Will I Lose Everything? Question by Question
Separating the common fear from how an IVA actually works.
Will I lose everything in an IVA?
No. An IVA is designed to protect your essentials, not strip them away. You keep your home, a reasonable car, your pension and your everyday belongings, and you carry on living a normal life while you pay back what you can afford. The idea that you 'lose everything' comes from myths and from confusion with bankruptcy, not from how an IVA actually works.
Will I lose my home?
No, not through an IVA. An IVA cannot force the sale of your home, which is one of its main advantages. You keep paying your mortgage as normal, and any equity is dealt with through the length of your IVA rather than by selling. For homeowners who want to stay put, this protection is often the whole reason for choosing an IVA.
Will I lose my car?
Usually not. A car of reasonable value that you need for work or family is normally protected. You might be asked to downgrade only if you own a genuinely high-value vehicle outright. For most people, an ordinary, necessary car stays with them throughout the IVA. It is essential possessions like this that an IVA is built to keep in your hands.
What about my belongings and pension?
Both are protected. Your household goods, furniture, appliances and personal belongings are not at risk in an IVA, and your pension savings are generally safe too. There is no trustee selling your possessions, as can happen in bankruptcy. An IVA works from your income, not your things, so day-to-day life looks much as it did before.
So what do I actually give up?
Your spare income, for a set time. The real trade-off in an IVA is committing your disposable income, what is left after reasonable living costs, to an affordable monthly payment for around five or six years. You also accept some restrictions, like not taking new credit. In return, a large part of your debt is written off and your essential assets are protected.
Where does this fear come from?
Mostly from myths and from bankruptcy. Debt solutions attract a lot of scary, inaccurate talk, and people often mix up an IVA with bankruptcy, where a trustee really can sell assets. An IVA is a different, more protective arrangement. Knowing the facts, rather than the rumours, is the first step to making a calm, informed decision about your debts.
Is an IVA gentler than bankruptcy on my assets?
Yes, considerably. That is much of its appeal. Where bankruptcy can involve losing assets, including potentially your home, an IVA is structured to protect them and work from your income instead. For people who want to deal with their debts while keeping their home, car and belongings, an IVA is usually the far gentler option on what they own.
Should I get advice?
Yes, to replace worry with facts. If fear of losing everything is weighing on you, a free, impartial adviser can tell you exactly what an IVA would and would not affect in your case. They can also compare it honestly with other options. It costs nothing, and a clear, accurate picture is the best antidote to the myths. You may have less to fear than you think.
