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.

Jump to article contents:

Want help to start an IVA?

Give us a call: 0800 011 4712 or complete the form below to speak to one of our experts

Can you continue to Rent a 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 your landlord will ever discover you are in an IVA unless you tell them.

The Implications of moving to a New Rented Property during an IVA

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 prevent you from 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.

Related Articles

12 thoughts on “Rent a House during an IVA

    Kiera says:

    My other half is currently in an IVA. We are looking into council housing as we cant afford to move. Will the IVA mean he is turned down by the council?

      Hi Kiera

      The fact that your partner is currently in an IVA will not affect his or your ability to get a council house. Your partner’s credit rating is likely to be poor because he is in the Arrangement. However councils and housing associations do not normally consider a person’s credit rating when deciding whether to offer housing. As such given you both meet any other criteria required by the council his IVA should not be a problem.

    Katy says:

    Hi . I have a quick question I need your advice on…

    I’m looking at an iva as I have considerable debt and am unable to pay, but I have a property I’ve been renting out that is now ready to sell There is a little equity in it but I owe this back to my parents as it’s what they loaned me to put into the flat as a deposit. It’s the reason I’m having to sell it as I can’t afford to repay them anymore

    If I wanted to do the IVA should I wait until I’ve paid them back before starting or would I be able to leave this agreement in place?

    Thanks for your help

      Hi Katy

      This is not straight forward and does need to be considered carefully.

      It will probably be best to sell the flat first and repay your parents before starting the IVA. If you start the IVA first the money raised from the flat will become a windfall and if this has not been considered beforehand the funds will have to be paid into the arrangement.

      If you cannot wait to start your IVA (due to pressure from other creditors) it may be possible to press ahead with the application. However the fact that you plan to sell this property and the proceeds from the sale must be returned to your parents will have to be stated in the proposal so it is made clear to the creditors. The creditors would then be able to accept your IVA on that basis or reject it.

    Clare says:

    Hi. I am considering starting an IVA, I have approximately £8500 of debt with 14 different creditors. Would having an IVA affect my ability to rent, I have been renting for years and move frequently due to changes in jobs etc. I have no option but to rent and am worried that this would be a problem, would you please advise?

      Hi Clare

      If you start an IVA it will be recorded on your credit file. As a result your credit rating will become poor. As highlighted in the article above this will not affect your current rented property. However it is likely to cause you problems if you want to move.

      The issue is if you use a letting agent they will carry out a credit check against you which you are likely to fail. The only way around this is usually to offer someone to act as a guarantor for the rent payments.

      If you are struggling with debt then the problem you face is unless you maintain your repayments as normal whatever you do will affect your credit rating. For example the alternative solution you could consider is a Debt Management Plan. However your credit rating would then be negatively affected in pretty much the same way as an IVA resulting in the same problems with future letting agents.

    Adele says:

    hi All
    im currently in year 3 of an IVA, however i now want to move in with my partner and start renting. am i OK to do this with an IVA? do i need to get permission? i will only be paying the household bills not the rent?

    also can you still get things on finance if your accepted example dfs for a sofa do i need to seek permission first. i really feel like getting an IVA was a bad choice as its so restricting.

      Hi Adele

      I assume you want to move into a property your partner is already renting in his name? It is possible for you to do this during an IVA. However you need to be careful about the way you explain what you are doing to your IVA company. The issue is that once you move the IVA company will need to re-assess your income and living expenses budget to see if your disposable income (ie the amount you can afford to pay into your IVA) has changed.

      The way to keep things as simple as possible is say you are simply moving in as a lodger. Confirm you will be paying a monthly rent to the landlord (ie your partner) but otherwise your finances remain entirely separate. If you do this then your partner’e income and expenses will not need to be involved in any way.

      Remember if your surplus income goes up as a result of your move then your monthly IVA payments are also likely to increase.

      In terms of getting things for the house on finance this this is not possible to do in your name. Firstly you cannot personally take additional finance in your name until your IVA is completed. Secondly your credit rating is currently poor and it is unlikely your will get finance even if you applied for it until the record has come off your credit file. As such your partner will need to take any finance agreement in his name.

    Suzy says:

    Hi

    I have been told my landlord is selling the house I am renting so am having to look elsewhere for a new rental. My boyfriend is asking if he can move in to my new property and be on the tenancy how will this work with my iva?

      Hi Susy

      There are a couple of things you will need to consider here.

      As you know your credit rating is currently poor due to your IVA. As such trying to get a new rental property through a letting agent will be difficult as you will fail their credit check. The only way around this would be if your partner took the agreement in their name alone or someone was to act as a guarantor for you.

      In addition it is also important to remember that if you do move in with your partner your IVA payment may be affected. This is because now there would be two of you sharing the rent and bills. As a result your living expenses might fall meaning your surplus income would go up. As a result your IVA payments might also go up.

      My suggestion would be to have a chat to your IVA company and let them know you are having to move. Chat through the different options with them so you understand the implications fully before making your decision.

    Jan says:

    Hi there. I am in year two of IVA and living in rented accommodation. My landlord has indicated that I may have to give up the apartment because he wants to have it over to his daughter. I’m in a pretty desperate situation because of the IVA it will be difficult to get through credit check for another home. I don’t have anywhere else to live as my children live abroad or in Scotland. I’m thinking of cancelling the IVA or dropping out. It’s making my life even worse than the debt

      Hi Jan

      Renting a new property during an IVA can be tricky because of your poor credit rating. If you use a letting agent they are likely to carry out a credit check against you which you will fail. As discussed in the article above the only way around this is normally either to pay rent in advance (which you are unlikely to be able to afford) or get someone with a good credit rating to act as a guarantor for you.

      When you speak to letting agents be honest. Tell them you have a poor credit rating so are likely to fail a credit check but it is under control and you can provide a guarantor. Many will then help.

      This is important: Cancelling your IVA will not help your credit rating. The record of the Arrangement will stay on your file for 6 years from the start date whether you cancel or not. As such if you can afford to it will be best to keep up with it so your debts are paid off.

      Alternatively if you really cant afford the payments you could consider failing it and then going bankrupt. The advantage with bankruptcy is you do not have to make ongoing payments unless you can afford to…..

Leave a Reply

Your email address will not be published. Required fields are marked *