Can I rent a house whilst on an IVA?

Being declared insolvent is often the best way for borrowers having serious problems with their unsecured debts to get back in control.

An IVA (Individual Voluntary Arrangement) could help you if you have significant unsecured debts - e.g. store cards, catalogues and personal loans - that you can't repay in a reasonable amount of time.

One advantage of an IVA is that if you own your own home you'll probably be able to stay in it, as long as you keep up with your payments (and release any equity, if required to). But will you be able to rent a property whilst an IVA is running?

IVAs - the facts

An IVA is the common term for an Individual Voluntary Arrangement - a legally binding insolvency solution you may have heard of if you live in England, Wales or Northern Ireland.

If you can't afford to repay a significant amount of unsecured debt in a time that you and your lenders consider reasonable, an IVA could be the best way of dealing with the problem.

Find out if you can qualify for an IVA here.

The road to getting an IVA with us can be quite straightforward:

1.  We can discuss your finances with you, and find out if an IVA seems to be the best approach.

2.  If an IVA does look like the best approach, your appointed IP (Insolvency Practitioner) - the person who will oversee your IVA - will set out your case in an IVA proposal: a document showing where you stand and how much you can afford to pay into an IVA per month, taking both your interests and your lenders' into account.

3.  Your IP will send your IVA proposal to your unsecured lenders, who will then 'vote' on it. As long as lenders holding 75% or more of your total debt agree, your IVA will begin.

Find out more about IVAs here.

Once your IVA starts, you'll begin making a single payment per month, based on what you can afford alongside your essential costs (e.g. rent/mortgage, food and bills). You'll also stop any further action being taken against you by your unsecured lenders.

Then, on successful completion of your IVA (usually after 5 years), any included debt that you haven't been able to pay back will be written off by your lenders.

Once your IVA finishes, you'll be free of your unsecured debts - though you should bear in mind that your credit rating will be affected for one more year (assuming it was a five-year IVA).

Can I rent a house whilst an IVA is running?

The payments you'll make into an IVA will be calculated to fit around all your essential monthly expenditure - and this includes rent payments to your landlord if you're a tenant.

As a result, entering an IVA could help you to keep on top of your rent. As long as you keep up with your rent payments whilst on your IVA, there's no reason why you won't be able to continue renting a property.

If you fall into any difficulties keeping up with your rent payments, you should speak to your landlord as soon as possible. If you have any problems making your IVA payments, we could provide the help and support you need.

By Daniel Culpan.