An IVA is normally only available for people living in England, Wales & Northern Ireland. However if you have moved abroad you may still be eligable.
- Can you start an IVA if you have moved Abroad?
- How do you apply?
- The effect on your local Credit Rating
- What if you have never lived in the UK?
Can you start an IVA if you have moved Abroad?
After you have moved abroad you might have debts in the UK which you are now struggling to pay. If you previously lived in either England, Wales or Northern Ireland you could still qualify for an IVA.
The most important thing to consider is where you are living now and how long you have been there. If you are living in another EU county (other than Denmark) you can still apply but only if you moved in the last 6 months.
If you are living outside the EU you have up to 3 years to apply. However after this you will lose the right. You would then have to move back to the UK and live here for the greater part of 6 months before you become eligable again.
To qualify for an IVA you must also be able to maintain reasonable payments towards your debts or be in a position to offer a lump sum.
How to Apply for an IVA if you are already living Abroad
If you want to apply for an IVA you need to use an Insolvency Practitioner (IP). This person is licensed to present your payment propsal to your creditors and negotiate the agreement with them.
The good news is there is no reason for you to travel back to the UK. The process is carried out over the telephone and by post. There is no need to meet with your IP face to face.
The only thing to bear in mind is that you will have to sign an original copy of your IVA Proposal Document. As such this will have to be posted to you and you will have to return it which will add time to the application process.
When calculating the amount you can afford to pay into the Arrangement remember to cover the cost of transfering money back to the UK and exchange rate fluctuations in your expenses budget.
The Effect on your local Credit Rating
One of the disadvantages of an IVA is the effect it will have on your credit rating in the UK. A record of the Arrangement is added to your UK Credit File which will have a negative affect for 6 years.
Despite this your credit rating in the country you have moved to is unlikely to be affected. This is because credit reference agencies do not usually carry out global checks.
There will be no record of your IVA on your local credit file. As such if a local bank carries out a check against you no negative records will show and you are likely to be offered credit.
The rules of your IVA do not allow you to take new credit anywhere in the world without the agreement of your IP. If you do so and it is discovered it could put the Arrangement at risk.
Is an IVA an option if I have never lived in the UK?
Your nationality does not affect your ability to apply for an IVA. It does not matter where you are from originally and you are not required to be a British citizen.
However if you have never lived in the UK you are not eligible to apply. In order to become eligable you must first move to England, Wales or Northern Ireland and live here for at least 6 months.
The only reason you might consider doing this is if you have debts in another country which you are struggling to pay. Debts from EU countries and elsewhere under UNCITRAL (United Nations Commission on International Trade Law) rules can be included.
An IVA can only be put in place if your creditors accept it. Gaining such acceptance can be difficult if they are based in different countries. As such it is more common to move to the UK and then go bankrupt to deal with foreign debt.