Tackling your debts

How will an IVA affect me in the future?

Posted 07 October 2016

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Considering an IVA? Make sure you know how it all works.

Depending on your circumstances, an Individual Voluntary Arrangement (IVA) might be the best way to get you debt free. An IVA usually lasts between five and six years and during that time you make regular monthly payments towards your debts. As long as you complete the solution successfully, anything else you owe will be written off when it ends. 

But once your IVA is complete, will your finances just go back to normal? Or will your debt solution have an effect on your life even after it’s over? Let’s take a look at how an IVA could affect you in the future.

And if you’re still not sure if it’s for you, check out our blog on whether or not an IVA is a good or bad thing.

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Credit history

When you start any formal debt solution, like an Individual Voluntary Arrangement (IVA) or bankruptcy, it will have an effect on your credit history. An IVA will stay on your credit file for six years, or as long as the IVA is open (if your IVA lasts longer than six years). So, if you finish your IVA in five years, it will still affect your credit history for a further year. But in some cases your IVA might stay open longer than expected, and if this happens it will stay on your credit history for longer than six years. 

Creditors will check your credit history when you apply to borrow from them. If they see your IVA, they might be more likely to turn you down. Or, if they do accept you, it could be at a higher interest rate so the credit could cost you more. 

And your credit history doesn’t only affect you when you’re looking to borrow money. You may also be credit checked when you apply for some other services like a mobile phone contract or a rental agreement. And if an IVA shows up during this, some providers may turn you down.


With most jobs, an Individual Voluntary Arrangement (IVA) won’t have any effect at all. But there are some roles the debt solution can affect.

For example, if you’re an accountant, a solicitor or you work in certain roles in financial services, an IVA won’t be compatible with your job. Some other jobs such as the police force or working as a prison officer also have strict conditions of employment – an IVA could affect this. Check with your HR department to find out how debt solutions would impact your role and you can take a look at our blog on whether an IVA will affect your job to find out more.

It’s also worth keeping in mind that even if an IVA doesn’t affect your current role, you may want to think about your future career plans. So, for example, if you’re thinking of becoming an accountant in a couple of years, it’s probably worth looking at a different debt solution. If you speak to one of our advisors and it turns out that an IVA is not right for you because of your job, they will look into other more suitable options for you. 

Getting a mortgage

As we explained further up, you’ll have a credit check when you apply for any form of credit. If you’ve had a debt solution such as an Individual Voluntary Arrangement (IVA), this will show up on your credit history for a certain amount of time. 

Applying for a mortgage is just like applying for any other type of credit – you’ll still have a credit search. And if you’ve had an IVA recently and it still shows up on your credit history, you might find it harder to get a mortgage.

If you’ve spoken to a debt expert and decided that an IVA is the best solution to help you get debt free but you’re looking to buy a home at some point in the future, you may have to wait a bit longer to do this. Once your IVA has dropped off your credit history, it shouldn’t hold you back from your homeowner dreams.

How it can help

There’s a lot to think about before starting an Individual Voluntary Arrangement (IVA), but does that mean you shouldn’t consider an IVA to help you get debt free? Definitely not – while there are some things you’ll need to think about before you apply, an IVA can be the best way to clear problem debt for some people. 

Say you didn’t have much to put towards your debts each month – this means it would take a long time to clear what you owe on a Debt Management Plan (DMP). Instead, an IVA might be more suitable as this could help you get debt free sooner. And with bankruptcy, you could be at risk of losing your home, something you probably won’t want to happen if you’re a homeowner. With an IVA, this will never happen.

Speak to a debt expert before you apply for any debt solution and they’ll be able to tell you the best way for you to get debt free. They’ll look at how much you owe, how much you’re bringing in and your expenses and they’ll use this to build up a clear picture of your finances. They can then tell you which debt solutions – if any – are the best for your situation.


by Emily Bancroft

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.