Whether you need to make a one-off repayment to repay a secured loan or set up a joint IVA, there are three types of fees associated with an IVA. The nominees’ fee, which is usually PS1,000, covers the preparation of the IVA proposal, administration, and facilitation costs. The supervisor’s fee is between 15 and 20% of your monthly payments and is charged as a flat fee or percentage of the total amount owed. It covers the supervisor’s role in establishing and managing the IVA.
An IVA does not apply to unsecured loans. Secured loans must be approved by at least 75% of the creditors, while unsecured loans do not. If the amount owed is over seventy five percent of the value of the property, the creditors will vote against the IVA proposal. During the IVA, a person can negotiate with creditors and ask for a higher limit on the debt. This way, a secured loan IVA does not affect the unsecured loan.
If you are unable to make repayments on your secured loan, you may want to consider an Individual Voluntary Arrangement (IVA). This is a government-approved solution to help people get back on track financially. Individual Voluntary Arrangements offer time to organize your finances, reduce your interest rates, and make your payments more manageable. But as with any option, there are disadvantages. To find out which one is right for you, read on.
The first thing to know is that secured loans cannot be included in an IVA. This is because payment on a secured loan is often included in the expenditure calculation. But if you lose your house, the debt that remains will be unsecured. If the IVA does not include the secured loan, you may be able to include it in your plan. And you will be given a monthly allowance to pay it off. If you qualify for an IVA, you will be able to pay off your secured loan within two years.
Another option to consider for an IVA is equity release. When you take out a loan against your home, you need to keep at least 15% of the value so that your creditors are not forced to foreclose. Usually, this loan is not unsecured, but it does require a lender to make monthly payments. The maximum loan amount is determined by the lender’s lending limits and how much you can repay each month.
As a consumer, you may be able to benefit from an IVA. The lender has a ‘legitimate’ interest in taking back your property in case you fail to repay your debt. A secured loan is a good option if you need a large sum of money. For example, you could use a secured loan for home improvements, university tuition, or debt consolidation. It is a legal way to deal with your debts while allowing your creditors to get a dividend from your assets.