If you are in a financial bind, an Individual Voluntary Arrangement (IVA) can help you. This type of arrangement allows you to make payments on both your secured and unsecured loans, thereby saving your home. However, you should keep in mind that an unsecured loan does not give the creditor the same protection as a priority debt. Its biggest advantage is that it usually has a lower interest rate.
A secured loan is debt secured against a property or other asset. If you cannot make the repayments, the loan is likely to be canceled. An IVA allows you to avoid bankruptcy and restructure your debt. If you do not pay your debt, the lender may reclaim the asset as collateral. This is a great way to save your home and avoid bankruptcy. However, the process of implementing an IVA is not right for every borrower. There are many benefits to a restructured loan, so be sure to read on to discover more about this process.
One of the biggest benefits of a secured loan is that it can be much cheaper than remortgaging. The reason a secured loan is often more affordable is that the borrower does not need to appear in court to repay it. Furthermore, the process of implementing an IVA requires less paperwork than a traditional bankruptcy. It takes about four to six months, and you don’t have to pay court fees. Moreover, a secured loan will enable you to make repayments more easily and avoid fees.
A secured loan can be the perfect debt solution for those who cannot afford to pay their full balance. Using an IVA allows you to pay back your debt over a longer period of time, and will free up a substantial amount of your resources. Furthermore, the payments that you make each month will be divided between the creditors. At the end of the plan, any unsecured debts that remain after the IVA are written off.
An IVA can also cover unsecured debts, such as credit cards and loans. The only exception is if you have assets worth more than the total value of your debts. A secured loan can be included in an IVA if you have permission from your creditor, which is unlikely. IVAs can include unsecured debts of any amount, but the fees are too high for those with debts under PS10,000.
The credit rating will be damaged by an IVA, so if your circumstances change, you may have to seek a new solution. If the IVA is rejected, your creditors may seek repayment of the debt. It also remains on your credit file for up to six years, so it is essential to remember this. You may even end up worse off than when you started. You may be denied credit for a long time. The creditor’s assessment of your situation will determine whether you can be approved for any further credit.
The advantage of a secured loan is that it allows the creditor to balance the risks and benefits of a loan. A secured loan can be used as collateral in the event you have trouble repaying the loan. In addition, a secured loan is treated as a priority debt during an IVA. A monthly allowance will allow you to make payments on your secured loan. If you fail to meet this payment, the creditor may decide to sell your property to recoup their loss.