How will your ability to get credit in future be affected?

Imagine having the credit slate wiped clean. When you’re living with the burden of debt, it can be hard to envisage what it might be like to start afresh.

In the short term, an IVA can be challenging and there are certainly lifestyle adjustments which need to be made and many considerations to take into account.  But with the right advice from the outset and an understanding of how to make an IVA work well for you, the long term impact of an IVA could mean after 6 years your credit file is completely clean.

Let’s look at three key points around IVAs and your credit rating:

IVAs will affect your credit rating: There is no getting around the fact that an IVA will definitely affect your credit rating. Each of us has a credit file and your credit score is determined by a whole range of factors, from marital status and age to your previous credit history. If you’re thinking about entering into an IVA it’s important to understand the effect this will have on your credit file.

Understanding the implications of your IVA: You’re entering into a new financial agreement and that means in the short term, you may be breaching the terms of any original unsecured credit agreements. The upshot of this is that a ‘Default Notice’ will appear beside each of your original debts and this will be visible on your credit file. Normally, while your IVA is in place you will not be permitted to take out any further credit.

But it’s crucial to understand this is usually only for a set amount of time (normally 6 years) and in the longer term an IVA may help you get to grips with debt which previously seemed insurmountable.

It’s not forever: Debt can feel overwhelming when you’re struggling to keep up repayments. In the right circumstances, an IVA can help you regain a sense of control without the perceived stigma of bankruptcy.  Your IVA contract will usually last for around 60 months.  After this time your creditors will write off any remaining debt. Providing all your IVA payments have been made, your creditors are obliged to stop any legal action and all interest and charges will also stop. After the requisite 6 year period, the fact that you had entered into an IVA will not even be visible on your credit file.

Most people who are thinking about IVAs are in circumstances which are very unique to them, so it makes sense to talk everything through with an IVA professional.

Call now on 08000 43 43 47 to discover if an IVA could be the solution to your debt problems or complete our IVA Wizard and see if you qualify for an IVA