One question we are regularly asked here at My IVA Adviser is about IVA Loans.
“Is it possible to take out IVA loans?”
Living within the financial constraints of an IVA can require some people to make changes to their personal lifestyle. Creditors in the IVA will insist that the living expenses of the debtor are reasonable and moderate, so as the creditors have a strong opportunity to recover as much as possible of the original debt, without the debtor taking out IVA loans to make ends meet.
To read our article about IVA Loans, or loan applications during an IVA click here.
In short, IVA loans go against the spirit of the IVA.
In most cases an IVA will write off a proportion of your unsecured debts. The IVA payments are calculated so as to allow the person in the IVA to be able to afford their normal living cost, without the need for further borrowing.
Therefore, should IVA loans be required, it is likely as a result of 1 of 2 reasons.
1) Either the person’s original living costs have risen, or not been calculated correctly.
or
2) The person has not made the necessary changes to their life style that would have been required by the creditors, so that the IVA payments could be afforded.
If you find yourself in either of these 2 positions, you should contact your Insolvency Practitioner (I.P.) immediately, and discuss the level of your IVA contribution.
Amendments to the size of your IVA contribution may be necessary, read this article to understand the procedure of making variations to your IVA payment.
IVA loans that are for other reasons, such as car finance or IVA loans to allow the purchase of an asset or holiday, are generally not permitted, and there will be a clause in your IVA proposal which you should use as reference.
If you are still unsure of you obligations regarding IVA loans, contact your I.P.
Alternatively, you are welcome to call My IVA Adviser on 0800 088 7503 and discuss it with us in confidence.
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