People often receive conflicting messages regarding how an IVA will affect the equity on their property.

To understand this, it is important to view the matter from the eyes of creditors, who want to retrieve as much of your outstanding debt as possible. This means that they could look into any assets you may have.

If you declare bankruptcy, your assets including your home will be made available to your creditors. An IVA protects you from this, but your creditors will expect to see solid evidence that your debt will be repaid. This means that you should be prepared to release any equity on your mortgage. This can normally be carried out with a re-mortgage.

People who are currently paying off an IVA should expect to receive less equity than those with a clear credit history. However, they can expect to receive as much as 75%-80% of the equity accumulated on their home.

An IVA will require a person to release equity from their home after the fourth year of the arrangement. If the amount is enough to settle the debt, the IVA can be closed early. If the amount received is insignificant, or the debtor is unable to cope with the payments for a re-mortgage, the IVA will continue to run its course, which is normally five years.

At the end, a final assessment is made. In some cases, there will be no need for equity to close the debt.

Seek IVA advice for any further information on an IVA and equity release so as you are aware of all the facts before proceeding with one of the most popular debt solutions available.