A secured loan is often a good option for people in an IVA who want to avoid paying too much interest on their mortgage. However, it is not an option for everyone. For instance, if you don’t have any equity in your home, you may find it difficult to find a reputable lender and get a good rate of interest. You should talk to an IP about your options before making any decisions. If you make the wrong decision, you could risk losing your home or becoming bankrupt.
If you decide to use an IVA, you should know that it will impact your credit rating. The credit rating is the score you get from the credit reference agencies, which gives them an idea of your reliability as a borrower. A higher score means you are more trustworthy to lenders. However, an IVA will lower your credit rating for six years. This can make it difficult to get loans, apply for mortgages, or open bank accounts. The good news is that the details of your IVA are removed from your credit history after six years.
A secured loan IVA is a good alternative to bankruptcy and can help you keep your assets. It can delay repayment of your unsecured debt while you pay off your secured loan. The only drawback is that you may have to pay a higher interest rate in the short term, but your monthly payments will be lower in the long run. Another advantage of an IVA is that it allows you to choose which creditor you want to deal with, and you know exactly what your lender is doing.
An IVA should be used only if you cannot afford to pay off your creditors in full. If you don’t meet the agreed upon repayments, the IP can take action against you, and you may not be able to continue with your business. A bankrupted business is difficult to sustain, especially if you own a small business.
An Individual Voluntary Arrangement (IVA) is a legal debt solution that allows you to make affordable monthly payments to your creditors. The goal of an Individual Voluntary Arrangement is to pay off your debt over a five or six-year period. The duration of an IVA depends on how much you owe and the type of debt you have. Some IVAs include monthly instalments while others include lump sums.
An IVA will not cover unpaid child maintenance, court fines, or student loans. Secured loans are debts that are secured by an asset. Examples of these include mortgages and hire purchase agreements on cars. A fully secured debt is unlikely to accept a settlement that includes dividend payments from the lender.
An IVA may be the best option for you if you are facing substantial debts from several lenders. If you are in this situation, you should speak to a debt expert who can advise you on the best option.