If you’re looking for a quick way to eliminate debt, an ecured loan IVA may be the answer. These types of debt relief plans require the agreement of creditors, and are typically approved by 75% of them. The process requires negotiation with creditors, who may ask for more money than is available to pay their debt. Other creditors may request your assets be included in the plan or a longer repayment period. Either way, the process is fast and simple.
An IVA is a legally-binding debt repayment plan. If you’re unable to make your payments, the lender is legally obliged to write off your debts. You can choose to set up a monthly repayment plan, take a lump sum, or a combination of both. In any case, you will pay less than you owe, and you can use the time to reorganize your finances and make repayments more manageable. However, an IVA should never be your only option for debt relief.
An IVA can make it difficult to access credit and loans. If you’ve decided to settle your IVA early, you’ll need to pay back the loan that was taken out to settle it. Be sure to discuss your early repayment plans with your IP. If you’d like to amend the terms of your settlement, your IP may set up a variation meeting. These meetings are usually proposed when you wish to change the terms of the original settlement agreement.
While you may not have much equity in your home, you can still qualify for an IVA if you can secure a mortgage that is 85% or more of the value of your home. You should also retain at least 15% of your equity in your home. There are only a few lenders who will offer an IVA loan. The amount of money a reputable lender is willing to loan you will depend on the duration of your IVA and your ability to repay the loan.
You will also have to remortgage your property if you have equity. If you have equity in your home, you may not want to do this. However, you won’t have to sell your home to do this. Besides, it may not be worth the risk of a foreclosure, so if you’re able to do so, you’ll be able to release some equity and pay off the debts.
If you have an IVA, it’s important to understand the rules. You will have to work with an insolvency practitioner to set up and manage your debt repayment. The limit for borrowing is PS500, and borrowing more than that will end up in a bankruptcy or termination of your IVA. Further, you’ll need to meet the IP’s requirements, including the type of loan you’re applying for. The IP should make sure you understand the implications of borrowing money during your IVA.