over 50k insecure debt - IVA?

susan76 · 5 July 2015 at 3:40PM

I have 54k worth of credit card debt and have been contacted by Financial Guardian who have taken my details to enter an IVA. It is early stage, and the more I look into it on various forums, the more unsure I am if this is the right way.
My monthly minimum payments are £800 (the same as my rent), with an income of £2770. It is becoming more of a struggle, as my annual income dropped by 15k during the last 12 months.
I have a car finance in place which is only 10 months old (48 months in total), and will need to re-finace it at the time. The advisor told me it shouldn't be a problem. I have 2 children also.
I am so unsure what the right thing to do is. I am suffocating in the monthly payments, but am very concerned about entering an IVA and what this will mean for the foreseeable future.

sourcrates · 5 July 2015 at 4:02PM

Hi,
You won't be able to re-finance anything whilst you are in an IVA, the "advisor" was incorrect.
Your name will appear on the insolvency register, and the IVA will show on your credit file, you would maybe get a payday loan, but that would be it, you would be declined for any other credit, plus, the terms of your IVA will state that you can't obtain credit over £500 whilst the arrangement is still active.
I would agree that an IVA is probebly the way to go, but I suggest you contact National Debtline or Stepchange to get some "proper" expert advice, as it appears you have been talking to a debt management company, who will only be interested in taking there large fee, and not how the arrangement will impact on you.

Most IP's charge a fee for administering an IVA, that's something you can't get away from, however the fees come out of your payments, they are not paid seperatly, it just seems you have been wrongly advised here with regard to the car finance.

sxcizme3010 · 5 July 2015 at 4:05PM

Firstly well done for facing upto things! Thats the first step. Secondly I currently have £23k debt with £800 monthly payments between them so seems like a low monthly amount for such a high amount of debt. I dont know what Id do in your situation - I just pay my creditors every month. If you really dont think you can afford to repay them then maybe an IVA is for the best however the future wont be easy especially if you apply for a mortgage etc.

If you can maybe cut back your living and try to manage that maybe an option but only you can decide. Maybe contact stepchange etc for some advice.

Hope you get sorted.x

KID77 · 5 July 2015 at 4:06PM

Hi Susan

We have 47k of debt and just started DMP, I did look at IVA but it is very rigid so thought they would make me pay more per month than my DMP and also use equity in my house at the end of the term. At least with the DMP, I am paying an amount which allows me to still live, not well off by any means but still enjoy a few things.
How much have they said you need to pay to your IVA each month?
With an IVA, this is a fixed term so in 5 years you are done where as my DMP could go on longer although I am hoping not as I will throw more money at it over the years but don't want to commit to this every month.
Sorry I can't give you any more advice as quite new to it all myself but hopefully someone will come along who has experience of an IVA and can help you make the decision on how you want to proceed.
K
xx

[Deleted User] · 5 July 2015 at 5:10PM

Depending on what assets you have, have you considered bankruptcy ? You say you are paying rent, so I assume you don't own property. With the situation you describe, bankruptcy might be a good option.

JES_F1 · 5 July 2015 at 5:30PM

susan76 wrote: »

I have 54k worth of credit card debt and have been contacted by Financial Guardian who have taken my details to enter an IVA.

I've not heard of Finanical Guardian but how did they contact you?

Have a look at this thread about getting impartial advice on debts. I can recommend Step Change - and their website includes a section where you can enter your income, outgoings and debts anonymously, and then suggests appropriate options.

owlet · 5 July 2015 at 6:18PM

Just to say that I agree with others who have said contact StepChange or National Debtline. They are free and impartial.
Do not pay any fees, there is no need & it will cost you more.

Well done for posting & seeking advice!

Grumpelstiltskin · 5 July 2015 at 6:29PM

JES_F1 wrote: »

I've not heard of Finanical Guardian but how did they contact you?

Have a look at this thread about getting impartial advice on debts. I can recommend Step Change - and their website includes a section where you can enter your income, outgoings and debts anonymously, and then suggests appropriate options.

Financial Guardian are the usual vultures, just look at what they charge for DMPs.

http://www.financialguardian.co.uk/fee-examples.php

Susan Do not touch these people with a bargepole.

fatbelly · 5 July 2015 at 6:49PM

As someone who does not own property, a bankruptcy (understanding that you will get an Income Payments Order over 36 months) may be better than an IVA with payments over 60 months.

But, as ever, the devil is in the detail and you should seek impartial advice as others have suggested.

JES_F1 · 5 July 2015 at 6:54PM

Grumpelstiltskin wrote: »

Financial Guardian are the usual vultures, just look at what they charge for DMPs.

I suspected as much. Those charges are obscene!

Susan - As Grumpelstiltskin says, don't touch Financial Guardian with a bargepole! Use one of the impartial organisations listed in that thread instead.

sourcrates · 5 July 2015 at 7:17PM

An IVA is a good moneymaker for the IP involved, whichever company you choose as your insolvency practitioner, you will be charged a fee, it's not like a DMP, where you can get one for free.
However, the 5/6 year commitment can be a painful affair, been there, done that, if you don't own a property, I would seriously follow Fatbellys suggestion of going Bankrupt, it will be over a lot sooner.

Knowing what I know now, that's what I would do, if I was in that situation again.

over 50k insecure debt - IVA?

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