If you are living with parents how will they be affected if you start an IVA? Generally speaking there will be little or no impact on them or their property.

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• Will your Parents’ Property be Blacklisted?
• Are you allowed to pay your Parents Rent?
• Are your Parents Liable for your Debt?
• Can you Move Out during your IVA?

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Will your Parents’ Property be Blacklisted if you do an IVA?

Your credit rating will be affected if you start an IVA. However this will not affect anyone else living at the same address. The record of your Arrangement will only be recorded on your credit file. It will not appear on anyone else’s.

This means that non of the other members of your family or anyone else living with you will have credit problems as a result of what you are doing. Their ability to get new forms of credit will not be restricted.

The same thing goes for your parents’ property. Because credit ratings are associated with individual people not property your IVA will have no impact on their home at all. It will certainly not be blacklisted.

There is no property blacklist. If you start an IVA while living with parents their property will not be affected.

If you are Living with Parents can you pay them Rent during an IVA?

An important part of the IVA application process is calculating your disposable income. This is the amount you can afford to pay into the Arrangement each month.

In order to achieve this you will need to produce a living expenses budget. If you are living with parents you must include an amount in your budget to allow you to pay them a reasonable rent.

The maximum you can budget for is based on the amount you would need to pay if you were to move out and rent a room elsewhere. You can research the going rate for lodgings in your area. However generally speaking £75-£100/week would be reasonable.

You can pay rent to your parents each month. The maximum amount should be no more than the going rate for lodgings in your area.

Are your Parents Liable for your Debt if you start an IVA?

The general rule regarding debt is that no one else is liable for what you owe. It does not matter if you are living with parents or anyone else. If you start an IVA they cannot be forced to pay your outstanding balances.

There are however certain exceptions to this. The first is joint debt. If you borrowed money in joint names or have a joint overdraft both named parties are liable. If one does not pay the other still has to. Having said that it is unlikely that you will have a joint debt with one of your parents.

What is more likely is that you have taken a loan and one of your parents has acted as a guarantor. If you start an IVA in this situation your parent will then become liable because they guaranteed the debt. They will then be liable to pay it.

If you have a guarantor loan it may prevent you from starting an IVA. Speak to us for more advice.

Can you Move Out of your Parents’ Home during your IVA?

An IVA does not stop you from moving house. You are allowed to move from your parents home into alternative accommodation (perhaps a shared house or alternative lodgings) during the Arrangement if you wish.

However you will need to be mindful of any increased costs associated with moving and how they affect your IVA payments. If the amount you have to pay for rent or bills increases this could put your Arrangement at risk.

If you have to move (perhaps because of a change in job) your IVA company may be prepared to help you by reducing your payments. However it is likely that the length of the Arrangement will be extended.

Moving to a rented property could be difficult because you are likely to fail many letting agents’ credit check.