IVA support and discussion thread

Hi Scared Sick

Regarding your outlook for credit / mortgages, i am not sure how much difference there is between DMP or IVA as both seriously affect your credit rating. I have several defaults and AP markers and potentially my only way forward is my current changed address - but that is a very long and complex story (I have also remarried and changed my name). I will pay all my debts off within the next couple of years and do not want credit but would like a joint account with my husband and my name on the mortgage!!!!

The only reason a DMP was of any preference to me was that are of profession can be termed as 'financial services' and there was talk of IVAs becoming classed in the same bracket as bankruptcy thus my decision to stick with DMP.

Rightly or wrongly that was my personal choice.

Regards
ST

Scared Sick,

As stressful as it all is at the moment, it is very important that you take your time before making a decision which is very difficult to reverse. It took me 6-Months of research before I took the IVA plunge.

Better to do that than 'go for it' in a moment of panic, and then be one of the 35% who's IVA fails.

Nearly as sad however, are the forum posts which read 'I've been in a DMP for 5 Years, and now I am thinking of an IVA'. ...Hindsight is great, but it could have all been over by now.

However, you could do worse than opt for a DMP for now, as that at least gives you some breathing space, and an affordable repayment solution, in which you can further consider your other options.

But, those 3 'pro's' for an IVA that you mention are VERY significant.

Some here would say that the 'pro's' of a DMP include the informality & flexibility of the arrangement. Yes, that's great, but it works both ways: The informal nature of DMP's means that creditors can change their terms at will (ie: decide to no longer freeze interest, take further legal action etc). Realistically, it is highly unlikely that your creditors will agree to freeze interest over a 20+ Year term. Still, as it is an informal arrangement, you can alter payment terms to suit.

The downside (but also arguably an advantage) of IVA's is that they ARE legally binding on all parties. So yes, they lack the same flexibility as a DMP, but the huge advantage is that you are also protected from interest rate rises court action etc. as well. it is also concluded after 6 Years.

Advantage 4 of the IVA: Also bear in mind that your credit file recovers 6 Years after the START of an IVA, but not until 6-Years AFTER you final DMP repayment.

Fancy a knackered credit rating for the next 32 Years? Think about that: No chance of EVER remortgaging, getting any sort of car finance, no mobile phone contract, and being stuck with a 'dark ages' basic bank account. Not for me thanks - 6-years I can tolerate however.

scared-sick wrote: »

And then i flip back to thinking an iva is the best way forward again!!

My biggest fear staying on the dmp is in a few years time realising that i should have gone down the iva route.

My biggest fear with an iva is in 5 years time being worse off because of the equity release clause and also i keep reading 'horror' stories about peoples' iva payments being put up when they have had no income increase and the cost of living things have gone up.
If the latter happens then i dont have a say in it do i? I just get told what to pay and the choice is pay it or fail the iva!

Hopefully a telephone meeting with my provider on monday might make things clearer!!

Your IVA is a legally binding document, so make sure you read it with a fine tooth comb. Anything can be scary if you read into it to much. There are pros and cons with any approach.

Remember, that if you majorly defaulty on an IVA, then it reverts back to owing the debt and you can go down the bankruptcy route if needed. Either way, it finishes after 6 years and anything owed is written off. The IP take their fees from the pot of payments paid in.

Hi,

Just thought i would let all you helpful people know that after MUCH consideration and weighing up all my options and considering as many (probably far too many) scenarios as i can, i finally decided to go for the IVA.

I have asked a million questions on here, (thank you for all your very helpful replies, you are worth your weight in gold)!
I have made phone calls to the top to get answers and i just had another telephone appointment and asked another 100 questions!

I can only hope now that everything goes through smoothly.
Keep your fingers crossed for me please x

Well done - in the end you have to make a decision if delaying won't change anything or bring any more useful information. I hope your creditors approve your proposal and that it is plain sailing for the next 5/6 years.