Can I sell my house after an IVA?


If you’re considering an 
IVA (Individual Voluntary Arrangement), you’re probably wondering if once the insolvency solution is complete, you can sell your home.

An IVA and your property

The risk of losing your home can be stressful but there is no requirement for you to sell your property as part of an IVA.

The standard term for an IVA is five years. However, if you own a property, your creditors would expect you to release capital from your home to pay off your debts. For this reason, it is normal for the IVA Company – PayPlan is an example of one of these – to ask you to attempt to remortgage your home to release some of the equity. In an IVA, this is referred to as the equity clause.

However, it’s very rare that people can successfully remortgage their home while in an IVA, as an IVA severely impacts their credit rating – meaning lenders are unlikely to accept an application for credit.

If you are unable to re-mortgage your IVA will be extended, requiring you to contribute up to 12 months of extra payments to make up for what the creditor may have received from your home being re-mortgaged. If you do not have any equity in your home, you will not be required to re-mortgage or extend your IVA, due to the equity clause.

Can I sell my house after an IVA?

Yes, once your IVA is complete the property is yours to do with as you wish.

It is important to ensure that you have your IVA completion certificate before proceeding with a house sale.  This simply confirms that your IVA has been successfully completed, meaning that your IVA creditors are unable to chase for further payment.

We recommend you also wait to be removed from the Insolvency Register – this should happen within three months of you receiving your completion certificate – and then take some time to rebuild your credit rating.

This is because obtaining another mortgage if an IVA is still listed on your credit report – and it will usually remain there for six years from the start of your IVA – may mean mortgage lenders will be hesitant to offer you a mortgage at a good rate. You may also need to save up for a deposit for a new property.

Assets in the future

While creditors can no longer claim against your home and its equity, on completion of your IVA, there are other assets they may still have access to.  Any PPI claim payouts related to a debt taken out before your IVA may need to be paid to the IVA company – who in turn will pay your creditors. This applies even if the payment is made after the IVA is complete.

We have more information about this in our guide on the site. However, it’s worth noting that you only have until 29th August 2019 to make a PPI claim.

Selling my house while in an IVA

If you sell your home while you are still in an IVA, your IVA Company is likely to ask for most of the equity from the sale to be paid into your IVA.  

Selling a property and obtaining a new mortgage while you are in an IVA is very difficult. This is because you are unlikely to have any money from the sale to put towards buying a new property and will find it hard to save up enough money to put towards your deposit either.

It’s also very unlikely that you will be able to obtain a mortgage while in an IVA. Your credit rating will be very low and the IVA may act as a red flag to creditors considering your application. Depending on your circumstances, it may be better to wait and refrain from selling your house until your IVA is complete and your creditors are no longer entitled to any equity in your property.

For more information about IVAs and your property, contact our team on 0800 316 1833, You can use our live chat service or request we contact you.