There are rules on what further credits you cannot obtain while on an individual voluntary arrangement. These include loans and credit cards; otherwise, you must secure written consent from an IP of an insolvency practitioner. An insolvency practitioner will supervise the arrangement before you can obtain further credits.
This debt solution is for residents of England and Wales only.
What credits can you not take out while on an IVA?
While you’re on an IVA, you cannot obtain credits that amount to over £500 from any creditor or lender without any consent from your IP. These types of credits include:
- personal loans
- payday loans
- logbook loans
- credit cards
- obtaining money from friends or any members of the household
Though you get approval from your IP, you may perceive it challenging to obtain from various moneylenders since your credit record will display the IVA and defaults on your current obligations. If you get further credit greater than £500 without approval, you’ll be breaching the terms of your IVA.
You have to consider discreetly getting into an IVA because it will hit several aspects including your job, home, and your capacity to acquire credit.
Borrowing money from family and friends while on an IVA
the terms and conditions of your IVA do not allow you to obtain credit more than £500 without letting your IVA supervisor know, this includes borrowing money from your friends or family.
Besides, when you repay your family or your friends first, it implies that you prefer to pay them over your other creditors in your IVA.
When unfortunate events come up, say a reduction in your monthly budget, or emergency costs, you must contact your IVA provider and plan for some alternatives.
Can I choose a salary reduction on my IVA?
The same as lending money to your close friends or family members, salary deduction schemes are considered additional credit during your IVA.
Your IVA provider may agree though depending on the type of salary deduction. Besides, it will also depend on the amount, the reason for the deduction, and how it affects your IVA.
For instance, a season ticket loan may help you save money each month rather than paying for regular tickets. Thus, making your IVA provider approved for it. Basically, the IVA provider will check on the details of the scheme before allowing you to enter it. So, if you’re confused about whether the scheme can benefit you, you have to talk to your IVA provider and ask for advice.
Get Free IVA Help
There is an option for bankruptcy it is termed as an Individual Voluntary Arrangement or IVA, (similar arrangement is available in Scotland, it is called a Protected Trust Deed) This is a way of dodging the stigma, and financial, as well as other legal consequences of bankruptcy. If you are in the tailspin of giving up on your debts, you need to consider FREE DEBT HELP. Our debt experts can give you the best debt management plan to get rid of your debt in no time. Should you wish to speak via phone, call us on 0800 193 1024