IVA PROBLEMS

It’s still possible to get a mortgage or remortgage even if you have an Individual Voluntary Arrangement (IVA).

An Individual Voluntary Arrangement (IVA) is a legally binding. It is a contract made between you and your creditor(s). Usually you will have agreed to make a regular monthly payment to the supervisor of the arrangement for up to 5 years. If you own a house you may also agree to remortgage your house and to release up to 75% of the equity in the house at the end of the arrangement as well as paying contributions from your income. You may well benefit from a talk with a debt counselor. Please consider carefully before taking on yet more loans to pay off existing ones.

The payments you are making on an IVA will be distributed on a regular basis to your creditors. In return for you making a commitment to pay what you can reasonably afford your creditors will normally agree to be bound by the arrangement. The IVA has added powers to a simple contract. The creditors who have not agreed to the arrangement will be bound by its terms.

Once you have set up an IVA and provided you keep to your part of the agreement you will not have any further obligations to your creditors. This often means you will only repay a small amount of your total debts because creditors recognise this is all you can afford to pay within 5 years.

You will be able to get credit after you have entered into an IVA. However the IVA will normally provide that you will not obtain credit without the agreement of the Supervisor of the IVA. Your credit rating will be affected by the IVA but for example if you wish to remortgage your house in order to obtain a better rate of interest this is quite easy to arrange after 12 months.