Insolvency and bankruptcy aren’t the only options for struggling borrowers. An IVA can be a viable solution, but there are certain requirements to meet before your creditors will agree to your plan. First, you need to meet with your creditors and explain your situation. If they approve, you can then apply for an Interim Order that stops all legal action until the Creditors’ Meeting.
An IVA can be beneficial if you have multiple loans or are trying to keep your home. Getting an IVA can help you with both types of debt, but you must remember that a secured loan has its advantages. Unlike an unsecured loan, a secured loan can be repaid if you can sell it. This means you can avoid foreclosure or bankruptcy.
You can include both your priority and non-priority debts in an IVA. Unsecured debts don’t have the same consequences as priority debts, but falling behind on unsecured debts will still affect your credit rating and result in additional fees. Moreover, the longer you leave the problem unattended, the more likely you are to become bankrupt.
Getting an IVA allows you to pay off your debt in five years. This means that you’ll have fewer monthly outgoings while getting your finances back on track. However, you should be aware that it’s not advisable to borrow more than PS500. Taking out loans larger than this amount is against the terms of the IVA and could result in your termination of your IVA. You’ll also risk being sued by the creditor if you’re caught doing so.
The only downside to an IVA is that your credit rating will suffer. Your credit report will show an IVA on your credit history for up to six years and can have a negative impact on your ability to obtain future credit. Consequently, if you want to get back on track, you should avoid an IVA.
An IVA is a legal agreement where you repay your debts in small monthly installments over a fixed period of time. When the arrangement is completed, your unpaid debts will be written off. You can also choose a lump sum or short term arrangement. There are also some IVAs that combine lump sums and instalments.
Another option for an early settlement of an IVA is when a friend or family member has the money to pay off the debt. Your IP will accept the lump sum if you get it from a third party. The person you pay will have to provide documentation to your creditors that they’ve received this money. It will not reduce the length of your IVA, but it can help you pay off your debts faster.
Another benefit to an IVA is the fact that it can help you restore your credit score. Unlike unsecured debt, home equity loans are safer to the lender and the borrower. They are also significantly cheaper than other types of debt.