An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors to pay back your debts over a set amount of time, which is typically five to six years. It’s a common solution for those who are facing unmanageable debt, but many people wonder if they can still rent a property while under an IVA.
The answer is yes, you can rent with an IVA, however, there are several things that need to be considered.
Understanding an IVA
An IVA is a legally binding agreement that allows you to repay your debts at an affordable rate over a set amount of time. During this time, creditors cannot take legal action against you. While an IVA can be a relief for those struggling with debt, it does impact your financial situation and credit rating, which is something that’s worth considering first.
Renting a property with an IVA
Renting a property whilst under an IVA is possible, but it can come with some challenges. Most landlords or letting agents will perform a credit check as part of the rental application process.
An IVA will appear on your credit report for six years, and even if you finish your IVA earlier than expected, it won’t be removed – it’ll just be marked as ‘complete’. This may signal to landlords that you’ve experienced financial difficulties and could be a concern as they’ll see you as a higher risk tenant.
Additionally, your IVA will be listed on the public Insolvency Register. This register records various types of insolvency, including Debt Relief Orders (DROs) and Bankruptcy. As it’s a public register, landlords will have access to your information including the date your IVA was registered and its duration.
While this may seem daunting, it doesn’t mean you’re unable to rent a property. It just means you may need to take extra steps to reassure potential landlords.
One way to improve your chances is to offer a larger deposit, providing landlords with added security and showing your commitment to meeting your rental obligations. Additionally, if you have a guarantor who can cover your rent if you are not able to, this could also improve your chances of securing a rental property, as it reduces the risk for the landlord.
Being upfront and honest about your IVA can work in your favour. Explain your situation and demonstrate how you are managing your finances responsibly. Providing references from previous landlords or proof of consistent payments can also help.
Tips for renting with an IVA
Gathering all the necessary documents before applying for a rental property can help improve your chances. This includes proof of income, bank statements, and references. Being organised and prepared shows landlords that you are serious about renting and capable of managing your finances.
It’s worth noting that entering into a rental agreement while on an IVA is something that will need to be authorised by your Insolvency Practitioner (IP). This will require you to contact the company who set up your IVA for you.
If you are not yet in an IVA and are concerned about how this might affect any future attempts to rent a property, MoneyPlus can offer professional, tailored debt advice to help you understand your options.
For more information, contact us today to speak with one of our expert debt advisers.
The impact of an IVA on your financial life
During the six years your IVA is on your credit report, obtaining credit, including renting a property, can be more challenging. However, an IVA is designed to help you regain control of your finances. And with careful management, you can still find rental opportunities that suit your needs.
Ultimately, renting with an IVA is possible, but it requires understanding the implications of your financial situation and being prepared to address potential concerns from landlords. By being transparent and seeking independent advice, you can improve your chances of securing a rental property.
