If you are a tenant and don't own a property, either in full or in part, then this is the type of IVA you will be applying for.
If you are a tenant but do own a property, even if it isn't the property you currently live in, then you will need to explore IVAs for homeowners.
Fortunately, setting up an IVA for a tenant is a relatively straightforward affair, because it doesn't suffer any of the complexities which surround IVAs where ownership of a property needs be considered.
Typically, people falling into this category of IVA will be:
As part of your IVA budget, priority will be given to your ongoing household expenditure, ensuring that you will always be able to prioritise your essential needs, such as your rent, food and utility bills, before consideration is given to payment of the debts included in the IVA.
IVAs for tenants will have a fixed term, which is generally set to 5 years and, unlike homeowner IVAs, there won't be any extension to the term relating to the equity clause.
It should also go without saying that this type of IVA holds all the standard terms and conditions found with all other IVAs, including legal protection from creditors and potential debt write-offs.
One of the benefits to this type of IVA is that you are not tied to a particular property for the duration of the agreement.
Tenants are free to move home at anytime, should they need or want to, without much disturbance being caused to the IVA itself.
This is in stark contrast to homeowners who will be pretty much tied to their property for the duration of their IVA, due to the implications of being obliged to introduce a proportion of any released equity into their IVA, should they decide to sell.
Obviously, tenants will still need to give due consideration to their IVA budget and consider the implication that moving home might create. Particular attention should be given to any changes in expenditure, to ensure any increases don't render the IVA unaffordable.
But, in general, so long as the IVA contribution remains affordable, most Insolvency Practitioners will be happy to sanction the move.
It pays, therefore, to do some planning before you tie yourself to a new financial commitment, such as a new rental agreement.
Take time to work out your new expenditure and double check you will still be able to maintain your IVA commitment before you sign your new tenancy agreement.
To find out more on the 'Non Equity IVA' option simply call our IVA helpline on 0800 856 8569 and talk to one of our team.