IVA support and discussion thread

HI

Latest IVA outcome statistics from the I/S site published (I think) on December 11th 2013

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/IVAs/ivas.htm

Makes interesting reading whichever way you look at it really:)

DC

UpToMyNeckInIt wrote: »

Hi DC,

Thanks for the update - looks like a very similar picture to last Year's data though. I think it will be another few years before the effect of the IVA Protocol on (presumably lower?) termination rates will be seen.

I would still like to see this data listed by IVA firm. (Purely academic, 'cos it's never going to happen). Would be a useful piece of information for perspective IVA customers.

Hi

The termination figures are dreadful and I suspect that there are many IVAers struggling and behind with payments that these statistics do not show as the squeeze on disposable incomes continues to tighten.

I have started to see another spike in enquiries regarding IVAs during the run up to Xmas and that would suggest even more enquiries in the New Year but we will have to see.

Anyone contemplating going down the IVA route really need to make sure that they have looked in depth at all their options and if they then seriously consider an IVA they should be certain that they understand what they are taking on from the start to the end.

The issues surrounding properties & equity including the possible risk of being made bankrupt if the arrangement fails and now the inclusion of the secured loan clause in the IVA Protocol have to be fully understood.

Last year was another eventful one even for the world of IVAs what with the PPI & introduction of secured loans not to mention the squeeze on disposable incomes.

Next year looks interesting also for the IVA industry especially when you consider the Secured Loan issue.

Like I have said many times before I thought the idea of an IVA was to make affordable payments for a set time and then become debt free!

Turning unsecured debt into secured debt, really, maybe I have been reading all the wrong debt advice training books over the last 15 years or more.

Time will tell as always

Just my honest opinions as always.

PS - Happy New Year and it has been a pleasure reading your posts & debating with you & many others on here during 2013.

DC

...a number of very good points as always from DC.

Totally agree that perspective IVA customers need to carefully consider all options.

I take your point as well about equity release turning unsecured into secured debt. But anyone who is a homeowner, contemplating an IVA, has to consider this (as I did) Quite honestly, I do not believe forums posts where customers claim they were 'not aware' of, or 'didn't understand' the equity release clause. My IVA company are blinkin' useless, but even they made sure I thoroughly understood it, and the 'calculated risk' that I was taking.

The whole point of an IVA is to repay what you can reasonably afford. For those renting, it is done typically in 5 and occasionally 6 years, and generally of course the same applies for home-owners as well, given the real-world difficulty in obtaining a secured loan/remortgage. (I accept however that lending criteria could relax over the next 2-3 Years).

But yes, the secured loan thing is a game changer: For IVA companies to proclaim to homeowners 'You could be debt free is only 15 Years' does not have quite the same ring to it as '5', does it?

However, without wanting to sound too controversial here, my attitude towards equity release via the secured loan route, has relaxed somewhat. Compared to a sub-prime remortgage for the entire property debt, keeping your prime mortgage, and only having to take out a relatively small loan (even with the shocking fees and high-APR), will actually work out massively cheaper in the long-run for many (as I have illustrated previously). People also forget to mention that strict affordability criteria apply.

At the end of the day also, I have to try and see it from my creditor's perspective: As their customer, I chose to go into debt (due in part to irresponsible borrowing, and in part due to unforeseen personal circumstances). Therefore, if during my IVA, both my properties increase significantly in value to the point that come Month 48-54, I am sitting on a s**t-load of equity, I understand that it is fair that I attempt to release some of that. I am still going to be left with a minimum 15% equity. That is fair, some may argue.

Don't get me wrong, I am going to do my damnedest (within what I legally can do), to ensure that I do not go down the equity release route: The fact that both mortgages are in joint names instantly halves what I would otherwise have to release, and that we are borrowing 10X our current household income, pretty much guarantees that further borrowing is not going to happen anyway. (2 of the many things I considered when going for the IVA over a DMP).

However, I suppose now, for a homeowner with significant equity and with a mortgage of only say 3X their income, thinking of an IVA: They ought to consider, 1). Consolidating their debt with a secured loan from the start (providing they have 'learnt their lesson' on bad debt; or 2). Comparing IVA/equity release vs DMP more carefully.

Last post of 2013 for me.

Thoroughly enjoyed the debate here will all of you, and I've learned a few things as well.

Looking forward to more of the same in 2014.

HAPPY NEW YEAR TO ALL!!!