Phone contracts with an IVA, CCJ, default or bankruptcy

Can you get a phone contract with an IVA?

Possibly, but the first question is not whether a network will accept you. It is whether your IVA allows it. An IVA is a legally binding agreement with your creditors, and while it runs you agree not to take out new credit without permission.

Most pay monthly deals with a handset include credit. O2, for example, splits its bill into an Airtime Plan and a Device Plan, and the Device Plan is a credit agreement regulated by the FCA. Many handsets cost more than £500 in total, which matters for the IVA rule in the next section.

Even with your supervisor's consent, approval is not certain. Your IVA shows on your credit file for 6 years from the date it starts, and each network or retailer makes its own lending decision. It helps to check your credit file before you apply, so you know what a lender will see.

This guide covers the rules in England and Wales. Scotland has different debt solutions, covered in the section on bankruptcy below. It is general information, not debt advice.

Do you need your IVA supervisor's permission for a phone contract?

If your IVA uses the standard terms of the IVA Protocol 2025, yes, for anything over the limit. The terms say: "During the arrangement, you must not obtain any credit greater than £500 without the prior written approval of your Supervisor, except for public utilities, insurance policies or other contractual payments as provided for in your income and expenditure."

Taking credit over £500 without consent is a breach of the arrangement. A breach can lead to your IVA being ended, and if that happens your creditors can chase you again, including for interest and charges that were frozen.

The terms do not say how a phone contract is treated. A monthly bill that is already in your agreed budget may count as a contractual payment, but a new handset credit agreement is a different thing. Do not guess. Ask your IVA supervisor, in writing, before you apply for any phone contract, SIM-only plan or upgrade.

Not every IVA uses the Protocol. Check your proposal, or ask your supervisor, which terms apply to you. Your supervisor is the insolvency practitioner who runs your IVA.

• Tell your supervisor what you want: the network, the monthly cost, the length and the total cost of any handset credit.
• Explain why you need it, for example your current phone has broken.
• Wait for written approval before you apply.
• If you are refused, a cheaper option such as pay as you go or a refurbished phone may still fit your budget.

Can you get a phone contract with a CCJ?

You can apply. A CCJ does not stop you by law, but it is on your credit file and lenders use it when they decide whether to give you credit. Experian lists mobile phone contracts among the types of credit a judgment can make harder to get.

A CCJ stays on the Register of Judgments, Orders and Fines, and on your credit file, for 6 years. If you pay the full amount within one month, you can get it removed from the register. If you pay after that, you can get it marked as satisfied. It still stays for the full 6 years, but anyone searching can see you paid, and lenders may view that more favourably than an unpaid judgment.

The missed payments or default that led to the CCJ can stay on your file separately. After 6 years, the CCJ should drop off your credit file automatically. In Scotland the equivalent court order is called a decree, and it affects your credit file in the same way.

How long do defaults, CCJs, IVAs and bankruptcy stay on your credit file?

Most negative records stay for 6 years. A default stays for 6 years from the date of default, whether or not you pay the debt. Paying it off will mark it as satisfied, which can look better to a lender, but it does not remove it early.

A debt management plan (DMP) is not a formal insolvency, so it has no fixed record of its own. Some creditors ask for a note to be added to your file, and reduced payments can still show as missed. That can make credit harder to get during the plan and for some time after.

You can get a free copy of your credit report from the credit reference agencies, including Experian, Equifax and TransUnion. It is worth doing before any application, so you know what a network will see.

Can you get a phone contract while bankrupt, on a DRO or after discharge?

While you are bankrupt in England and Wales, you must not borrow £500 or more without telling the lender you are bankrupt. Citizens Advice says breaking this rule is a criminal offence. The Insolvency Act counts hire purchase and conditional sale as credit, so a handset on credit can count too. Ask the official receiver or your trustee before you apply.

Most people are discharged from bankruptcy automatically after 12 months. The disclosure rule then ends, unless a bankruptcy restrictions order extends it. The bankruptcy stays on your credit file for 6 years from the bankruptcy date, so a new contract can still be hard to get after discharge.

A DRO normally lasts 12 months. During that time you must not get credit of £500 or more without telling the lender you have a DRO. The DRO stays on your credit file for 6 years.

Scotland has its own system, run by the Accountant in Bankruptcy. Bankruptcy there is also called sequestration, and you are normally discharged one year after it is awarded. The closest thing to an IVA is a protected trust deed. The rules on new credit differ, so ask your trustee or a debt adviser in Scotland before you apply for any contract.

What happens to your existing phone contract in an IVA, bankruptcy or DRO?

Tell whoever handles your debt solution about every phone contract you have, including the handset and airtime parts. What happens next depends on the solution and on whether you are behind with payments.

IVA: your insolvency practitioner drafts a budget of your household income and outgoings using the Standard Financial Statement. A phone bill you keep paying normally sits in that budget. Arrears may be treated as a debt. Ask your practitioner how your contract will be handled.

Bankruptcy: the official receiver tells your phone, energy and water suppliers. They may ask for security, such as a deposit or a guarantor. Phone costs are one of the expenses your trustee allows for when working out what you can afford.

DRO: official guidance treats mobile phone costs, both airtime and handset, as an allowable expense. Only payments already in default are listed as a debt, which helps avoid the provider ending a contract you want to keep.

DMP: StepChange says current landline, internet and mobile phone contracts cannot be included in a DMP. Cancelled phone contracts can.

What are the lower-risk phone options during a debt solution?

If your aim is simply to have a working phone and keep your debt solution on track, you do not need a new handset contract. These options involve less or no new borrowing. Check any new monthly cost against your agreed budget first.

None of these are debt advice. If you are unsure whether something fits your IVA, bankruptcy or DRO, ask your supervisor, trustee or a free debt adviser before you commit.

• Pay as you go: you pay before you use it, so there is no ongoing credit and you can stop at any time.
• SIM-only plans: no handset credit, and some networks sell rolling monthly plans without a credit check. Ask your supervisor first if you are in an IVA.
• Keep your current phone: once a handset is paid off, a SIM-only plan means you pay for airtime only.
• Refurbished or SIM-free phones bought outright: no credit agreement, if the cost fits your budget and your debt solution allows it.

Where can you get free debt advice?

Free, confidential debt advice is available across the UK. You should not need to pay for it. An adviser can look at your whole situation, including whether a phone contract fits your debt solution.

If you are in an IVA, your supervisor is the first person to ask about new credit. A free adviser can help if you are unsure what to ask or are struggling with your payments.

• MoneyHelper: free guidance and a debt advice locator to find a free adviser.
• StepChange Debt Charity: online advice at any time, or call 0800 138 1111.
• National Debtline: call 0808 808 4000.
• Business Debtline: for people who are self-employed, call 0800 197 6026.
• Citizens Advice: free advice online or from your local Citizens Advice.