Keep Your House & Car on an IVA? Key Facts You Must Know
An Individual Voluntary Arrangement (IVA) offers a practical way to manage debts while avoiding the extreme measures of bankruptcy. However, one of the most pressing concerns for UK citizens entering an IVA is whether they can keep their house and car. If you’re facing financial stress and need clarity on this matter, this guide will help you understand how an IVA impacts your assets and what steps you can take to protect them.
How Does an IVA Affect Your House?
In most cases, entering an IVA does not mean you’ll lose your home. Here’s how it works:
- Equity Release Requirement: Toward the end of your IVA, your insolvency practitioner (IP) may request you to remortgage your home to release equity for creditors. If remortgaging isn’t possible, you may need to extend your IVA payments by up to 12 months.
- Protection of Essential Assets: An IVA ensures that creditors cannot force you to sell your home as long as you meet the repayment terms. This protection can help you maintain financial stability while working to resolve your debts.
If you’re worried about losing your home, discuss your situation with your IP. They can negotiate terms to safeguard your property.
What About Your Car?
Your car is another significant asset that can cause concern. The treatment of your vehicle in an IVA depends on its value and necessity:
- Essential Use: If your car is essential for work, daily errands, or family responsibilities, you can typically keep it as part of your monthly allowance.
- High-Value Cars: If you own a luxury or high-value car, you may be required to trade it for a more affordable alternative. This ensures creditors receive a fair contribution while allowing you to maintain your essential transportation needs.
Maintaining Financial Stability During an IVA
An IVA is designed to help you regain control over your finances. To achieve this, your monthly repayment amount is carefully calculated based on your income, living expenses, and a reasonable allowance for necessities.
Here’s how an IVA promotes financial stability:
- Budget-Friendly Repayments: Your monthly payments are tailored to your affordability, ensuring you can meet your basic needs while resolving debts.
- Legal Protection: Creditors are legally bound by the IVA terms and cannot take action against your assets.
- Debt Resolution: By the end of your IVA, any remaining eligible debt is written off, giving you a fresh start.
Avoiding the Risks of Bankruptcy
Unlike bankruptcy, an IVA allows you to keep greater control over your assets. Bankruptcy often requires selling significant assets like your home or car, which can be disruptive for you and your family. An IVA offers a more measured approach to debt management, making it a preferred option for many UK citizens.
How We Can Help
At Apply for IVA, we specialise in helping individuals navigate the IVA process while protecting essential assets. Our experienced team works closely with you to:
- Assess your eligibility for an IVA.
- Provide tailored advice on keeping your house and car.
- Ensure you meet repayment terms without undue financial stress.
We’re here to help you resolve financial stress and regain control of your life.
Take the First Step to Financial Freedom
If you’re ready to explore how an IVA can work for you, contact us today. Let us guide you toward a solution that protects your assets and helps you achieve long-term financial stability.
Visit Apply for IVA to learn more about how we can assist you.
