When you’re looking for a way to repay your debts, an ecured loan IVA may be a good option. This type of bankruptcy plan can include as many debts as you like. Typically, it’s best for people who owe more than three different lenders. But if you owe more than three, you should ensure that you can afford to repay them before applying for an IVA.
In order to qualify for an ecured loan IVA, you must first obtain the consent of your creditors. If you don’t pay your creditors back, they can sell your assets to cover the debts. Unsecured loans may also be affected by an IVA. However, it’s important to understand the different ways an ecured loan IVA can affect your finances.
The most important thing to remember about an ecured loan IVA is that unsecured creditors are not allowed to repossess your property or take other legal action. As a result, you must closely monitor your creditors’ actions. For example, if they are threatening to repossess your home, you can ask them to stop. An IVA Nominee will be able to get an Interim Order to stop all legal action until your creditors’ meeting.
There are some exceptions to this rule. The first is that you can’t include secured loans in an IVA if your debts are higher than your assets. But if you have a house or other asset that is worth more than your total debts, you can use an IVA to reduce your debts. However, if you have a large amount of unsecured debt, you may find that creditors won’t accept an IVA proposal.
When applying for an IVA, it is important to understand that if you have a high balance in your home, your creditors won’t be able to provide you with a mortgage. As a result, you will need to keep as much of your equity as possible. Your IVA supervisor will decide how much you can afford to repay and which lenders will lend you.
If you have equity in your home, you can also choose an IVA that includes an equity clause. These clauses protect your home and usually come into effect towards the end of the IVA. This happens six months before the scheduled end date and is often around the 54th month of the plan. But you should keep in mind that you may need to refinance your home in the final year of the plan.
The other major disadvantage of an IVA is that it will stay on your credit file for six years. This will negatively impact your credit rating. It will also affect your ability to get further credit.