Debts included in an IVA
Not all debts a treated equally with an IVA. There are some you will be able to include, some you can’t, and some you will be able to depending on your circumstances.
It’s an important consideration as you might be struggling to repay a large debt that you can’t include. Take a look at our infographic below with some further advice below.
Secured & Unsecured Debts
Before you know what debts you can and can't include, you need to understand the difference between secured and unsecured debts.
Unsecured debts - these are debts that are not attached to an asset such as your home or car. For this reason, the interest rates tend to be higher. This is because the lender cannot quickly recoup their money should the borrower find themselves in a position where they cannot repay.
Typical examples of an unsecured debt are credit cards, overdrafts, and personal loans.
Secured debts - these are debts that are linked to an asset such as a car or property. If you aren't able to repay your debts your lenders can force you to sell the asset tied to the debt so they can get their money back.
Typical examples of a secured debt are mortgages and secured loans.