What is an IVA?

IVA Alternatives

Keeping My Car

Transport to and from work and for seeing friends and family is important, as is the need to safely get the children to school. Most debt solution options will enable you to keep a vehicle for everyday use, but you may need to give up an expensive car and run something more modest.

A CONSOLIDATION LOAN enables you to roll all your outstanding credit card debts into a single loan with a preferential interest rate. Creditors do not need to be informed of what vehicles you own, so your car choice will be unaffected.

RE-MORTGAGING YOUR HOME is another option if you have enough equity in your home to cover the debts that you owe. Again, creditors need not be informed of what vehicles you own, though your home will be at risk if you are unable to meet repayments. We would recommend that you consult an Independent Financial Advisor before taking this step.

A DEBT MANAGEMENT PLAN enables to you repay all of your credit card debts, but over a longer time period and is likely to incur additional interest charges. Creditors often want to see a schedule of income and expenditure before agreeing to any plan, so extravagant expenditure on a luxury vehicle will not be accepted.

An INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA) is a binding agreement between you and you creditors in which you agree to make manageable payments every month, usually over a period of five years, after which you will be debt free. If you own your home, you will need to pay a percentage of the equity (calculated at today's values) into the arrangement. The Licensed Insolvency Practitioner dealing with your proposal must list all your income and expenditure so any vehicles you own will be declared. Those with a value of over £4,000 might need to be sold and replaced with a cheaper vehicle, with your creditors receiving the balance.

Filing for BANKRUPTCY means that, once appointed, the Trustee in Bankruptcy has the right to sell most of the bankrupt's assets. The bankrupt can seek to have certain assets, like a modest vehicle, excluded on the grounds that they need it to get to and from work.