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  • FIRST POST
    • mikeyt61
    • By mikeyt61 11th Mar 17, 9:53 AM
    • 2Posts
    • 0Thanks
    mikeyt61
    Converting IVA to unsecured loan
    • #1
    • 11th Mar 17, 9:53 AM
    Converting IVA to unsecured loan 11th Mar 17 at 9:53 AM
    I haven't posted on this forum before but I was wondering what people's views are on converting an IVA into a loan.
    I have recently completed the third year of my IVA out of a six year term. The terms and conditions of my IVA are pretty straightforward and I know exactly what my commitment is each month and the exact end date of the arrangement.
    Last month, the IVA provider gave me the option of converting the IVA into a loan and as a sweetener, the amount outstanding on the IVA would be reduced by £500.
    The pros, as far as I can tell, are as follows:
    - My name would be removed from the insolvency register with immediate effect
    - If I had a windfall, I could repay the amount outstanding on the loan without any penalty

    The cons are as follows:
    - the repayment term would be increased by 12 months to a 48 month arrangement
    - the amount that I would repay each month would increase by 20%
    - the APR on the loan would be 39.9%
    - the total amount of the loan if it was carried through for 48 months would be £2100 more than
    I currently owe under the terms of the IVA

    I would appreciate any advice or shared similar circumstances from other users. For me, the temptation to accept is that I would probably be able to access funds pretty quickly after the loan had been agreed and pay it off in full.

    I was also trying to seek clarification as to how my creditors would agree to this arrangement.

    Apologies if my question seems naive, but I'm no financial expert!

    Thanks for any feedback.

    Michael
Page 1
    • sourcrates
    • By sourcrates 11th Mar 17, 11:55 AM
    • 10,899 Posts
    • 10,562 Thanks
    sourcrates
    • #2
    • 11th Mar 17, 11:55 AM
    • #2
    • 11th Mar 17, 11:55 AM
    I did not even know this was possible.

    Check any information page on IVA`s, no were have i seen an option for turning it into a loan.

    Has this come from your IP ?
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • connor08
    • By connor08 11th Mar 17, 12:04 PM
    • 63 Posts
    • 2 Thanks
    connor08
    • #3
    • 11th Mar 17, 12:04 PM
    • #3
    • 11th Mar 17, 12:04 PM
    I haven't posted on this forum before but I was wondering what people's views are on converting an IVA into a loan.
    I have recently completed the third year of my IVA out of a six year term. The terms and conditions of my IVA are pretty straightforward and I know exactly what my commitment is each month and the exact end date of the arrangement.
    Last month, the IVA provider gave me the option of converting the IVA into a loan and as a sweetener, the amount outstanding on the IVA would be reduced by £500.
    The pros, as far as I can tell, are as follows:
    - My name would be removed from the insolvency register with immediate effect
    - If I had a windfall, I could repay the amount outstanding on the loan without any penalty

    The cons are as follows:
    - the repayment term would be increased by 12 months to a 48 month arrangement
    - the amount that I would repay each month would increase by 20%
    - the APR on the loan would be 39.9%
    - the total amount of the loan if it was carried through for 48 months would be £2100 more than
    I currently owe under the terms of the IVA

    I would appreciate any advice or shared similar circumstances from other users. For me, the temptation to accept is that I would probably be able to access funds pretty quickly after the loan had been agreed and pay it off in full.

    I was also trying to seek clarification as to how my creditors would agree to this arrangement.

    Apologies if my question seems naive, but I'm no financial expert!

    Thanks for any feedback.

    Michael
    Originally posted by mikeyt61
    hi micheal I haven't heard that you could convert an iva into a loan ive always been afraid of iva because my idea of an iva was while you had this iva in place you couldn't take any more debt out against your name until the iva had finished however Ive never had an iva so I wouldn't know but look it up and ask citizens advice first they have a money line or you can phone the oney advice line or even national debt line just becarefull I hope an expert on here will answer your question if you put in google advice and the country you live England or wales etc it will bring up the citizens advice web site and you can enter you question in there and I think there is a live chat option on there I hope I have helped
    • mikeyt61
    • By mikeyt61 11th Mar 17, 12:06 PM
    • 2 Posts
    • 0 Thanks
    mikeyt61
    • #4
    • 11th Mar 17, 12:06 PM
    • #4
    • 11th Mar 17, 12:06 PM
    Thanks for replying.

    Yes I was contacted by IP and advised that because I had an exemplary record repaying the IVA for 3 years, I had been 'selected' for invitation to convert IVA in to a loan. Like you, I didn't know that this existed as an option.
    • sourcrates
    • By sourcrates 11th Mar 17, 12:24 PM
    • 10,899 Posts
    • 10,562 Thanks
    sourcrates
    • #5
    • 11th Mar 17, 12:24 PM
    • #5
    • 11th Mar 17, 12:24 PM
    Thanks for replying.

    Yes I was contacted by IP and advised that because I had an exemplary record repaying the IVA for 3 years, I had been 'selected' for invitation to convert IVA in to a loan. Like you, I didn't know that this existed as an option.
    Originally posted by mikeyt61
    I would say be very careful.

    Give National Debtline a ring, run it past them.

    I just dont see how an insolvency arrangement can be turned into a loan ???
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • fatbelly
    • By fatbelly 11th Mar 17, 1:29 PM
    • 10,821 Posts
    • 8,085 Thanks
    fatbelly
    • #6
    • 11th Mar 17, 1:29 PM
    • #6
    • 11th Mar 17, 1:29 PM
    Yes this is the latest twist from the IVA pushers.

    Debt Camel has it covered here

    https://debtcamel.co.uk/perinta-loans-end-iva-early/
    https://debtcamel.co.uk/aperture-iva-exit-loan-sprout/
    • sourcrates
    • By sourcrates 11th Mar 17, 3:45 PM
    • 10,899 Posts
    • 10,562 Thanks
    sourcrates
    • #7
    • 11th Mar 17, 3:45 PM
    • #7
    • 11th Mar 17, 3:45 PM
    Yes this is the latest twist from the IVA pushers.

    Debt Camel has it covered here

    https://debtcamel.co.uk/perinta-loans-end-iva-early/
    https://debtcamel.co.uk/aperture-iva-exit-loan-sprout/
    Originally posted by fatbelly
    Thanks Fatbelly, it seems debt camel are not that impressed by this new venture then.
    Can't say I see much benefit in it either to be honest.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • fatbelly
    • By fatbelly 11th Mar 17, 5:50 PM
    • 10,821 Posts
    • 8,085 Thanks
    fatbelly
    • #8
    • 11th Mar 17, 5:50 PM
    • #8
    • 11th Mar 17, 5:50 PM
    I think it can be useful in certain circumstances. But the benefits are going to be oversold because there is (more) money in it for the sellers.

    The comments underneath the article question the legality of this.
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