Effects of IVA or Debt Management On your Credit rating

Trying to apply an iva or debt management can at all times have a very harmful outcome on your credit ratings.

On the contrary, you have to keep in mind that even if you do not act anything and simply allow your debt to raise just the way it does, can constantly get worse the situation for everyone, and so it also has a depressing consequence.

There are thousands of individuals around the sphere who are distress from debt troubles and in case this is the case with you then you are convinced that you are obtaining little or more debts that you are just not able to pay back.

Under this condition, you should always consider looking for recommendation or help of an expert debt management plan (DMP) or even Individual Voluntary Arrangement (IVA).

Prior to you can search for some help you just have to understand that both these solutions are of dissimilar formats.


Always accept in mind that a debt management plan is considered as a gentleman's agreement that is done in between a creditor and yourself, therefore, you can undertake and lower all the repayments that you have to make so that the amount is more affordable and you can make the payments easily.

But if we address of Individual voluntary arrangement then we can speak that it is a formal type of agreement that is made in between a creditor and you, as a result, you have to aim and make as much of fee as feasible within a desired period of time.

The time period is usually set to nearly 5 years in nearly all cases. Hence if the preferred time is finished then any of the unpaid amounts are generally written off.

Even though both the above-said options are considered as different, but you have to keep in mind that the outcome of these on your credit rating might actually be similar.

Thus if you ever think like making use of either debt management plan or IVA, then it is possible for you to stop making all of the repayments that you generally would do to your collectors on every month basis.

There is also the probability that all your lenders might actually issue a legal notice against you as you possibly will not be making their payments. Therefore these default notices that you could receive shall all the time be reflected in your credit rating file against you.

This is also a single reason that can in fact damage all your precedent credit ratings critically.

Always bear in mind that in case you are ever issued by any such default legal notice then it may also work as a type of warning for a number of other lenders so they could in no way lend you any money additional, therefore it may in fact not be probable for you to have a loan of any other money in the near future.

This is a situation that you can, in fact, expect to arise when you plan to go for a debt management plan or IVA. If you want to get better all your credit ratings after the issue of the default notice, it may not be viable till you pay back all your debts.

Therefore if you go for IVA this could not be possible before 5 years and in the case of DMP, it may not be possible till your debts are clear.

So chances are that under both conditions your credit ratings might get affected for a longer period of time.