Life After An Iva

An IVA (Individual Voluntary Arrangement) is a significant financial move that will usually be with you for five years, providing you see it through to completion.

The length of an IVA can be a stumbling block for some people who wish to clear their debts more quickly; bankruptcy proceedings, for example, are usually over in a maximum of one year, and occasionally as soon as one year.

However, not only is an IVA often over more quickly than other debt solutions (e.g. a debt consolidation loan or debt management plan), it avoids some of the downsides of bankruptcy -- most significantly, it allows you to keep your home.

How will an IVA affect my credit history?

Like any significant credit activity, an IVA will remain on your credit file for up to six years, starting from the date that the IVA begins. In this time, you will have strict credit restrictions imposed on you -- you might be allowed relatively small use of credit to a limit that has been pre-agreed as part of your terms, but in many cases, you will be unable to obtain credit altogether.

You may have already done the maths: your IVA will only (usually) last for five years, but the record will remain on your credit history for six, meaning there is a final one year period in which you may find it more difficult to obtain credit.

In this final year, there will not be any legal restrictions on your ability to obtain credit, as there were during your IVA -- but some creditors will be hesitant to lend money to someone who has recently been on an IVA. That said, you may have more success with a lender who specifically focuses on people with a poor credit history.

However, once this final year has elapsed, your IVA will not show on your credit history, which will be a boost to your chances of obtaining credit. With this in mind, it might be worth waiting until then before you apply.

Get advice about life after an IVA

If you're in an IVA, or have recently finished one, and are concerned about getting credit in the future, speak to an expert debt adviser to discuss your options.