Rent a House during an IVA

Rent a House during an IVA

If you rent a house or flat it should not be affected if you start an IVA. However there may be implications if you decide to move to a new property.

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Can you continue to Rent your House if you start an IVA?

Starting an IVA will not affect your ability to continue to live in a property you are currently renting. Your landlord will not be told. As such as long as you continue to pay the rent on time you should have nothing to worry about.

Your negative credit rating will not affect your landlord’s property. A property cannot be blacklisted. It is the individuals who live in the property who can have a poor credit rating but not the property itself.

The Arrangement might actually improve your relationship with your landlord. Once the Arrangement is in place you should always be able to pay your rent on time because the required cash is budgeted in your living expenses.

It is unlikely that anyone will ever discover you are in an IVA unless you tell them.

The Implications of moving to a New Rented Property

A monthly payment IVA will normally last 5-6 years. During this time there could be many reasons why you might need to move to a new rented property.

In theory there is nothing to prevent you from doing this. However if your new rental payment is either higher or lower than the amount you previously paid it will affect the Arrangement.

If the rent is higher your living expenses budget will increase. You may not be able to afford this without reducing your IVA payments. It might be possible to do so but the agreement may have to be extended as a result.

If your rent falls after moving to a new property and your disposable income goes up as a result you may have to increase your IVA payments .

Will your credit rating stop you renting a new house during an IVA?

Once you start an IVA your credit rating will become poor. This will cause problems if you want to move and rent a house or other property using a letting agent during the Arrangement.

The issue is most letting agents will credit check you. You will fail this because of your IVA. As such it is usually best to be upfront with the agent about your situation. If it is going to be a problem there are some things you can offer to overcome this.

You could suggest paying rent 6 months in advance. However given your financial situation this is likely to be difficult. Alternatively you could offer a Guarantor. This could be a family member or friend who confirms they will pay your rent if you are unable to do so.

Your poor credit rating will not normally be taken into account if you are planning to move into a rented property owned by the Council or local Housing Association.

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28 thoughts on “Rent a House during an IVA

    Francesca says:

    Can I rent a property before entering into an Iva? I need advice asap

      Hi Francesca

      If you are looking to move into rented property I would strongly advise that you do this before you start an IVA. There are two key reasons for this:

      1. Once you start your IVA your credit rating will become poor. You will then find it much more difficult to rent through a letting agent as you will fail their credit check.

      2. If you move first you will know exactly what your new living expenses will be. You can then complete your income and expenses budget and calculate your IVA payment accurately. It is not easy to change this if the figures are incorrect after you have started an IVA.

    Emily says:

    Hiya I’m looking to rent with my partner soon but worried il be rejected because of my iva.
    Will it be ok because hes the main earner? He doesn’t know about my iva because just looks like a credit bill really so havent felt need to tell him

      Hi Emily

      The issue you have is the record of your IVA is recorded on your credit file. As such if you put yourself forward as requesting a tenancy in joint names with a letting agent, you will fail their credit check and the application is likely to be rejected. I would strongly recommend that your partner takes the tenancy in his name alone. This should not be an issue given he is the main earner. I understand that you may therefore have to tell him about your IVA. This is something you will have to think hard about. If you try to do a joint application and it is rejected he is going to find out anyway…..

    Dave says:

    If i start an IVA to pay off my debts will i still be able to move home as i live in a council property?

      Hi Dave,

      Moving to a new rented property during an IVA can be difficult. This is because letting agents who work on behalf of private landlords will often do a credit check which you would fail because your credit rating becomes poor once the Arrangement starts. However councils and housing associations do not carry out credit checks. So if you start an IVA and then get the opportunity to move to a different council or HA property there will be no issue at all.

    Laura says:

    I am over two years into my IVA and I’m a single mother. I have been given notice to move as landlady is selling. I now need to move hoping to stay with the same agents. Will my IVA still cause me a problem?

      Hi Laura,

      Unfortunately your IVA is likely to give you problems I am afraid. The issue is that it is recorded on your credit file and this make your credit rating poor. As such if an agent does a credit check, you are likely to fail it.

      I suggest you tell your agent about your IVA up front. Explain that there will be no issue paying the rent but you are likely to fail their credit check. Hopefully it will not cause a problem as they know you and understand you are a good tenant.

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