after an iva

[baldyjabg]

i was listening to a politician on the radio who said that your credit rating was permentantly damaged after an iva was completed. Is this true? What is the process when the iva is completed

[Storm]

It takes some time for the impact of the IVA to wash out of your credit file but this mainly effects credit companies that use scorecarding techniques. Companies that manually underwrite credit applications can usually identify significant life change such as an IVA.

There are two elements as to why your credit rating is impaired.... firstly the missed payments / defaults and then the fact you have little if any credit for the term of the IVA.

Payment profiles remain part of the credit data for a period of 6 years. The problem identified is that during the lifecycle of the IVA lenders have been reporting AR (Arrangement). They also report the balance amount and then a write off amount at the end of the IVA or when / if they sell the debt.

The miss conception is that an IVA lasts 5 years, everything is written off and records cleared.... wrong !! - credit companies believe it takes upto 10 years for the credit rating to return to prime.

[neverending]

When trying to rebuild your credit status start with a simple thing like a home shopping book or a cd/dvd club.These will register on your credit file and will give you a history of payments on time.Move on to credit cards after several months

[accgroup]

Hello

When an IVA is completed successfully the Supervisor of the IVA, your IP, will send you a certificate to confirm that it has completed successfully. This is also sent to all your creditors and to the Court where your IVA proposal is filed.

The above comments are correct that these things stay on your credit file and take a while to clear up. In the IVAs that I have dealt with in the past I have known people write to the credit reference agencies sending a copy of their IVA certificate in order to have a note added so that when searches are performed it can be seen that you have done an IVA but that it has been successfully completed.

Hope this helps



AccumaGroup - A large insolvency practioner service based in Manchester.
www.accumagroup.com

[DebtDummy]

Okay, explain again please. My name is not debtdummy for nothing [:D]
My IVA proposal is for 72 months. Soooo, this remains on my credit file for 6 years from the time it's filed with the court or from the time I make my first payment? Then, at the end of 72 months, I will receive a certificate of completion from my IP, right?
I send this to the credit agencies and they add this to my credit file to show the IVA was completed satisfactory.

Soo, the IVA( in my case) lasts the same amount of time as the credit agency reporting it six years. Question.
1. Does the AR get removed after 6 years?
2. After 6 years does your history appear to be ok?
3. Do the defaults and late payments come off as well?

My IP told me that there is NO difference in the eyes of a creditor
between an IVA and a bankruptcy because an IVA is a type of bankruptcy
used for certain individuals under certain situations. In my mind this translated into ,''I will be viewed in the future by creditors as someone who had a bankruptcy''. Which means the same credit laws apply.

Is my thinking correct? Thank you all for answering.

[MelanieGiles]

Hi Debtdummy

There is no hard and fast rule with regard to credit repair. The 6 year rule is general, but even with a clean credit file you may get asked have you ever entered into a credit arrangement with your creditors at any time in the future to which you must answer honestly. The prospective lender will then effect a risk assessment to see whether they are prepared to lend.

I do not quite concur with your IP's interpretation, and suspect what he meant to say was that the 6 year rule applied under bankruptcy, IVA and potentially debt management plans as well - so in that regard there is little difference.

I guess the trick here is to be extremely cautious about seeking any form of credit after an IVA has concluded. Creditors are unforgiving the second time around, and as you have been used to not borrowing money for some time, the equivalent of your IVA contribution can be used as savings.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[DebtDummy]

Thank you Melanie for taking the time to answer my questions.
[x2x]