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Utilising assets

Debt repayments often attract a very high interest rate or charge. We may find ourselves paying minimum repayments on credit or store cards or catalogues but finding that the majority of our payment has been added back on to the debt by way of interest charges. It may be that any asset we have could be utilised to find a better way forward.

Our house

If we have equity in a property this is a valuable asset. It may well be worth seeing if our mortgage provider or another lender would be willing to lend us money so we can clear some or all of our unsecured debts. Obviously this is not something we would do lightly - extending our mortgage or taking out a secured loan will take away from the asset that we have. However if the interest rate on the mortgage or secured loan is significantly lower than the rates we are paying on our unsecured debts, then it may well be worth considering.


It may be surprising to know that some are willing to continue to pay high interest charges on debts when they are protecting a savings plan that could be used to clear debts. The loss of interest on the savings could be minimal compared with the savings on interest charges if the debts were cleared.

Cars and other possessions

It may make financial sense to cash in on other assets we may have, downsize our car for example, in order to raise funds to deal with our debts. Not exactly pain-free but maybe a good use of our asset(s).

Full & Final IVA's

One possible solution for those in debt is to offer a lump sum settlement within an IVA. To qualify, a debtor would need to demonstrate that they have little or no available income to pay the contractual repayments on the debts or to offer a monthly payment within an IVA. If they have the offer of a release of equity from their mortgage company (presumably the monthly mortgage payment will increase and will need to be taken into account in determining available income), then this could be offered to creditors as a lump sum settlement. If however the equity in the property is much more than the unsecured debt total then an IVA won't work at all.

Settlement offers

Similarly, a more informal settlement offer could be made to unsecured creditors. In an IVA above, all creditors would have to be included and creditors representing 75% of the debt would need to agree for it to work. With an informal settlement it may be possible to contact individual creditors to negotiate a settlement of the whole debt by way of a lump sum offer. Thus debt accruing high interest rates could be settled.

Back to Solution and Information

The above is provided as information only. Iva.co.uk does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.

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Important Information

IVA.co.uk does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts. If you use the IVA Calculator or call the IVA Helpline, we will pass on your details or connect you to one of our partners who will contact you and explain all the options available to you. With your permission they can connect you with authorised debt solution providers who can process an application for you

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