Points to consider
We want to be clear and fair about our loan, so we outline the main advantages and disadvantages to enable you to ensure you are well informed before making a decision.
Advantages
- Can keep extra income (from overtime, promotion, bonus or inheritance) obtained after IVA closure
- May apply for a job which requires you to be solvent
- Don’t need to re-mortgage in Year 4 for IVA equity clause
- May put property up for sale
- Replace multiple creditors with one – Sprout
- An active (rather than dormant) credit file at Year 6
- May obtain Certificate of Closure early
- If the IVA fails, the total amount of debt originally liable to the IVA (after fees and contributions have been calculated) is still owed. With a Sprout Loan, only the loan amount (after payments and interest have been calculated) is outstanding
Disadvantages
- PPI claims payable to creditors, even after IVA is closed
- Re-entering financial services market where difficulties were experienced may be intimidating
- Potential for building up debt with other lenders
- Some customers may miss the structure and discipline of the IVA
- Statutory default timescales mean less flexibility if repayments are not met
- Default will damage your credit record and late repayment can cause you serious money problems
If you need further advice about your circumstances, we suggest you speak to your Insolvency Practitioner, or obtain free impartial advice from StepChange and / or Citizen’s Advice to help you decide if you would like to take action.