Individual Voluntary Arrangement vs bankruptcy

wannaBfree_3

Hi,

i have posted a couple of posts stating that i am probably going to have to go BK, however i have been told about Individual Voluntary Arrangement. what is the differnce between them?

mel

shadowdragon

IVA tide into a payment plan that has you living on a meager amount of your income, credit is borked from the start of the IVA to six years after your IVA is finished, they can also force sale of your house to free up assets in the 4/5 year

BC, all debts are effectivley wiped, you live on a sensible amount (a lot more than on an IVA), all assets are seized at the beginning, credit borked for six years.

please feel free to correct me if im wrong, but thats the impression I get from reading on here, also IVA companies can be vultures (as they make money off of your payments)

fermi

Martin has written a guide on IVAs which is worth looking at.

Link: Guide to IVAs - Are they worth it?

Credit references are ruined for 6 years from the date of the IVA agreement being made, in much the same way as bankruptcy.

IVAs can be useful if you have property to protect. They will not normally force a sale to free equity, but it can be part of the IVA agreement that you have to mortgage to free it towards the end.

Unless you do have property to protect or there is a reason why you can't go BR, then they are not normally the way to go.

CCCS only recommends them to about 3% of the people that contact them with debt problems.

wannaBfree_3

fermi wrote: »

Martin has written a guide on IVAs which is worth looking at.

Link: Guide to IVAs - Are they worth it?

Credit references are ruined for 6 years from the date of the IVA agreement being made, in much the same way as bankruptcy.

IVAs can be useful if you have property to protect. They will not normally force a sale to free equity, but it can be part of the IVA agreement that you have to mortgage to free it towards the end.

Unless you do have property to protect or there is a reason why you can't go BR, then they are not normally the way to go.

CCCS only recommends them to about 3% of the people that contact them with debt problems.

hi, i have a mortgage but i owe basically what the house is worth. i just wanted to make sure that going Bk was the right way to go.

thx

tigerfeet2006

If you have taken advice from one of the debt agencies and they have not mentioned an IVA then it is highly unlikely that it is suitable for you. They will only suggest it if it is.

fudge59

tigerfeet2006 wrote: »

If you have taken advice from one of the debt agencies and they have not mentioned an IVA then it is highly unlikely that it is suitable for you. They will only suggest it if it is.

My friend who I've posted about their financial problems, saw the CAB today who then put them through to the 'in-house' debt company (as such, same one as I was/am with when I went through my BRy), and it sounds like they're recommending an IVA to him - he's £19,000 in debt - think it's a loan, couple of credit cards and another debt - he told me they'd said he'd pay X per month to them and they'd then pay the creditors. I'm assuming they're not recommending BR (even though he doesnt have a car or home of his own) due to the amount of debt?

Deep_In_Debt

fudge59 wrote: »

My friend who I've posted about their financial problems, saw the CAB today who then put them through to the 'in-house' debt company (as such, same one as I was/am with when I went through my BRy), and it sounds like they're recommending an IVA to him - he's £19,000 in debt - think it's a loan, couple of credit cards and another debt - he told me they'd said he'd pay X per month to them and they'd then pay the creditors. I'm assuming they're not recommending BR (even though he doesnt have a car or home of his own) due to the amount of debt?

It could be that they are recommending a DMP rather than an IVA if your friend doesn't own a house.

Desperadiso

We didn't do one because we were worried about committing to legally binding monthly payments for 5 years when our income is likely to be very unsettled over the coming years- I'm having another baby and will be losing a chunk of my salary whilst on mat leave and then (hopefully) only going back to work part time for a while etc. When we go BR I think we will still have to make monthly payments to theOR as there will be an excess of our income fro a while to begin with, but every time you have a change in circumstances the OR reviews it when you're bankrupt, whereas with an IVA you are stuck with the same repayment for 5 years no matter what. I think people chose them to prevent losing their home.

x

fermi

Richard_S wrote: »

I think that's a very accurate assesment of IVA's fermi, but that link jumps around all over and the guide to IVA's on several other sites is easier on the eyes.

In fact, I think this one must have copied Martin's guide::rolleyes: :rolleyes:

May be easier on the eyes, but I can't see much similarity between the two.

Martin's goes out of the way to emphasise that an IVA is only a good option for tiny subset of people and that for most other solutions would be better. Plus it recommends taking advice from an independent source such as CCCS, NDL or CAB.

The one you linked to does no such thing, and in the last section actively seeks to promote IVAs over other solutions. Hence the paragraphs entitled "Why Avoid Other Debt Solutions?".

tigerfeet2006

fudge59 wrote: »

My friend who I've posted about their financial problems, saw the CAB today who then put them through to the 'in-house' debt company (as such, same one as I was/am with when I went through my BRy), and it sounds like they're recommending an IVA to him - he's £19,000 in debt - think it's a loan, couple of credit cards and another debt - he told me they'd said he'd pay X per month to them and they'd then pay the creditors. I'm assuming they're not recommending BR (even though he doesnt have a car or home of his own) due to the amount of debt?

That is probably a DMP which is not legally binding. Still mucks up your credit report though.

If your friend is at all worried though then it might be worth them having a chat with National Debtline or CCCS just to get a second opinion. Always worth getting as much advice as you can where money is concerned.

debt_doctor

For the vast majority of those with a serious debt problem I look at IVA's as a last resort. BR is a far cheaper, shorter and less stressful option than an IVA.

Unless someone cannot go BR because of occupation or cannot raise a lump sum from a third party to buy the BI in their home in BR, I would not touch an IVA with a barge pole !

DD