Suffering from debt and bad credit is an incredibly difficult situation, and it can feel like an impossible hole to dig yourself out of. Thankfully, we offer a debt solution that offers an alternative to bankruptcy through online assessment and monthly payments: an Individual Voluntary Agreement (IVA).
Are you interested in taking out an IVA but want to make sure it does not appear on your credit report? Keep reading to find out if you can remove an IVA from a credit report, how long it will typically stay on your credit file, and who will actually see your IVA.
Who Will See My IVA?
It can be extremely worrying thinking that the details of your financial difficulties are going to be aired amongst your family, friends, and colleagues - as if you do not have enough on your plate without the added stress of worrying about who is going to find out about your personal affairs. The good news is that your employer, your family, and your friends will not be informed of your IVA in the vast majority of circumstances.
Your IVA is a private binding agreement between you and your creditors. It involves the creation of carefully thought-out payment plans and must be arranged via an insolvency practitioner. Although this agreement is between yourself and your original lender, bailiffs, the court, a possible debt collection agency, and any future potential lenders such as banks or mortgage lenders will be notified of your IVA.
Your creditors will know about your IVA because the details of IVAs are kept in a public register known as the Individual Insolvency Register. These details will only remain in the register for the length of your IVA and an additional three months after the end of it. HMRC and trade creditors will be notified of your IVA if you’re self-employed and, depending on the people you owe money to, e.g. the council or utility suppliers, they will also be made aware of your IVA.
Details of the IVA will also be kept on your credit reference file, allowing creditors to check your credit rating before they decide to lend to you. These details will remain on your credit history for approximately six years from the date of the start of your IVA, ensuring that lenders are able to determine your payment history as well as any current debts or secured debts.
Details of missed payments and your general repayment history as well as your credit score will be available for these specialist lenders to view before making a decision regarding whether or not they wish to lend to you. More traditional lenders are likely to refuse you credit if you have an IVA on your credit reference file, whereas other lenders may see an IVA as a proactive way of dealing with your debts and evidence of you taking control of your repayments, rather than simply bad credit.
The one occasion that would require other people to know about the details of your IVA is when you own or have shared ownership of a property. Depending on how the equity is treated in your proposal, a shared property owner would be made aware of your IVA because, under the Equity Clause of your IVA, you may be expected to attempt to release a proportion of the equity from your home. This means that all involved parties would need to consent to the possibility of a remortgage taking place at some stage during the IVA.
Additionally, if you are self-employed and struggling with business debts, any parties involved in the business itself may be notified of the details of your IVA as it directly concerns them. For example, if you owe money to suppliers or employees, they will need to be included in the IVA, and will receive copies of the relevant paperwork.
How Long Will an IVA Stay on My Credit Report?
Generally, an IVA that lasts for five or six years will remain in your credit report for six years since the beginning of the IVA itself. However, paying off your IVA earlier does not mean that it will be wiped from your file earlier, it just means that it will be marked as complete rather than in progress. If the IVA takes longer than six years to complete, however, it will remain on your credit report until it is completed. If you stop making payments, your insolvency practitioner will ask the creditors if they want to present a petition for your bankruptcy, and if made bankrupt, the bankruptcy will then appear on your credit file.
Additionally, if you’re a homeowner, you may find that you need to release equity in the 54th month of the IVA. If this isn’t possible for whatever reason, there’s the possibility that your IVA might be extended from five years to six years to allow for additional payments.
You can check your own credit score with credit reference agencies if you’re interested in seeing the exact number and the impact for yourself.
After six years, the IVA will be completely wiped from your credit report, meaning you can build up a positive payment history for yourself. Once you start to build up a positive credit report, you should then be able to apply for larger credit items, such as loans.
So, although an IVA does remain on your credit report for quite a while, they can help you to become debt free, to restart building your credit rating once completed and usually a preferable alternative to bankruptcy.
Find Out More About IVAs Today
If you are still interested in taking out an IVA, get in contact with NDH Financial today for your free IVA consultation. We are a fully licensed insolvency practitioner that specialises in assisting individuals with personal insolvency solutions.
Just like with the thousands of other people we have helped in their journey to becoming debt-free, we guarantee a personalised service that will treat you with dignity and respect every step of the way. All we require from you are a few bank statements, a sustainable and affordable payment plan, and a little bit of patience.
So what are you waiting for? Apply now and begin your journey to a happier, carefree, debt-free life with NDH Financial.