You might be wondering whether taking out an ecured loan IVA is right for you. The answer depends on your circumstances and your creditor’s response. If you’re unable to make your payments on time, your IVA may be set to fail. If your creditors refuse to accept lower payments, your IVA may be set to fail too. Then, you’ll need to seek legal action against your creditor.
When you’re struggling to make your secured loan payments, you can use different options to get out of debt. There are several types of repayment plans, and the best choice for you will depend on your situation. Generally, the secured loan is best for people with large amounts of debt. In case your debt is too large to qualify for an IVA, you can sell your home to cover it. This way, you’ll be able to repay your debts once you sell your house.
The IVA proposal must be accepted by 75% of your creditors – ‘by value’ means creditors who hold more than 75% of your total debt. If you’re unable to meet this percentage, your creditors may vote against you. They may haggle over the terms of your IVA. They may ask you to borrow more money, include assets, or extend the repayment period. Then they can demand to see your assets before accepting the IVA proposal.
There are several benefits of secured loans. First, they are cheaper than remortgaging. Most people in an IVA are not on the highest interest rate, so a secured loan may actually be a better option. Unlike an unsecured loan, secured loans are easier to repay. Another advantage of a secured loan IVA is that you don’t need to make a court appearance. The secured loan IVA takes only four to six months to complete. You’ll also save money on interest costs and fees, as the secured loan is included as a third party debt in your bankruptcy.
In some cases, the other party on the debt will object to your IVA proposal. If you’re considering taking out an IVA, remember that your bank will not allow you to use your basic bank account while your IVA is in effect. The bank will only let you operate your IVA if you can open an account with the required information. This will protect your credit score as well. And, if the other party on the debt isn’t willing to agree to it, your IVA will not work.
When you file for an IVA, your creditors will receive a list of your assets, including your home. You can include secured loans as part of your IVA, but only if your creditor agrees. It’s not recommended to include unsecured loans in an IVA, as they are not covered by the law. And because the fees are high, it may not be right for you if your debt is less than PS10,000.