Will an IVA affect my credit rating?
When you enter into an IVA, it’ll appear on your credit file for six years. The six years begin from the date your IVA is approved.
If you finish your IVA early, it’ll still appear on your credit file for six years, however it will be marked as complete.
If your IVA takes longer than six years, it’ll appear on your credit file until the IVA completes.
The IVA will impact your credit file in a negative way. If you finish your IVA early, you may struggle to take out further credit while it’s still on your credit file.
What happens to my assets on an IVA?
An asset is something of significant value that you own, for example a house, car or item of jewellery, or savings or shares.
If you enter into an IVA, you’d need to let the insolvency practitioner (IP) dealing with your IVA know about your assets.
Assets aren’t necessarily included in your IVA. Each IVA is different as it’s tailored to suit your situation. In most cases, you’ll be able to keep items like your phone, jewellery, car and home.
If you own a car, you’ll usually be able to keep it, depending on the value. Your insolvency practitioner will value the car to check how much it’s worth.
If your car is worth quite a lot, the IP may question whether you need to own a vehicle that’s worth a lot of money, or your creditors might ask you to sell it. If you’re asked to sell your car, you’ll usually be allowed to keep some money to buy a replacement.
If you own two or more cars, you may be expected to justify this to the IP. If there’s no valid reason for owning an extra car it may be sold so the money from the sale can go towards your IVA.
If you have a car on hire purchase then it’s likely you’ll be able to keep making payments towards it so you can keep it. You would need to speak with the hire purchase company to check if they have a problem with you entering into an IVA.
If the hire purchase agreement comes to an end during your IVA, the extra money that becomes available as a result will be paid towards your IVA.