Your employer is unlikely to find out about your IVA unless you tell them. Your IVA is a private matter between you, your creditors, and the Insolvency Practitioner (IP) managing your case. However, if your employer conducts a credit check or you have a job that requires a high level of financial responsibility, they may find out about your IVA. In these cases, it's best to be honest with your employer and explain your situation.
When you enter into an Individual Voluntary Arrangement (IVA), it is normal to worry about who may find out about your arrangement and therefore know that you are in debt. This can be an especially daunting thought if you have always remained tight-lipped about your personal finances.
But as well as worrying about how your friends and family may take the news, it can be equally nerve-wracking to think about how your employer may react if they were to be informed that you were struggling to pay your debts and paying into an IVA every month.
In this guide, we’ll cover everything you need to know about entering into an IVA whilst employed including what an IVA is, who will know about your IVA, if your IVA will affect your current job, if your IVA will affect your future job prospects, if you can get an IVA if you’re unemployed and lastly, if you can get an IVA if you’re self-employed.
Reduced By 72% * monthly payments are based on individual financial circumstances An IVA is a legally-binding debt solution that can help you repay your unsecured debt through a series of affordable monthly payments over the course of five years (six years if you miss a payment or have a payment break). When your IVA comes to an end, your remaining debt will be written off by your creditors and you will be declared debt-free. Unlike other debt solutions, IVAs can only be set up and managed by an Insolvency Practitioner (IP) who will act as an IVA supervisor to communicate with your creditors on your behalf and ensure they receive a percentage of your monthly IVA payments. An IVA will be noted on your credit file for a total of six years from the date it was approved and this will lower your credit score which can make it difficult to get approved for further credit such as a loan, mortgage or phone contract. However, compared to bankruptcy, an IVA will give you greater control over your assets and is less likely to affect your job. When you enter into an IVA, only the people that will be directly affected by it will be informed. This includes the people or businesses you owe money to such as banks, credit card companies and loan providers. Because of this, your family, friends, relatives, neighbours, acquaintances and even your employer should not be informed of your IVA unless you owe them money directly or you tell them yourself. The only other way your employer may know about your IVA is if they run a credit check against you but this is extremely rare and it should be explicitly stated in your employment contract that they are allowed to do this. Once your IVA is accepted by your creditors, it will also be listed on a public database known as the Individual Insolvency Register which is generally only accessed by creditors and credit reference agencies but can be accessed for free by any member of the public if they wish. IVA is debt solution which allows you to write off up to 81% of unsecured debt with government legislation If you’re having financial difficulty and thinking about an IVA, you may be holding off because you’re worried about any IVA employment restrictions being placed on you by your current employer. But in most cases, entering into an IVA will have no impact on your current job and you should have no problem continuing your employment as normal for the duration of your arrangement. However, if you deal with other people’s money on a regular basis, there are some sectors where having an IVA could affect your employment including: This isn’t the case for all jobs in these sectors and regardless of which industry you work in, you should always find out whether entering into a formal debt solution is likely to affect your current job before you apply for an IVA. This can be done by checking your employment contract or having a confidential conversation with the HR department at your place of work. "Professional staff - they were understanding and non-judgmental. Fantastic, quick service too. Would recommend to anyone!" Michael, Sunderland If you’re thinking about switching jobs whilst in an IVA, it is normal to worry about whether any prospective employers will know about your arrangement and base their decision on that information alone. The truth is, most employers don’t run credit checks on prospective candidates and therefore shouldn’t find out about your IVA or even that you have unpaid debts unless you are applying for a job where you deal with other people’s money. What’s more, employers are legally required to let you know if they are planning to run financial checks against you before they hire you and you are within your right to refuse. Technically speaking, there is nothing stopping you from getting IVA if you are unemployed. However, if your total income is based on benefits, you may struggle to get approved for an IVA and your IP may suggest an alternative solution for dealing with your debts. This is because benefits are only designed to cover daily essentials such as rent, food and bills. They may also provide debt advice to help you improve your financial circumstances so you can apply for an IVA in the future. If you have another source of income aside from benefits payments or a friend or family member is prepared to help you out financially, this can boost your chances of being approved for an IVA and can help you repay your debts even if you’re not currently in formal employment and earning a monthly wage. If you’re self-employed, you can get a self-employed IVA to allow you to continue trading as normal whilst repaying your business debts. This has made them a popular alternative to bankruptcy which may require you to shut down your business and surrender your assets depending on which industry you work in. Maxine McCreadie Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed’s, and various other debt solutions. Our debt experts, and insolvency practitioners continually monitor the personal finance and debt industry, and we update our articles when new information becomes available. Current Version March 7 2023 Written by Edited byHere's an example of how we can help
Let's say you owe...
Bank Loans
£11,152
Short Term Loans
£2,226
Phone Bills
£302
Credit cards
£2,395
Store cards
£648
Phone Bills
£1,408
Overdraft
£172
Total amount
£18,303
Customer monthly repayments before and after an IVA
What is an IVA?
Who will know about my IVA?
Will my IVA affect my current job?
How we helped Michael
Will my IVA affect my future career prospects?
Can I get an IVA if I’m unemployed?
Can I get an IVA if I’m self-employed?
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Maxine McCreadie
Maxine McCreadie
