If you have moved abroad you can still use an IVA to manage your UK debt. A major downside however is having to maintain the monthly payments which may be a significant drain on your resources.

Included in this article:

• Is it possible to do an IVA after you moved abroad?
• Do you have to return to the UK to apply?
• How is your credit rating affected in your new country?
• Would it be better to go bankrupt?

Want help to start an IVA? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts

Is it possible to do an IVA after you moved abroad?

After you moved abroad, you may have not been able find work as quickly as expected. You might be working but your living expenses are higher than you thought they would be.

Where this is the case, sending money back to the UK each month to pay debt is definitely going to be more difficult.  An IVA can help in these circumstances.

Once the Arrangement is in place, your monthly UK debt payments are reduced to a single affordable amount. You pay as much as you can afford for 5 years. After this any outstanding debt is written off.

In order to qualify you have to apply within 3 years of leaving the UK. In addition, you will need to be able to afford a minimum payment of at least £100/mth into the Arrangement.

Struggling to get your head round all of this? We can help. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.

Do you have to return to the UK to apply for an IVA?

It is not necessary to return to the UK to apply for an IVA. You can complete the application process remotely.

You will need to have at least 1-2 conversations about your circumstances on the telephone. To reduce costs, you can do this using Whatsapp, Zoom or the like.

You will need to e-mail copies of various paperwork to support the information you give about your circumstances. In particular, you will have to prove your income with local wage slips or bank statements.

Once in place, you will have to make the agreed payments into your IVA in UK Pounds. You therefore need to include the cost of international bank transfers in your living expenses budget.

You must also consider possible exchange rate fluctuations. Remember, if the pound increases in value, your payments will become more expensive.

How is your credit rating affected in your new country?

If you start an IVA, a record of the Arrangement will be recorded on your credit file in the UK. This will make your Credit Rating in the UK poor.

However, you should not be affected in your new country. This is because credit reference agencies do not have the facilities to check your credit rating in different countries.

Given this, you are likely to be able to get credit in the country where you are living now without a  problem. Your ability to get things such as a local mobile phone contract or bank account should not be affected.

Under the terms of your IVA you are not allowed to borrow more without the agreement of your IP. Given you live abroad you may be able to do so. However it is ill advised. Borrowing more may mean you struggle to pay your IVA and put it at risk.

Would it be better to go Bankrupt?

Using an IVA to manage your UK debt after you have moved abroad can be a major burden. Even though the monthly payment is reduced, it can still be a considerable drain on your finances.

In addition, an annual review of your income and expenditure will be carried out every year you are in the Arrangement – normally 5 years. If your income goes up, you will have to pay more. You will find this situation increasingly restrictive.

Given these disadvantages, before committing to an IVA, you should also consider the option of going bankrupt.

If you go bankrupt before you move abroad, all of your debt will be written off. In addition, you may not have to make any further payments towards your debt at all.

The fact that you are bankrupt in the UK will not affect your status in the country you are now living in. Your local credit rating is not affected. For this reason, your local bank, employer or landlord will not find out unless you tell them.

Need further advice about starting an IVA or going bankrupt if you have moved abroad (or are planning to do so)? Call us (0800 077 6180) or complete the form below.