What's wrong with Payday Loans during an IVA

Financial advisors slam taking Payday Loans whilst you are on Individual Voluntary Arrangement (IVA) as this would put it at risk.

IVA Supervisors in their client’s annual review observed that those who take out a Payday Loan often faces unforeseen financial challenges.

Supervisors encourage their clients who may be facing financial hardships to talk to them.
After that they would conduct a full income and expenditure review. A temporary payment break can be offered if necessary or lower monthly payments can be affected temporarily or permanently so that you finish your IVA.
However, if your hardships are severe and IVA no longer practical alternative options including Bankruptcy can also be discussed.

If you are in an IVA you are not encouraged to take new credit, but you are permitted to obtain a total amount which does not exceed £500 without IVA Supervisor’s permission. That is, a very small amount won’t affect your IVA at all as it can be paid back quickly.

Nonetheless, if you are on IVA and obtains a new credit over £500, then you would have breached your IVA arrangement. The bigger amount will be difficult to pay back and you will be given only 28 days to repay your outstanding debt. If you fail to do so, the end result is that your IVA is considered to have failed.

Payday Loans are never a debt solution at all. If you are already in troubles and unable to maintain your debt repayment, by trying to borrow your way out of trouble rarely works. However, it can be useful unless you are expecting a significant increase in your income or drop in your living expenses. But in most cases your debt problem will generally get even worse.


Payday Loans are typically a bad idea during your IVA. If you are facing financial difficulties during your IVA, as first, contact your Supervisors (IP).

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