If you have a large amount of equity in your home and have no other source of income, an ecured loan IVA could be a great option for you. An IVA is a debt management plan designed to help you overcome financial difficulties and keep your home. These plans can also be used to pay off credit cards and other debts. However, they must be fair to all parties, including the lender. This article explains how to apply for an ecured loan IVA.
An Individual Voluntary Arrangement (IVA) is a debt relief plan approved by the government. This plan gives you time to reorganize your finances, reduce interest rates, and make your payments more manageable. However, IVAs do come with their disadvantages. Learn more about this government approved option. Here are some pros and cons of a ecured loan IVA. Once approved, it will help you get back on track financially.
When filing for an ecured loan IVA, unsecured creditors are not able to repossess the debtor’s property. But they can pursue you in court with the Consumer Credit Act or file for bankruptcy. Once the IVA is approved, your IVA Nominee will apply for an Interim Order (IVA) – a court order preventing any legal action until the Creditors’ Meeting.
If your EU creditors aren’t happy with your IVA, they may choose to sue you in the UK. This is possible as UK courts will recognise judgements from EU countries before the end of 2020. For this reason, you should seek legal advice to help you decide whether an IVA is the best option for your debt problems. If you choose the option to proceed with an IVA, the fees of your Insolvency Practitioner will be deducted from your monthly payments.
You can use an IVA to pay off credit cards, unsecured loans and other debts. The process can be lengthy and complex, but many IPs offer a free initial meeting. Some, however, will require you to pay an up-front fee before putting forward a proposal. Ultimately, if your IVA is rejected, you may have to pay the fees again. You can also go for a more flexible IVA plan if your circumstances change.
If you fail to repay your secured loan, you must pay a redemption penalty. This penalty may be equivalent to two months of installments. An IVA can have adverse effects on your ability to obtain credit. It may prevent you from obtaining other loans for a few years. Besides, you may have to release some equity in your property to repay the loan. By repaying the loan early, you can free yourself from many restrictions and raise your credit score.
In an IVA, the lender has a legitimate interest in regaining control of the asset that you pledged as collateral. You can sell your home to pay off your debts, and the lender will get a dividend from the sale of your assets. Regardless of the circumstances, it’s important to understand that IVAs are not the right option for everyone. In some cases, it’s a good option to make a secured loan as part of your overall debt management strategy.