When you’re considering an IVA, you should know exactly what is included in the plan. Unsecured loans can be included if you can make reasonable contributions for five years. For example, if you have a home equity loan, payment on it is included in your total expenditure calculation. If you can’t make your payments, you may be forced to sell your home, leaving you with the debt.

If you decide to apply for an IVA, you’ll need to make sure your creditors agree to the plan. You’ll need 75% of voting creditors to get it approved. That means that they hold 75% or more of the debt you owe them. If you don’t meet this criterion, you’ll need to negotiate with your creditors. Some creditors may want you to borrow more money or include more of your assets in your proposal, or extend the repayment period.

IVAs aren’t right for everyone, so it’s important to seek out advice from a professional before applying for one. However, if you’re under financial difficulties and need to avoid bankruptcy, an IVA could be the best option for you. The government-backed website Money Helper can help you decide if you’re eligible. You’ll also need to find an Insolvency Practitioner. This person will review your debt level, income, and expenses, and draft a payment plan based on these figures. The Insolvency Practitioner will charge a fee, which is incorporated into your monthly payment.

IVAs also work for unsecured loans. In some cases, lenders will apply to court to obtain a charging order to secure their debt. However, in these cases, the repossessed assets may not be sufficient to cover all the debts in your IVA. Therefore, your creditors will still receive a portion of the debt you owe.

However, you need to understand that if you’re unable to make your monthly payments on your secured loan, you may not be eligible for an Individual Voluntary Arrangement. While IVAs can help you to get back on your feet, they do come with some risks. For example, your creditors may not accept your application if your debt is small, so you might want to look for alternative methods of debt relief.

If you have a high-value asset as collateral, you may be able to qualify for a secured loan. This type of loan is a safer option for both you and your creditor. The interest rates on secured loans are lower than those of unsecured debt, which can make the process of paying off a secured loan easier.

Secured loans are similar to other forms of credit. In return for the loan, you agree to offer your home as security. If you can’t make the payments, the lender will be forced to sell your property and take part of the proceeds. Secured loans are often used for large amounts of money, such as for home improvements or university tuition.