IVA : Debts, Secured Or Unsecured? That Is The Question.

Another good question we are asked frequently at myIVA-Adviser.com is:

"Which Debts can go into an Individual Voluntary Arrangement (IVA) ?"

An Individual Voluntary Arrangement (IVA) will only deal with unsecured debts.

But do you know how to recognize a secured debt, which cannot go into an Individual Voluntary Arrangement (IVA), from an unsecured debt, which can?

Well, there are two types of personal debts :

Secured and Unsecured.

The most common types of debt that falls into the 'Secured' debts category are:

• Mortgages, which are usually secured against a house or property.


• Hire Purchase Agreements, or H.P. Agreements which are secured against the asset purchased with the loan, for instance a vehicle, caravan or motorbike.


• Loans against Property, for instance, extra loans in addition to a mortgage borrowed against equity in a house or property.

With all secured debts, the creditors have a guarantee in place which GIVES them the right to take possession of the asset in the event of a debtor failing to maintain repayments.

For example:
If a debtor failed to make their monthly repayments towards a H.P. Agreement used to buy a car, then the H.P. company would be able to repossess the car from the debtor, because the agreement has been broken. If you have an H.P. Agreement, Check the terms and conditions of the agreement to establish what actions a creditor will take and when.

These are the most common type of 'Unsecured' debts:

Personal Bank Loans.
Personal Credit Cards.
Store Cards.
Catalogues.
Mobile Telephone Bills.
Unpaid Utility Bills.
Bank Overdrafts.
Credit For Electrical Goods.

Unsecured debts are NOT guaranteed against any Assets.

In the event of the nonpayment of an unsecured debt, the creditor DOES NOT have the right to repossess an asset.

For example:
If you have taken an unsecured bank loan to buy a car, and then fail to make repayments, the bank cannot repossess the car, even though your loan agreement has been broken.

However, the creditor does have the right to take legal action against a debtor, which could end up with the creditor petitioning for the debtors Bankruptcy.

An Individual Voluntary Arrangement (IVA) gives the debtor protection at this piont, because when an Individual Voluntary Arrangement (IVA) has been accepted, ALL the creditors give up their right to take court action.

Take this link to find out if you qualify for an Individual Voluntary Arrangement (IVA) by asking The debt Detective

You are welcome to call myIVA-Adviser.com on 0800 088 7503 anytime should you need to discuss your debts, secured or unsecured.

You will be given free, clear, concise and ethical advice about your debts. The conversation will remain confidential, and our Individual Voluntary Arrangement (IVA)specialist team will be at your side to guide you.

Or for a full explanation of the IVA process, go here.

• FAQs - General
• FAQs - IVA Technical
• Individual Voluntary Arrangements