.
The right approach is to contact your IP as soon as you are seriously considering a sale. They will explain how the proceeds will be treated under your specific IVA terms, which vary between arrangements. Do not wait until exchange of contracts - give your IP time to calculate the impact before you commit.
What happens to the money when you sell?
The equity from your sale (the difference between the sale price and what you owe on your mortgage) is treated as a windfall under your IVA. The standard rule is that your IP can require you to pay the full windfall - or the full amount above a small retention - into the IVA.
This can significantly change how long your IVA lasts. If the equity from your sale is large enough to pay off all your included debts plus the IP's fees, your IP should close the IVA early with a full settlement. If the equity only partially covers the remaining debt, you will pay that amount into the IVA and continue making monthly payments for the remainder of the term.
| Equity from sale | Likely outcome |
|---|---|
| Less than a few hundred pounds | May retain in full; IP has discretion |
| Enough to repay a portion of the IVA | Paid into IVA; monthly payments continue |
| Enough to repay IVA in full | IP closes the IVA early - certificate of completion issued |
| None (negative equity) | Sale proceeds go entirely to mortgage lender; IVA continues unchanged |
Can you buy another property while your IVA is running?
Buying a new property while your IVA is active is very difficult for two reasons. First, a mortgage is a form of new credit. During an IVA, you cannot take on new credit of more than £500 without your IP's permission. Second, most mortgage lenders will not approve a mortgage application while an IVA appears on your credit file.
If you need to move to a rental property after selling, that is more straightforward. Renting does not require new credit in the same way. You will still need to pass a letting agent's credit check, and an active IVA may cause some landlords to decline you, but this is a more realistic option than buying.
What if the sale is not your choice?
If your mortgage lender is forcing a repossession, the proceeds are applied first to clear the outstanding mortgage balance. Any remaining equity after the mortgage is repaid must be reported to your IP. If there is no equity after repossession costs, the IVA continues on its existing terms.
If you are considering selling because you can no longer afford the mortgage, contact your IP before you do anything else. There may be options to vary your IVA payments to help you keep up with your mortgage in the short term.
How does this differ from the final-year remortgage?
Your IVA agreement probably includes a clause requiring you to attempt a remortgage in the final year to release equity. That is a different scenario from voluntarily selling. The remortgage clause asks you to release equity while remaining in the property; selling means leaving the property entirely and handing the full equity proceeds to the arrangement.
If you are thinking of selling specifically to avoid the remortgage clause, speak to your IP. The two are not equivalent, and your IP will assess the sale proceeds using the same rules that govern the equity release.
FAQ
Can I sell my house without telling my IP during an IVA?
No. You are required to disclose any material change in your financial circumstances to your IP. A house sale is a material change. Failing to disclose it is a breach of your IVA terms and could cause the arrangement to fail. Always inform your IP before agreeing a sale.
Will the whole profit from the sale go into the IVA?
In most cases, yes - the equity is treated as a windfall and paid into the arrangement. The exact amount depends on your IVA terms. Some arrangements allow you to retain a small amount for removal costs and setting up a new rental. Ask your IP for the specific terms in your proposal.
What happens if my house sale closes the IVA?
If the equity from the sale is enough to repay all your included debts and the IP's outstanding fees, your IP will issue a certificate of completion. The IVA closes early. This is a good outcome - your debts are legally written off and the arrangement ends.
Can I rent after selling my house during an IVA?
Yes. Renting does not require new credit in the same way a mortgage does, so it is not restricted by the IVA. Some letting agents may carry out a credit check and decline you because of the IVA on your file, but private landlords are often more flexible. A larger deposit or a guarantor can improve your chances.
Does selling the house affect the Insolvency Register listing?
No. Your IVA listing on the Individual Insolvency Register is unaffected by a house sale. It remains listed until the IVA is completed and then removed three months after completion. The register is a public record maintained by the Insolvency Service.
What if there is no equity in my house when I sell?
If your sale price equals or is less than your outstanding mortgage, there is no equity to report. The IVA continues on its current terms. You still need to inform your IP of the sale, but no windfall payment will be required. Keep records of the final sale statement to show your IP.