Job and an IVA

22/08/2018
Job and an IVA

It is unlikely that your job will be affected if you start an IVA. Most people can simply continue working as normal.

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Will your Job be affected by an IVA?

The majority of jobs are not affected by an IVA. You simply continue going to work as normal. Your employer will not be told so it is very unlikely they will ever find out.

The payments you make into the Arrangement come from your bank account via standing order. They are not taken directly from your wages. They have nothing to do with your employer.

It would be possible for your employer to discover your circumstances if they searched for your name on the Insolvency Register. However in most cases it is unlikely they will do this.

An IVA may not be sutable if your job requires you to maintain a good credit rating. It is recorded on your credit file and so would be detected if your employer carries out regular credit checks on you.

Do you have to tell your Employer if you start an IVA?

You are not normally obliged to tell your employer that you have started an IVA. You only have to do so if your employment contract specifically states you must inform them if you become insolvent.

Having said that you should tell them if you work in a job where you are expected to have a clean credit rating. In these circumstances you should speak to them before using any debt solution.

If you work for the Police or Armed Forces starting an IVA is normally acceptable. However you must confirm your plan with your superior or local Professional Standards Representative before you start your application.

If you are not sure whether you are obliged to tell your employer about starting an IVA you should check your contract before applying.

Can you apply for a new Job during an IVA?

There is nothing to stop you changing your job during an IVA. The Arrangement itself does not prevent you from doing so.

However in some limited circumstances a new employer may ask you whether you are insolvent or subject to formal insolvency proceedings. If they do you should be honest about your IVA and this could count against you.

If you are asked during a job application process whether you are insolvent you should answer yes. If this is important to an employer they can easily double check your answer on the Insolvency Register.

Changing your job during an IVA could have an impact on your monthly payments. If your income increases your payments might go up. If it falls you may start to struggle.

What if you are a Company Director or Self Employed?

You can use an IVA if you are a Company Director. This is a key difference between this solution and Bankruptcy. The solution was launched in 1986 with the idea of helping directors.

As such if you are the owner director of a small company an IVA can be an extremely attractive debt solution. You can get your personal debts under control while continuing to run your company.

The Arrangement is also available if you are self employed. However you must be able to draw a sustainable income from your business from which you can make a reasonable payment towards your debts.

If you are a director of a larger company you must check your employment contract before starting an IVA. You may be obliged to inform the board if you become insolvent.