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If you’re in rent arrears with your current landlord, these could – in theory – be added to an IVA. However, your landlord is unlikely to agree to this as it would be more profitable for them to evict you and find a new tenant. This is especially true if you’re renting in the private sector.
Still, this doesn’t mean an IVA can’t solve your current rental situation. Assuming you’re struggling with other debts, such as credit cards or overdrafts, an IVA would take these expenses and effectively condense them into an affordable monthly payment.
As this solution ensures you’re paying back what you can afford, living costs would be factored into the budget. Therefore, the IVA should be set up to ensure you always have the funds necessary to pay your landlord.
Of course, if you want to move rental address while on an IVA, that’s possible as well. In this situation, your current rent arrears should then be considered part of a previous property. As a result, they could be included in the agreement.
Furthermore, moving to a cheaper property might be good for your financial situation!
Rent arrears from previous properties can be included on an IVA and will largely be treated as any other form of unsecured debt. When the IVA comes to an end, if you haven’t repaid the rental arrears, anything remaining should be written off.
It’s worth noting though that your previous landlords may have to agree on the IVA before the solution becomes legally binding.
If they don’t agree – and the rent arrears represented the majority of your debt – an IVA might not be available to you.
Fortunately, as long as the agreement gives your landlords a better return on their money than bankruptcy, they should vote in favour of the IVA.
A landlord cannot evict you from a property straight after missing a rent payment. Usually, upon failing to meet your rental obligations, you will receive a demand for payment a few days later. If you’re unable to pay, a landlord may wait up to 21 days before starting legal action.
Should they use the Housing Act 1988 to do so, they will need to give between two weeks’ and two months’ notice for you to vacate the property.
Therefore, when you’ve missed one rental payment, you should have a few days to get on top of the situation. However, it’s always worth keeping your landlord informed and letting them know the steps you’re taking to pay what you owe.
It is possible – and, in fact, can be very easy – to rent with an IVA. As this solution covers all your expenses, any essential expenditure (which includes your rent, bills, and food) will be covered. Consequently, you should always have money left over to pay your rent with an IVA.
If you’re struggling to pay your rent arrears – help is available. Just complete the quick application form below and we can identify, at no cost to you, whether an IVA could get you back on top of your finances.
Debt write off applies to unsecured debts and on completion of an IVA. A debt write off amount of between 20% and 80% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.
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Free money help and advice can be found at the MoneyAdviceService.org.uk