Published in Debt Advice Features on Sunday, December 31 2006

This is fairly subjective. It will be entered on to your credit file that you are in an Individual Voluntary Arrangement, and because of this you should not be able to get unsecured credit. It gets entered once on to your credit file at the beginning of the IVA. 

Anything that goes on to your credit rfile will remain on there for six years, so you are in the IVA for five years, and a year after that it is removed. If you have got no further credit in this time and not missed any payments to any secured debts you have, your credit file will be cleared. Furthermore if you have been paying car finance or a mortgage it will show these good payments and your credit rating will look very good. In conclusion it will affect you severely at first, but afterwards you are likely to be in a much better position than you probably were before the IVA. Whilst in the IVA you can get secured borrowing, but this would be subject to very high interest rates. If you decide to buy a property for example whilst you are in the IVA, your mortgage would have high interest rates on it, but then after the IVA comes off your credit rating you could remortgage and lower this interest rate. You would need to communicate with your Insolvency Practitioner if you purchase a property as it may affect how much you pay, and also you need to be aware that is there were any releasable equity you may need to contribute it into the IVA. Although there probably isn’t likely to be any unless you have put down a large deposit, and if you did have lump sums of money then this would be expected to be paid into the IVA anyway.