Renting with an IVA: is it possible?
An Individual Voluntary Arrangement is a legal agreement between someone who owes money and their creditors. Designed to help those in financial stress, the agreement involves forming a binding contract to enable the recipient to pay off some or all of the money at an agreed amount per month. It will affect your credit rating – but can provide light at the end of the tunnel for those who are struggling.
But what does this mean for your financial matters? Is your life stuck in a bind, precluding you from spending any money without informing those who have set the conditions for your IVA? Can you ever attempt to move on – and move into a rental house, for example?
The answer is certainly yes, and many landlords will be amenable to taking on someone with an IVA. That said, it might be slightly more difficult. Put yourself in the position of a landlord, who simply wants a consistent, reliable income from rent. At some point in the recent past an applicant who is subject to an IVA will presumably have struggled with managing their financial affairs, and therefore represents more of a risk.
The steps are thus: the first is to inform your prospective landlord that you are subject to an IVA. They’ll probably want to carry out a credit check, so it will be discovered anyway, but your lack of transparency will mean that you are almost certainly turned down.
An IVA can only be set up with help from an insolvency practitioner (IP), who’ll know whether you’ve stuck to the original agreement; this could have lasted for several years, don’t forget. A letter from the IP supporting your application and showing that you will aim to be a model tenant (financially), will be looked upon favourably by a landlord. That obviously implies that you should keep up to date with payments and not run into more financial difficulties while the IVA is in place. The key therefore is not to fall into arrears or default on payments.
The landlord also might want a guarantor; someone who will act as a guarantee in the event that you cannot pay, and step in to accept any liabilities. This is quite commonplace for anyone looking to rent a home, IVA or not. In the normal run of life, most people rent for a period of time before they have saved enough money, and these are sometimes those who have struggled with money such as students and single parents. In summation, you won’t be alone.
There is one other question to consider. For example, what would happen if you are already renting when you become subject to an IVA? The answer is that, as long as you continue to pay your rent, it probably should not affect you adversely. The IVA is not linked to a property, so your landlord will not suffer. However, should you wish to move on, your credit rating will have been affected and you might find it more difficult – but as demonstrated earlier in this piece, certainly not impossible!