Credit Report and the IVA
Your credit report and individual voluntary arrangements (IVAs)
This guide explains what an individual voluntary arrangement (IVA) is and how it could affect your creditworthiness.
This section discusses the following:
- Will entering into an IVA affect my ability to obtain credit?
- What will happen to my credit report when my IVA ends?
- Who can look at my credit report other than lenders?
- Are IVAs available in Scotland?
- Are there alternatives to an IVA?
- What is an IVA?
IMPORTANT NOTICE
Please beware of companies that advertise on TV on in the tabloids for IVAs as a way out of debt should be avoided as they could give you poor advice and make matters worse. You can find more detailed advice about alternatives to bankruptcy and IVAs please call 0800 074 6918.
Will entering into an IVA affect my ability to obtain credit?
An IVA will appear on your credit report for a minimum of six years from the date of arrangement, and longer if the arrangement lasts more than six years. During your IVA, reputable organisations will certainly ask for information about your situation and will probably refuse to give you further credit.
What will happen to my credit report when my IVA ends?
Once your IVA ends, the Insolvency Service will let the credit reference agencies know. The agencies will then update the IVA entry on your credit report to show it has been ‘completed’. The entry then stays on your credit report for six years from the date the IVA began. You might continue to experience difficulties getting credit and other financial services because you were in an IVA in the past. If you do manage to find someone who will lend to you, it is likely that they will see you as a high risk customer and they may charge you a higher interest rate as a result.
Who can look at my credit report other than lenders?
Landlords and employers can look at the ‘public’ information on your credit report, such as court judgments, bankruptcy orders and IVAs. As a result, entering into an IVA may affect your chances of renting a home or getting the job you want.
Are IVAs available in Scotland?
No. A Protected Trust Deed is the equivalent of an IVA in Scotland. Like an IVA, this is a legally governed procedure by which you can repay your debt over a specified period of time. Monthly payments are based on what you can afford. If you live in Scotland, you can get more information about Protected Trust Deeds and other debt repayment tools from a local money advice agency.
Are there alternatives to an IVA?
If you are struggling to meet payments, get in touch with your creditors and tell them about your situation. Many lenders will be sympathetic and you may be able to make an informal agreement direct with them to make reduced payments for a while.
If you feel you need help contacting your creditors, contact one of the confidential and non-judgemental advice agencies listed below, as they may be able to negotiate with your creditors on your behalf and arrange a debt management plan for you. They will also be able to explain the various ways of dealing with your debts, including a debt management programme, a debt payment programme (Scotland), an Administration Order or bankruptcy.
You do not need to pay a company to arrange a debt management plan for you, nor should you pay for help from any so-called credit repair company.
In general terms, an IVA is a binding agreement between you and your creditors to repay your outstanding debts, either in full or in part. It is often described as an alternative to bankruptcy. IVAs have to be administered by a licensed insolvency practitioner (IP), who is usually a qualified lawyer or accountant. To enter into an IVA you would submit an IVA proposal to an IP, who at this stage is called your ‘nominee’. The proposal sets out details of your assets and liabilities and how they will be dealt with. A typical proposal offers affordable monthly payments for a period of five years, but this can vary.
If your nominee decides that your IVA proposal is practical, he or she arranges for your creditors to meet. At this meeting, your creditors then vote on whether to approve your IVA proposal. They may also suggest changes, which you have to agree. If enough creditors agree (i.e. representing at least 75% of the total value of your debts), you and your creditors become bound by the terms of the proposal. Your creditors also decide who will administer the approved proposal. This person is called your ‘supervisor’ and may or may not be your existing nominee, but must be an IP. Details of it are then filed in court. The details are also displayed on a publicly accessible online register, the Individual Insolvency Register.
An IVA is not an easy way out of debt and has serious implications. Although an IVA will be a sensible way for some people to sort out their debts, it should only ever be considered after receiving professional, impartial advice.
This content is based on information from Experian
web: www.experian.co.uk / tel: 0870 241 6212
Experian is the UK’s largest credit reference agency.
When you apply for credit, you will probably give the lender the company you want credit from) permission to carry out a credit check.
The credit reference agency does not decide who should get credit, but the information provided (which you can see by asking for a credit report) may help the lender to decide.
This information includes details of the electoral roll, court judgments, bankruptcies and IVAs and your current and past credit commitments.
IVA Menu
- IVA (Individual Voluntary Arrangement) Overview
- Starting an IVA
- IVA Monthly Payment
- IVA Pros and Cons
- IVA FAQs - Frequently Asked Questions
- Starting an IVA
- The IVA procedure
- What is an IVA?
- IVA Enquiry Form
- How to start an IVA
- Who can an IVA help?
- IVA's - Facts & how they work
- Benefits and Advantages of an IVA
- Who can an IVA help?
- IVA - Help and information
- How an IVA works
- IVA - Estimated timescale
- The IVA approval process
- The IVA criteria
- Bankruptcy or IVA
- IVA - What are the costs involved?
- IVA - The documentation required
- IVA - Download forms
- Sample IVA proposals for PAYE worker
- IVA - Guide to creditors Fees
- IVA - Standard Terms & Conditions
- Individual Insolvency Register
- IVA
- IVA lifestyle
- Debt free after an IVA
- Is my home protected in an IVA?
- Chances of IVA rejection
- Keeping my car
- Credit rating after an IVA
- Credit report and the IVA
- Professional accreditation in an IVA
- IVA conclusion
- IVAs and meetings
- Change in circumstances whilst in an IVA
- IVA benefits for creditors
- Failed IVA payments
- IVA Case Studies
- Benefits of an IVA
- Implications of an IVA
- After an IVA - the end of an IVA
- IVA Help
- Best Debt Solution
- Proposed changes to individual voluntary arrangements (IVAs)
- What happens after an IVA fails?
- IVA Guide Centre
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]