credit rating

[mws]

I have just over a year to run on my IVA and I have been told by an independant monetary consultant that my credit rating still remains "black" for up to three years after completion; leading to me not being able to obtain a "normal" mortage. This in contrevention to what I was told when I was "sold" the IVA as in it will remain black for only a year which has been mentioned on many forums here. Who is correct or is there some circumstances that will keep my credit rating low for up to the suggested three years after I complete my IVA?

Thanks,

[chris.g]

Hiya and welcome. Not quite sure, although I was under the impression it was 6 yrs before your credit file was clear.
I'm sure someone will be along soon to answer your question
xx

[MelanieGiles]

Chris is correct in that the entry relating to your IVA will be removed from your credit file six years after the commencement of your IVA.

[Bratlett]

Thanks for the replies I did think it was 6 years from commencement.
So what happens if you take a "payment break" and end up completing it after the normal 5 year period; does my credit rating move right the same amount of time taken for breaks?

[MelanieGiles]

If the IVA is due to extend past six years, it will be removed from the credit files upon its eventual completion.

[Bratlett]

Hypothetical question here (with an element of truth thrown in as well for good measure!). If say at the end of the IVA (5 years plus additional months for "payment breaks") I'm told I still owe money, due to being paid more now than I did when I first started and I had to pay 50% of that back as well, but couldn't afford to pay it (I mean who else can afford to save money during an IVA?) what would be my next course of action? I can't see them letting me extend my IVA until I'd paid off the excess or would they? Or would it be best to get a loan to pay that excess off and pay the excessive interest rate on the loan as my credit rating would still be black?

Any advice greatly received. But I expect I'll need a "sugar daddy" to bail me out!!

[Lord Soth]

If your IVA was approved more recently (I believe from late 2007), you will probably have the 10%/50% rule. This helps significantly as you keep the first additional 10% of your normal take-home pay each month. For those lucky enough to have this clause - of course receive get extra pay - this is really helpful.

The 50% is fair as it gives one an incentive to earn more whilst also giving a higher return for creditors. Many of us pay this monthly to avoid having to save per se however it should, at worst, be picked up at the annual review and paid then rather than after 5 or 6 years (ouch, now that would be difficult, and require monumental discipline to put money aside; I empathise with you).

Your IVA will list your personal conditions and you should find a reference to payment breaks, usually up to a maximum of 2 or 3 for the entire IVA period with the agreement of your IP. I don't feel a loan is the answer (besides, my understanding is that a loan is not allowed in an IVA excect up to £500 and then only with an IP's permission). I suggest you speak to your IP.

[Bratlett]

Unfortunatly my IVA has been going for 4 years and didn't get the benefit of the 10%/50% rule. So it looks like we'll have to be extra "lean" during this last 12 months then to try and pay back the extra. Interestingly my IP is aware of this "shortfall" but has never specifically told me how to get over it. However rather than sweep it all under the carpet and hope it sorts itself out in the end I think I'd better get onto them to get the to give me a route out of it. You'd have thought that after this amount of time in the IVA I'd have come accustomed to having to tighten the purse strings but it's always a struggle. I just hope the missus still thinks frugally when it's complete so we don't end up in the same position as when we started

[MelanieGiles]

I cannot imagine why this is not being monitored on a more regular basis by your IP to see if you need to pay anything over at regular intervals. You should definately try to sort this out with your IP rather than getting a nasty suprise at the end of the day.