Renting with an IVA – everything you need to know

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This article will cover everything you need to know about renting with an IVA, from how an IVA affects your credit rating to how an IVA can affect both current and future rental agreements.

Entering a formal debt solution like an IVA is a big decision and it’s normal to worry about how your living situation may be affected – especially if you live in rented accommodation.

Generally, while an IVA shouldn’t affect your ability to continue renting or move into a rented property, there are some things you should know about before you make a decision.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a formal and legally binding agreement between you and your creditors (the people you owe money to) to repay your unsecured debt over a set period – typically five years.

Because an IVA is legally binding, it must be approved by the court and your creditors must stick to the terms and conditions for the duration. This also means it can only be administered by a licensed Insolvency Practitioner (IP), who is a financial expert entrusted to look after your finances and distribute your monthly payments among your creditors.

During an IVA, your creditors won’t be able to contact you or hassle you for payment and all interest and charges on the debt will be frozen, allowing you to focus on chipping away at your outstanding balance.

IVAS can be used to repay most unsecured debts, such as personal loans, credit cards, catalogues, and, in some cases, old rent arrears. They can’t be used for Hire Purchase (HP) agreements, court fines, and student loans.

How does an IVA work?

Knowing how an IVA works can help put your mind at ease about the whole situation. We’ve outlined the basic steps involved when you apply for an IVA below:

Meet with an IP

The first stage is meeting with an IP who will review your income and expenditure and determine whether an IVA or another debt solution would be the best option for your financial situation at this time.

During this meeting, you must ask any questions you have about the IVA process, including whether all your debts are included and what the rules around borrowing are.

Draft an IVA proposal

Once it has been determined that an IVA is the best course of action for your debt, your IP will get to work drafting an IVA proposal.

The main aim of an IVA proposal is to outline your financial situation and convey to your creditors how much you can realistically afford to pay toward your debt each month.

Await creditor approval

The next stage is your IP sending your IVA proposal to your creditors for approval.

This is known as a ‘creditors meeting’ but doesn’t necessarily mean all your creditors will attend a meeting together to discuss your debts and is used more as a deadline for when they need to cast their votes.

Start your IVA

For your IVA to be approved, the creditors to which you owe 75% of your debt must agree to the proposed terms and conditions.

Once this happens, any ongoing interest and charges on the debt will be frozen and your creditors will be instructed to stop contacting you or asking for payment. This is also when you’ll be informed of your first payment date, which is typically within 30 days.

Write off your remaining debt

One of the main advantages of an IVA is the ability to write off your remaining debt at the end of your agreed payment schedule. For example, as long as you make your IVA payments as agreed for five years, any remaining debt you have at the end of this period will be wiped from your record and you won’t be required to pay it.

This can allow you to move on with your life and look forward to a future free from debt – even if you only repaid a percentage of what you owe over the course of your IVA.

How does an IVA affect my credit rating?

Unfortunately, an IVA will have a negative impact on your credit rating for several years and make it difficult to access most forms of credit, from a personal loan to a mortgage.

When you enter an IVA, it will be added to your credit report for a total of six years. During this time, you’ll suffer from a poor credit rating and lenders will be hesitant to let you borrow money.

This is because an IVA indicates that you’ve struggled with debt repayments in the past and have the potential to default on future credit agreements.

Remember, most IVAS last five years, and your IVA will be visible on your credit record for another year after you make your final payment. So even if you’ve settled your debt, your credit score will automatically return to its pre-IVA level and you’ll still struggle to access credit.

Some banks, building societies, and utility providers also run credit checks on prospective candidates, and having an IVA may mean you fail these checks.

Will an IVA affect my current rental agreement?

Entering into an IVA shouldn’t have any impact on your ongoing rental agreement and you should be able to continue living in your current property with no problems.

Furthermore, you’re not legally obligated to inform anyone – including your landlord – that you have entered into an IVA and can navigate the process on your own if you wish.

The only time your landlord or letting agent may become aware of your IVA is if they check the IVA Register. This is a public record of all active IVAs which is accessible by the public but is generally only used by credit reference agencies and lenders.

When your IP reviews your income and expenditure, they will take your rent payments into account. This means that you should never have a problem affording both your rent payments and your IVA payments.

However, while rare, it’s worth checking your tenancy agreement for any mention of anything that would mean you can’t be insolvent while living at that address.

Can I move into a new rental property during an IVA?

During an IVA, your credit rating will be damaged and you’ll struggle to access anything that requires a good credit score – including a rental property.

Most landlords will review your finances to confirm you can afford both your rent deposit and your monthly payments, and an IVA can make them doubtful that you’ll be able to make your repayments in full and on time.

This can also cause problems when it comes to renewing an existing tenancy agreement – especially if your landlord didn’t know you were in an IVA and requests annual credit checks.

However, living with another person or using a guarantor might make the renting process much more manageable. By being upfront with your landlord and sticking to the terms of your IVA, you may be able to convince them that you can manage your finances responsibly.

Can an IVA affect renting in the future?

IVAs are designed to help you clear your debt in as little as five years, but it’s normal to worry about how they may impact your finances in the long run.

The only time an IVA should affect your ability to rent in the future is if it’s during the six years it’s still visible on your credit file.

Once an IVA has been removed from your credit report, your credit score will gradually improve and you should find it much easier to obtain landlord approval.


When you enter a long-term debt solution like an IVA, your first thought may be how it’s likely to affect your living situation – especially if you rent through a landlord or letting agency.

The good news is, while an IVA may make it challenging to move into a new property or renew an ongoing tenancy agreement, it should have no impact on your ability to continue living in your current rented property.

Key Takeaways

An IVA is a formal debt solution designed to help you consolidate your unaffordable debt into manageable monthly payments
When you enter an IVA, it will be added to your credit file for six years
Entering into an IVA should have no impact on your ability to continue renting your current property
Moving into a new rental property or renewing a tenancy agreement with an IVA can be challenging
An IVA shouldn't have any impact on your ability to rent a property after it's been removed from your credit file
Maxine McCreadie

Maxine McCreadie

Author/Debt Expert

Maxine McCreadie, prominent personal finance writer featured in Vogue and Yahoo News, delivers practical guidance, simplifying money management and championing financial literacy.

How we reviewed this article:


Our debt experts continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

May 1 2024

Written by
Maxine McCreadie

Edited by
Ben McCormack

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