Loan to get out of IVA?

[TerryH]

Hi all. I have been in an IVA for 2 years now. Im a tennant so have no equity but as my finances have improved over the last year or so id like to get out of my IVA so i can repair my credit rating quicker. especially as id like to get on the housing market within the next year.
Can anyone advise if it is feasible to get an unsecured loan, make an offer to pay the iva with this (obviusly making sure i can afford payments), thus in a years time i would be in a better position to get a mortgage?

Thanks,

Terry

[hillsy]

Hi Terry,

I am not an expert, but I would not think this would be advisable, as you would end up having to pay interest on a loan, therefore in the long run you would be paying more than you would in IVA. I do not think you could get a loan if you are in an IVA. I feel you may end up putting your self back to pre IVA days. Sorry to sound so negative, and I think we all have these kind of thoughts at some point, to find the quickest way out, but I would not personally do that. I also want to get back on the housing market, but while in IVA not possible, so going to spend next year putting every spare penny including hubby's 50% bonus money away to hopefully have enough to offer full and final.

[Wizzard]

Hi Terry

Your name will still be on the IVA register for the full 6 years even though you may finish early. And as Hillsy said, it would be a shame to take such a retrograde step.

[aguise]

Hi Terry and welcome to the forum.

No credit is allowed during an iva unless with the express permission of your IP. An unsecured loan would be breaking the iva agreement. is there a family member or friend who could in effect lend you the money to make a full and final offer. That could be a way to end the iva early.

Ang

[Viki.W]

Hey Terry,welcome to the forum. Don't forget, your credit rating will be rubbish for 6 years from the date of your creditors meeting, even if you finish your IVA earlier.[:(] X

[TerryH]

Thanks all. i didnt realise my credit rating would be bad for 6 yrs regardless. i thought that it would be a year from when it was finished / settled.

Thanks for the extra info. i guess i will just have to try and save as much as possible. but then in reality in supposed to give the creditors that also!

[johnt]

The purpose of the IVA is to enable you to become debt free as an alternative to becoming bankrupt.

To be honest it sounds as if you haven’t been given very good guidance by your IP.

An IVA is not by it's design meant to be an easy fix, and important life long lessons regarding debt must be learned from it.

Sorry to sound like I'm preaching, it's not personal, I'm just shocked that you feel this is such a simple thing to be rid of, otherwise you're likely to fall into the same trap again.

[MelanieGiles]

Unless you take a loan from a family member - which would be permissible if it enabled you to offer an early settlement to creditors - then I think that you will find it very difficult to get a commercial loan company to look at you whilst in an IVA - and you would also need your Supervisor's permission to take out any further borrowing.

If you were able to effect an early settlement, then your name would be removed immediately from the Insolvency Register, but would still be reflected by the credit scoring agencies.

[TerryH]

I know there isnt really an easy fix. I was only considering this as my finacial circumstances have greatly improved since i entered into my IVA.
So now i have to weigh up the pro's and cons of paying more into my IVA monthly as opposed to trying to settle it.

[kallis3]

Terry, just to correct something Wizzard said - your name is only on the Insolvency Register until your IVA is completed. It's your credit rating that is shot for 6 years.