Will An IVA Affect My Ability To Travel Abroad?

Author Name Chris Richards Article date May 11, 2023

While participating in an Individual Voluntary Arrangement (IVA), there are no restrictions preventing you from enjoying a holiday or travelling for business or leisure.

Looking to apply for an IVA?

Looking to apply for an IVA?

At IVA Helpline, we understand that it’s not necessary for you to be entirely accountable to your creditors. As such, you maintain the freedom to decide how to allocate your funds effectively.

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What is an IVA?

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors, enabling you to repay a portion of your unsecured debt through a series of monthly payments or a one-time lump sum.

The IVA Helpline can help set up an IVA, but it must be managed by an Insolvency Practitioner (IP) who will supervise the entire process and liaise with your creditors to ensure they receive their share of the payments each month.

Once your IVA is initiated, it will be recorded on your credit file for six years from the approval date, during which your credit rating will be negatively affected, and obtaining further credit products, such as loans or mortgages, may be challenging.

After completing monthly payments for five years – or six years if you have missed payments or taken a payment break – your remaining debt will be discharged, allowing you to begin rebuilding your credit.

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Are there spending restrictions with an IVA?

Upon approval of your IVA, your IP will clarify the terms of your agreement, including your additional income threshold. Essentially, this refers to the extra income you can earn without contributing it to your IVA, typically set at 10% above the income mentioned in your original IVA proposal.

If your additional income remains below this 10% threshold, you are free to use it as you please. However, you must allocate 50% towards your IVA if it exceeds the limit.

Additionally, while in an IVA, you cannot maintain an overdraft on any bank account and are only permitted to borrow up to £500 in credit.

If you need to borrow more than £500, you must consult with a debt advisor giving a detailed explanation for the intended use of the funds. Your Insolvency Practitioner will then assess your financial situation and determine whether you are eligible for further credit.

Call us on 0800 464 7235

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…

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Can I travel abroad with an IVA?

While enrolled in an IVA, you are free to travel within your country or internationally. However, it is essential to be aware of certain factors before booking a holiday. For instance, you are not required to inform your IP about your travel destination or duration, but you must notify them if your holiday extends beyond a short break (typically two weeks).

Furthermore, you may only be able to afford a holiday if you have saved extra money from the IVA budget allocated to you upon entering the arrangement.

Alternatively, a friend, partner, or family member can contribute funds towards your vacation.

Nonetheless, if you are already having difficulty with your IVA payments or have limited funds after covering daily expenses, it might be in your best interest to explore other options, such as waiting until your IVA is completed.

Can I move abroad with an IVA?

While residing overseas during an IVA, maintaining your monthly payments is crucial. If you can manage this, living abroad should not be an obstacle. Your Insolvency Practitioner (IP) or IVA provider might request an updated income and expenses form to ensure your future earnings can cover ongoing payments.

If you find yourself unable to meet these payments, it is essential to notify your IP promptly about your change in circumstances. Failure to uphold the IVA could result in losing protection from creditors, allowing them to pursue the outstanding debt.

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Can I get a payment break to go on holiday during an IVA?

While obtaining a payment break from your IVA for emergency expenses is possible, it is essential to first secure approval from your Insolvency Practitioner (IP) and present a valid justification. Any missed monthly payments will be added to the end of your IVA, resulting in an extension of your arrangement by 12 months.

Consequently, taking a payment break for a holiday is highly improbable, and you will likely need to explore alternative funding options.

We’d strongly advise against borrowing money for a holiday during your IVA. Doing so would increase your existing debt and jeopardise the entire arrangement.

Remember, maintaining the integrity of your IVA is crucial for your financial well-being, and our goal is to help you navigate this process successfully.

Can I go on holiday if I booked it before my IVA?

If you have already arranged and paid for your holiday before entering an IVA, no regulations prevent you from enjoying your holiday as planned.

This holds true even if the payment was made using a credit card, and the debt from that card is included in your IVA.

The credit card company is not allowed to cancel your holiday or prevent you from taking it. The only concern, in this case, would be whether the credit card company approves your IVA proposal.

However, as long as 75% of your creditors agree, your IVA will proceed without issue.

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