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What Debts Can I Put Into an IVA? Complete Guide

Debt Management Plan

Individual Voluntary Agreements are designed to support people who have fallen behind on their debt, to one or more lenders, & renegotiate the terms of their loan. What Debts Can I Put Into an IVA And whilst your lender is not compelled to approve your request for an IVA settlement plan, they’ll often consider it if the alternative option is you declaring yourself bankrupt – in that case, they’d get less of their money back.

Individual Voluntary Agreements can give the much-needed time in which people can easily organised their finances & can allow them to deal with monthly payments that are altogether more manageable. But, you need to be aware that IVA settlement plans do carry certain risks & shouldn’t be agreed to without the proper thought & care.

So, here in this guide, we will be going to define exactly which debts might be placed onto an IVA settlement plan & which debts fail to qualify.

Today’s Guide Define-

  • Debts can be placed on an IVA settlement
  • Secured loans & mortgages
  • Levels of debt you will be able to put on an IVA
  • Debts that don’t qualify
  • Forgotten debts

Debts can be placed on an IVA settlement

Different forms of debt can be included in an IVA settlement plan. The undermentioned debts are the ones that IVA settlement plans are most commonly used for:

  • personal loans
  • Overdrafts
  • charge card
  • credit card
  • store card

So, all these debts fall into the class that is referred to as “non-priority debt”. And when your IVA settlement plan has been approved, you can place other debts, named “priority debt”, into the arrangement, like:

  • council tax
  • tax credit debt
  • energy bills debt

Secured loans & mortgages

Secured loans are debts that people can take out with the understanding that a piece of their property will be given up if they are not able to keep up with the loan. It means that if you are not able to manage to stay on top of your debt, then your lenders have the right to take possession of the asset or property that your debt is secured against.

iva debt advice

You’re allowed to incorporate a secured loan into your Stepchange IVA settlement plan but your lender is under no obligation in order to accept this proposal. This is actually very unlikely that your lender will enable you to do this since the only incentive a creditor has to accept an IVA settlement plan is the fact that they might not be paid otherwise, in the case of a secured loan the creditor can simply take the asset in order to recoup their outlay.

Levels of debt you will be able to put on an IVA

There isn’t any kind of limitation to the amount of debt that you will be able to put onto an IVA settlement plan; however, it’s worth noting that if the debt is under 10,000 pounds, there is a strong chance that your creditor will not agree to the arrangement.

There isn’t any limitation to the number of different debts that you place on to an IVA settlement plan but again it’s worth noting that this form of solution is usually suited to people with over 3 debts to more than 2 creditors.

Debts that don’t qualify

There are certain types of debt that can’t be incorporated in your Individual Voluntary Agreement, these include:

  • child support
  • student loans
  • maintenance arrears
  • court fines

If you’ve these debts in addition to the ones that you’re going to incorporate on your IVA settlement plan, you need to be sure that you can afford to pay them back alongside the monthly payments that you’ll be making on your IVA settlement plan.

Forgotten debts

When your IVA settlement plan has been approved, you might realize that there are certain debts that you’ve unknowingly not incorporated in the settlement arrangement. If it’s the case, it is pretty imperative that you inform your IP as early as you realize. Any lenders that fall into this category will be categorized legally as “unknown creditors” & your IVA must  have certain set out terms & conditions regarding the way in which these lenders will be repaid.

So these unknown lenders might be unhappy with the IVA settlement plan that you may have set up with your other creditors. If it’s the case, they should make a formal challenge to the court; however, it needs to be done within 1 month of being added to the IVA settlement plan, otherwise, they’ll be forced to accept the existing rules & regulations.

Joint debts

You may have certain ‘joint debts’ which are borrowed by you & another person, such as a partner.

Well, as we are aware of the fact that Individual Settlement Agreement can only cover one person, therefore, the other person will still be liable for the entire of the debt. It might not be a great idea in order to include joint debts in the IVA settlement plan.

You can not take out a joint Individual Voluntary Agreement, however, you & the other person can take out individual IVAs that are linked – & these are usually known as ‘interlocking’ IVAs. Your professional insolvency practitioner can advise you about this.

And if you have plenty of joint debts & the other person does not want an Individual Voluntary Agreement, you may be required to take different opportunities.

Final Victory

This comes to the end of the What Debts Can I Put Into an IVA. Hopefully, we have provided sufficient information about this matter. If you have further questions or queries in your mind, you can let us know. You can also visit our official website or Call step change debt charity number to get useful information regarding IVA settlement plans. So, stay tuned with us!!!

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