Renting With an IVA

When deciding whether to get an IVA, it’s natural to ask questions regarding how this arrangement will affect you and your life such as whether renting with an IVA will be possible. Although this depends on your circumstances, the good news is that if you’re currently renting a property, an IVA shouldn’t have much of an impact as the IVA payments would be calculated to make sure you can afford your rent payments.

Here’s an overview of what to consider about renting with an IVA:

• An IVA should allow you to afford your current rent payments without issues;
• If you have rent arrears from previous properties you should be able to include this in your IVA;
• An IVA may work better if you don’t have rent arrears in your current property;
• An IVA can help you to get your debts under control in the long-term, but will be seen by landlords on your credit file

Can rent arrears be included in an IVA?

Rent arrears from previous tenancies are classified as unsecured debt. This means that they can usually be included in your IVA, which is good news if you are struggling to pay rent arrears and would like an IVA to help with this.

If you have outstanding rent arrears from your current property, when setting up an IVA your current rental agreement and arrears will be taken into consideration by your Insolvency Practitioner. When monthly repayments are being set up, your rent will form part of your priority bills. Therefore, you will typically have an allowance to make your repayments for rent before payments are made to the IVA.

Can current rent arrears be included?

It’s important to note that it may not be beneficial for you to include outstanding rent from your current property in an IVA. The majority of your creditors (including landlords) have to agree to an IVA before it’s approved. An IVA is more likely to be successful when your creditors see it as more beneficial to them – in the circumstance of rent arrears for a current property, the landlord may see it as more beneficial to evict a tenant rather than receive the current rent payments from an IVA. If you’re unsure whether an IVA would be beneficial for your creditors, fill out our application form and one of our experienced advisors will be able to discuss this with you.

How does an IVA affect renting?

Everyone’s circumstances are different. But if you’re currently renting a property, an IVA should have no impact on your rent agreement as long as you continue to make the payments to your landlord. If you are ever unsure it is recommended that you check your tenancy agreement in advance.

Renting a new property

While the IVA is active, you may find it harder to rent a new property. Let your Insolvency Practitioner know if you want to move so they can consider any changes in your current living expenses and whether this will affect your monthly payments. If any adjustments need to be made to your IVA so you can move, they will advise you of this.

Some landlords may be open to their tenant renting with an IVA. It’s worth considering that landlords will usually check your credit report before agreeing to the tenancy. On the one hand this demonstrates that you’re taking action to resolve your debts – which would usually be visible on your credit report anyway – but the landlord will also see that you need the IVA to help you repay creditors. Many people may still choose an IVA despite this, because in the long-term an IVA can help you get your finances back on track so that you can start to rebuild your credit score after your unsecured debts are cleared.

Renting after an IVA

Ultimately, renting after an IVA shouldn’t become a problem. The IVA will usually stay on your credit file for six years from the date the IVA is approved. So if the IVA completes after five years it will show on your credit file for a further 12 months. However, your credit score is likely to eventually improve if you manage to stay on top of your debts and make payments on-time so the long-term benefits may outweigh this challenge for you.

One of the main advantages of getting an IVA to help with unsecured debts such as rent arrears is that any outstanding debts after the IVA ends may be written off. We’ve already helped 20,601* people start their journey towards financial freedom.

* As of 10/02/22 20,601 of our customers were in an active IVA.