Can I take a loan during an IVA?

While under an IVA, a person may be tempted to take a loan maybe a Payday Loan to cover some unplanned expenses. But under an IVA, loans are usually not approved.

Creditors avoid giving fresh loan to a person who is under IVA in order to protect their interests, being suspicious of the debtor’s ability to pay off a fresh loan amount. Moreover, this provision is not allowed under IVA.

Creditors raise their concern that the full amount of the original debt is actually not paid off even after the arrangements of the IVA and the person is seeking another loan. On the other hand, taking any further loan on the part of the debtor will mean that instead of coming out of his financial mess, he is actually going to make it more complicated.

Moreover, the calculation of the monthly payments is made based on the current financial status of the debtor so as to enable him to have a basic standard of living. So taking any more loans can be considered unnecessary.

However there may be two reasons for a person wanting to take a loan while under the IVA. The first one is that his cost of living might have arisen, forcing him to take extra funds.
The second reason might be that the debtor has not taken any efforts to cut down his cost of living and the debtor is unable to afford the monthly payments for that reason.

For more information on loans with IVA, the debtor can consult his Insolvency Practitioner.


Loans during an IVA are usually not allowed. Taking a loan without your IP consent can termite you IVA application. Consult your Insolvency Practitioner is a must before taking any extra debt.

Post a comment