home loan finance blog
IVA debt solution programs have caught the attention of many people in recent years, simply because more and more people are struggling to make repayments on their current credit. As UK society gets into more debt than ever before, there will undoubtedly be many more applications submitted into the future too.
In order to provide you with a little more information, here are the FAQs!
What are the criteria I have to meet to apply for an IVA?
Any individual applying for IVA debt solution agreements must be unable to make monthly repayments on her or her debts at the current level of minimum payments and interest rates.
Does an IVA affect my credit rating?
It does in the short term by default. Your name will not be placed on a blacklist and your actual rating will not be affected, but all credit currently held by the IVA debt solution applicant will become inactive upon acceptance of the agreement. Until the agreement has run its course, you will not be able to apply for another loan or credit card, but the repayments you make will actually help to raise your credit rating as long as you maintain repayments!
Will I have to sell my home to fund an IVA?
No. You may have to cash in an endowment policy if you have one linked to your home, but you will not have to sell the home itself.
Why may my IVA be rejected?
Your IVA debt solution agreement may be rejected if companies do not agree with your terms. However, this is only if those holding over 25% of the total debt between them reject it. If the majority agree and have over 75% of your debt between them then it will be accepted regardless of whether others reject it or not. All of the creditors are then legally bound by it.
What should I expect to pay?
The amount you pay will depend on your level of debt and disposable income. Your disposable income may include your regular income, savings and investments, and assets such as endowment policies.
Around 6000 people enter into an IVA every year at the moment, but that looks set to rise as more individuals become aware of their existence. As a viable alternative to bankruptcy, they are certainly proving to be extremely popular amongst those individuals that have heard of IVA debt solution!