If you are suffering from huge debts, ecured loan IVA may be a good option for you. This debt relief option requires creditors to agree to a repayment plan in most cases. If you don’t get the required seventy-five percent approval, you will find yourself in a difficult situation where your creditors will ask for more money than you can pay or they will try to seize your assets to get a larger share of the repayment amount.
The only real downside of a secured loan in an IVA is that the debtor cannot remortgage after a secured loan. In Steve’s case, he tried to remortgage but was refused by most high street lenders. As a result, his IP proposed a standard 12-month extension variation. The creditors approved the change. Recent IVAs with secured loan clauses have forced debtors to release their equity. Regardless of whether the IVA is right for you, it is crucial to seek professional financial advice from an independent financial adviser.
In addition to secured loans, IVAs can also be used to settle unsecured debts. These debts can be associated with high interest rates, and include unpaid income tax, utility bills, and mobile phone contracts. However, it’s important to remember that creditors may still take legal action against you even if you have an IVA. In such a case, your IVA nominee may apply for an Interim Order, which will stop them from taking legal action against you.
When looking for a secured loan, make sure you know the type of loan you’ll need. Most loans are secured against a property, so if you fall behind on repayments, the creditor may take your home. Moreover, it may be difficult for you to obtain credit while in an IVA. If you’re a landlord, it’s vital to protect your home and property by paying off the loan early. You should also inform your IP of any early payoff so that your IP can make necessary adjustments.
The IVA process requires you to get the permission of 75% of your creditors, known as ‘by value’. If your creditors refuse your IVA, they may haggle over the terms, including asking you to borrow more money, including your assets, or extending payments. Your IP may ask you to pay additional fees and may even take court action to get their money back. It’s important to consult your IP before signing up for an IVA as failure to do so may result in bankruptcy and the loss of your home.
The benefits of an IVA are that it helps you get back on your feet financially and makes repayments more manageable. In fact, when you get approved for an IVA, your creditors will be more likely to accept the plan and will not file bankruptcy. It’s a great option if you are struggling to pay your debts, especially if you have poor credit. But remember that the benefits of an IVA are worth the risk.