Those with a history of IVAs and unpaid mortgages may want to consider the benefits of ecured loan IVAs. These plans can help borrowers to eliminate debt and rebuild their credit rating. However, people with large secured debts should not attempt an IVA if they are still making monthly repayments. An IVA is designed to address unsecured debts, not secured loans. You can still make repayments on your mortgage, but you won’t be able to use your home as collateral.
Unsecured debts can also be included in an IVA, including overpaid benefits or income tax. Unpaid utility bills, such as phone contracts, are often associated with 3rd party debts, and are considered unsecured credit. However, you may not be able to use your credit card during the IVA. If you are interested in this option, you should consult with a debt advisor before beginning. A qualified debt advisor can help you determine whether an IVA is right for you.
Compared to an unsecured loan, a secured loan IVA requires 75% of creditors’ consent. In a secured loan IVA, if your debt is over 75% of your property value, the creditors will vote against it. You can still negotiate with your creditors to reduce the debt limit and avoid bankruptcy if you have to. But if you have a large unsecured debt, you may be better off with a secured loan.
As an IVA will remain on your credit file for six years, it will be difficult to get a loan or credit in the future. Your lender may refuse to give you a loan if you have an IVA. And if they do, they will most likely charge you a high interest rate and impose strict conditions. And while you may be able to find a lender who accepts your application, the risk of losing your credit is too high.
A secured loan IVA may not be a good idea for all people who have substantial amounts of debt. However, if you have a substantial amount of debt, an IVA may be a better alternative to filing for bankruptcy or insolvency. Make sure to talk with a qualified debt professional before making the final decision. An Insolvency Practitioner is highly experienced in this area. They can help you decide if an IVA is right for you.
A secured loan IVA is a great way to make monthly mortgage repayments more affordable. The main requirement is that you have at least 15% equity in your home. If you cannot meet these requirements, you may have to remortgage your property or sell it. This option can be challenging to find, so your best bet may be to talk with your IP about your options. Otherwise, you may end up losing your home and making yourself bankrupt.
An IVA is not a guaranteed way to reduce your debt. Creditors must meet certain criteria before accepting an IVA. You should be able to pay back at least five pence in every PS1 to your creditors. You should consider speaking to your IP to understand the benefits and drawbacks of IVA. You can also seek advice on your options from National Debtline. It is a free service that offers free and confidential debt advice.