Will an IVA affect my credit rating?
When you enter into an IVA, it’ll appear on your credit file for six years, 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’ll be marked as complete
- If your IVA takes longer than six years, it’ll appear on your credit file until the IVA completes
In addition, your creditors may record a default on your credit file. The default indicates that the original credit agreement has been broken and will be visible on your credit file for six years.
This is a normal part of the debt collection process. Any defaults added to your credit file should be dated no later than the date your IVA was approved.
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.
Assets aren’t necessarily included in your IVA.
If you enter into an IVA, you’d need to let the insolvency practitioner (IP) dealing with your IVA know about your assets.
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.
Can I keep my car on an IVA?
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 of such a value, 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, it’s likely you’ll be able to keep making payments towards it so you can keep it. You will 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 have to be paid towards your IVA. However, if the vehicle has to be handed back, you may be able to take out another agreement with the permission of the Insolvency Practitioner and the creditors, if it's essential to you.