Individual Voluntary Arrangements (IVA)
This 60 seconds free survey is helping thousands of people get out of debt. It’s free to check if you qualify now…
Ask your advisor for a personalised IVA example to see how much unsecured debt you could write off and calculate how much you could save per month!
We’ll ensure you only pay back what you can honestly afford, starting from £90/month
Never have to deal with scary phone calls or threatening letters from creditors demanding payment
No worrying about bills, payday loans, credit cards or debt collectors
“Without doubt the most professional Practitioners bar none. All conversations by email & telephone with both Marian & Zainab where extremely friendly & knowledgeable and not only put me at ease but gave me a better understanding of an IVA”
“Really quick to get IVA in place, Polite and interested in my problems and non-judgemental. Anyone who deals with this company will be able to stop worrying about creditors and will possibly be relieved of a lot of undue stress”
“When I first looked at this company the first person to call me (Steve) was very friendly and extremely helpful with understanding my situation. I didn’t realise I was in so much debt but now I am looking forward to a better financial future”
Unless your debt is severe and a few things have happened to you first, you probably won’t lose your home because of it.
That’s not to say you cannot lose your home because of unsecured debt, but it won’t happen out of the blue overnight.
The threat is quite real, though, and it’s important to be proactive about your debt to avoid the worst outcomes, such as having your home repossessed.
There are various measures you can take to address your debt and there are even ways to write off debt and protect your most important assets at the same time.
In this article, we explore what would need to happen for you to lose your home due to unsecured debt and how to write off your debt without losing your home.
If you have a loan or another type of credit that is secured against your home, then failure to keep up with the terms of your agreement could result in the lender repossessing and liquidating your property to pay the debt.
Unsecured debt, such as that accumulated through credit cards and small, personal loans, can also result in you having your home repossessed, but this is more complicated.
In any situation where a person’s home is being repossessed, creditors have to maneuver various regulations and procedures before they can take your property.
The most common way creditors threaten people’s homes is through Charging Orders, as these apply to the most common type of debt: unsecured debt.
Charging Orders are issued to people who have either fallen into arrears or have outstanding unsecured debts in their name.
It’s important to note that Charging Orders are only sent to people who already have a County Court Judgement (CCJ) against them, and CCJs always follow after a long history of correspondence.
A key point to note, however, is that creditors can apply for a CCJ at the same time as applying for a Charging Order, if they are being particularly aggressive.
They can also apply for a Charging Order whilst you have a CCJ repayment plan in place and are keeping up with payments.
But again, this always follows after a long back and forth between the lender and the borrower, and doesn’t come out of nowhere.
A Charging Order is very serious and not addressing it properly could lead to you losing your home.
This order precedes another, even more serious order, known as an Order to Sell.
The Charging Order secures your outstanding debt against your home and the Order to Sell forces you to liquidate your home and repay your debts.
HMRC also has the power to issue these orders, and they are now using them to come down more heavily on people and businesses with outstanding tax bills.
You can protest the order, and you can also request that conditions be attached to your final charging order, as this makes it more difficult for creditors to force a sale.
Secured debt is debt that is backed by collateral, such as a home or another expensive asset.
This type of debt can directly threaten your property because if you use it as collateral and fail to keep up with payments, you can be made to sell your home.
This possibility is made explicit in the terms of such agreements, and lenders understand that they face losing their property if they default on payments.
If you secure multiple loans against your property and fail to make payments, your house can be sold and the money spread amongst your creditors.
Creditors who you made agreements with earliest will be paid first, and the latest will be paid last.
It’s best to get in front of debt before it gets out of hand and your most important assets, like your home, become threatened.
Luckily, there are various steps you can take to address your debts that don’t involve liquidating your property.
Here are a few of them:
To the surprise of many, it is actually possible to simply write to your creditors and request that they relieve you of your debts.
If there are exceptional circumstances, or if you can explain how you did not properly understand what you were getting into, your creditors have the power to wipe your debts.
It’s also possible that your lender is pursuing you after the collection time-limit of six years.
If this is the case, you can inform your creditors that the collection window has passed and that they have no right to attempt to recover money from you.
Either way, whether your creditors agree to relieve you from your debts or if the six-year limit has passed, your home will be protected.
IVAs are an excellent debt management solution for those who qualify.
They involve repaying a percentage of your debt over a five or six year period, then at the end of the agreement the remaining potion is wiped.
This is a much better option than bankruptcy, for example, and protects your assets, including your home.
While IVAs take a toll on your credit score, it will impact it much less than bankruptcy and some other solutions.
Another major benefit of having an IVA is that the moment your IVA starts, interest on your debts is frozen.
Your creditors also can’t pursue you for the duration of the agreement and all of your debt is consolidated in a single place.
Speak to an IVA adviser today to find out who qualifies for an IVA and hopefully start your application.