Is Renting A Property Possible With An IVA?
When entering into an IVA, it’s natural to be concerned about the potential impact on your home, whether you own or rent the property. Before agreeing to any IVA, it’s crucial to determine how it may affect your home and assets.
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This understanding can provide peace of mind and a clear picture of the IVA process. IVA Helpline will provide essential information about renting during an IVA in this guide. We’ll cover the effects on your current rental property, the possibility of renting a new property while under an IVA, the impact on future rental properties, and the potential for obtaining a mortgage after completing an IVA.
An IVA (Individual Voluntary Arrangement) is only applicable for residents in England, Wales, and Northern Ireland.
Will an IVA affect you renting a property?
In most situations, entering an IVA does not affect your current rental agreement, allowing you to maintain occupancy in your present property without any issues. As long as you can manage both the rent and IVA payments, there should be no cause for concern.
While drafting your IVA proposal, your Insolvency Practitioner (IP) will consider all monthly expenses, including rent, to determine a manageable repayment amount. This ensures you won’t face difficulties in covering your monthly expenditures.
Nonetheless, reviewing your rental agreement before committing to any debt solution is crucial, as there may be a clause prohibiting insolvency during your tenancy.Check if you qualify
Will my landlord be told about my IVA?
Upon entering an IVA, your landlord is not directly notified about the agreement. However, your information will appear on a public record called the Individual Insolvency Register.
Although accessible to the public, this register is typically only examined by creditors and credit reference agencies, and it is not visible in standard online name searches. As a result, it is not likely that your landlord will discover your IVA unless you begin to fall behind on rent payments and accumulate arrears.
It is essential to note that if you include current rent arrears in your IVA, your landlord will be informed and might be hesitant to renew your tenancy agreement.
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Our trained advisors are here to help, so if you think an IVA proposal is one of the best debt solutions for you, don’t hesitate to call us on 0800 464 7235 to speak to one of our trained debt advisors or click below to see if you qualify…Check if you qualify
Can I rent a new property during an IVA?
It’s well-known that an Individual Voluntary Arrangement (IVA) or other debt solutions can negatively affect your credit score, potentially influencing your approval for a new rental property during the agreement. However, this is typically only a concern if your landlord conducts credit checks before signing a tenancy agreement.
When seeking a new rental property during an IVA, being transparent about your financial situation with potential landlords is crucial. By doing so, you can reassure them of your ability to make monthly payments and demonstrate your honesty.
If you plan to rent with someone who is not in an IVA or have a guarantor willing to support your application, this could increase your chances of acceptance. Additionally, before beginning your search for a new rental property, consider whether you can afford the expenses associated with moving, such as security and rent deposits.
Staying in your current rental agreement until the IVA concludes might be a more financially sensible option in the long run.
Will an IVA affect any future rental properties?
Typically, an IVA term lasts for five years, but it remains on your credit report for six years from the date of approval. This situation may make securing approval for another rental property challenging during that period.
Once the six-year mark has passed and your IVA is removed from your credit report, you might still be questioned about your debt history. However, obtaining approval for a rental property generally becomes easier.
At this point, you can begin to rebuild your credit rating. If you can demonstrate a history of being a responsible tenant and consistently making monthly rent payments, you should not encounter any issues when renting a property.Check if you qualify
Can I get a mortgage after an IVA?
Renting a property and obtaining a mortgage are common concerns for individuals with IVAs. However, if you’ve successfully completed an IVA and made your monthly payments without any issues, it is possible to secure a mortgage.
Keep in mind that your financial circumstances and the reasons for your initial debt will play a role in this process. Most financial experts recommend waiting until your IVA is removed from your credit report and your credit history has improved before applying for a mortgage, as this can increase your chances of approval.
Factors to Consider with IVAs and Mortgages
Even after your IVA is removed from your credit report, many lenders will inquire about your financial history and any recent debt solutions. In such cases, it’s crucial to be transparent and provide an explanation for your IVA.
Some individuals opt to begin their mortgage search with specialist mortgage lenders experienced in assisting those with past IVAs in finding the best mortgage deals.
If you plan to apply for a mortgage once your IVA concludes, it’s essential to take steps to improve your poor credit rating as soon as you can. Strategies for credit improvement may include:
- Establishing a regular budget
- Obtaining a credit card with a small limit and paying it off consistently
- Periodically checking and updating your credit record with accurate information
By following these guidelines, you can better navigate the mortgage application process and increase your chances of success.Check if you qualify
Where can I get more advice on IVA’s, and the debt help available?
Explore your financial options and receive the assistance you need to manage your debt by reaching out to us at IVA Helpline. Call us now at 0800 464 7235 or click the ‘check if you quality’ button.