Rent arrears can result in being evicted from your home. When dealing with debt can you include rent arrears in an IVA? Rather speak to someone? Call 0800 077 6180.
Included in this article:
- Rent arrears with your current landlord
- Debt from previous properties
- Clearing arrears and maintaining ongoing rent payments
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Rent arrears with your current landlord
Trying to put any rent arrears from your current landlord into an IVA is a bit difficult. Ultimately they are within their rights to evict you for non payment of your tenancy agreement which you may be keen to avoid. If you don’t mind leaving the property, then this could be an option.
If you are keen to stay in your current property, then it would be reasonable for your IVA to exclude the rent arrears debt. Core living costs such as rent are a priority over other debt payments. You would have an amount set in your budget to pay back the arrears over a set period of time.
Instead of a private landlord, you may rent property from the local council or a housing association. If so, you could possibly include your rent arrears in an IVA. You would have to prove that ongoing rent payments were affordable for you.
Note – if your IVA budget includes an amount for rent arrears, once your rent arrears are cleared that extra budget would be added to your monthly IVA payment.
Debt from previous properties
One of the standard rules of an IVA is that any unsecured debt you have must be included. A budget to repay rent arrears from a current property can be included in your living expenses to avoid you being evicted.
However there is no such issue with arrears from a property you have already moved out of. These debts can certainly be included in an IVA. Once your Arrangement is finished any amount still outstanding will be written off.
You may be concerned about whether your previous landlord will be prepared to agree with the Arrangement you propose. However they can only block it if their debt is more than 25% of your total unsecured debt. If their debt is less than this and the other creditors agree to your proposal it will be accepted and your previous landlord will have no choice than to be included.
Rent arrears with a previous property would be like any other secured debt, e.g. a loan or credit card. They would all be included in the IVA.
Clearing arrears and maintaining ongoing rent payments
Current rent arrears cannot be included as part of the debts dealt with by an IVA. However the IVA may still provide you with a solution to your arrears with a current landlord.
This is because when you are agreeing your IVA living expenses budget you are allowed to include a provision for repaying your rent arrears at a sensible rate. The amount you pay into your Arrangement is then calculated after these expenses have been accounted for.
Once you start the Arrangement you will then always have enough money to pay your ongoing rent and start to repay your arrears. You will not have the pressure of trying to keep up with the payments to all of your other debts.
Tell your landlord that you are starting an IVA. They should feel more confident that you will be paying regular rent and clearing your arrears. This could be enough for them to allow you to remain in the property and not evict you.
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