IVA Myths: “IVAs are not suitable for homeowners”

IVAs are a debt solution that many people turn to when they need help with their finances. Despite the popularity of IVAs, there are still a lot of incorrect statements made about them. Here we are going to discuss the common statement; “You can’t own a home and be on an IVA” and shed some light on why this is a myth and not a fact.

An image of a woman sat in a house.

What is an IVA?

To fully explore the myth that you cannot own a home whilst on an IVA, we must first understand what an IVA is.

An IVA stands for an Individual Voluntary Arrangement, which is a specific form of insolvency that allows people in debt to consolidate their repayments into one that is affordable to them. IVAs offer people in debt protection from creditors, asset loss, and unfair repayment plans. Additionally, interest and charges are frozen on debts included in an IVA, to ensure that the financial position of the person in debt does not get worse. The goal of an IVA is to support and guide someone who is struggling with their debts towards a better financial future.

If you are interested in an IVA, our team of friendly experts may be able to support you in taking the next step towards financial freedom.

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Can I own a home on an IVA?

We understand that it is important for homeowners to find a debt solution that protects their property. A significant benefit of an IVA is that you can usually continue to own your home.

A house and magnifying glass on a stack of coins.

Once you have declared that you own your home to the company assisting you with an IVA, they will find out how much equity you have in your property. To do this accurately and efficiently the company will request a current valuation of your home and a copy of your mortgage statement, along withevidence of any other secured debts connected to your property (e.g. charging orders).

Your monthly IVA payment will be calculated, considering any secured payments you need to make towards your home. This will ensure that you can continue to own your own home whilst repaying your creditors at a rate that suits your personal situation.

A house and a padlock with the word IVA

Additionally, IVAs protect your home from creditors who are included in the arrangement from taking any further action against your property. As IVAs are legally binding contracts it means that if you abide by it’s terms creditors cannot commence or continue any action against your property such as re-possession.

Here at Debt Support Centre, we assist with affordable IVAs that are designed specifically for each of our customers. We have a friendly team of experts who are here to answer any questions you may have. We are here to support you.

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“Am I required to release equity in my home whilst on an IVA?”

A calendar with the number 6 highlighted.

As previously mentioned, IVAs protect your home as long as the mortgage and the IVA payments are being made. You may be required to seek to release some of the equity in your property, however this is dependent upon your individual circumstances, the amount of equity you have in your property and other criteria, which would be discussed with you before you proceed with an IVA. If you are unable to release equity then your IVA may run for 6 years.

Please rest assured; our team at Debt Support Centre are here to help. Should you have any questions relating to your property they would be more than happy to discuss these with you.

Concluding Points

  • An IVA is a specific form of insolvency, which allows individuals who need a financial helping hand to continue living in their homes.
  • IVAs protect your home from your creditors included in the arrangement and allow you to put money aside for your priority payments.
  • Once the IVA is agreed your house is safe as long as the mortgage and IVA payments are maintained.
  • An IVA may require you to release some equity that you have in your home.