How Does an IVA Affect Your Life?

An IVA has proven to be an extremely effective debt solution for many people in the UK, however it is important to get a clear idea of how it may or may not affect your life. 




In the vast majority of cases, having an IVA will have zero effect on your job. There is no law to say you must tell your employer. However, there are some professions that are strict about these things and will expect you to inform your employer. These are jobs like Accountants, Company directors etc. If you are unsure then, in confidence, inform your HR department to be on the safe side.


Credit Rating


There is no escaping the fact that an IVA will significantly, negatively affect your credit rating. It is proof that you have been unable to manage money and have needed help. Since some of your debt has been written off, your lenders will have lost some of the money they loaned to you. This makes future lenders nervous about lending to you in the future.


Once the IVA has finished, your credit rating will begin to improve, but it will take time.


Bank Account


If you have a bank account with a bank or building society that you owe money to, then it can be sensible to open a new account with a different bank/building society. This stops the bank you are in debt to from using their ‘right to offset’, this means they have the right to remove money from your account to clear some or all of the defaulted debt.


If you bank account has no links to a bank that you owe money to then you should be fine and will not need to change bank accounts.




Entering into an IVA as opposed to bankruptcy, means that it is extremely unlikely that you would be expected to sell your home. You may, however, be expected to re-mortgage it to realise any equity that it may have.


However, since your credit rating will take such a hit, you will likely find it difficult to get approved for a mortgage for a number of years.


To find out more, take a look at our IVA information and guidance pages.

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