My experience and tips before taking and IVA

lindsey73

My ex partner and I took out an IVA in February 2006 and it has been relatively pain free. The way to look at them is how much you haven't had to pay back instead of how much you do. We had £75000 of debt between us and although we have now split we are now responsible for our debt only. We started off with one company who wanted us to start paying £400 before they had even arranged it. Watch out for these companies they charge you for several months before even passing it to a IVA consultant who is normally a one man band. Go for the larger companies like Payplan who don't want any money till the IVA is approved by the creditors. They are also very helpful with their advice.

Before setting up an IVA you need to open a new bank account with a bank or building society that is not connected with any of your debt. Nationwide is good because they are independant. Arrange an overdraft for a rainy day as you will not be able to get any credit once the IVA has started. If you have a mortgage try to get a fixed rate for 5 years. I thought stupidly that it would not affect my mortgage but no high street mortgage companies will touch you while you are in an IVA. Our mortgage has gone from a fixed rate of 4.9% up to 7.7% varible rate when it finished in October. I have enquired about remortgaging and the best rate I can get is 9% as my credit rating is non existant. As long as you pay your mortgage each month your current mortgage company cannot finish your mortgage and the transfer from fixed to varible has just changed over you do not need to remortgage for this to happen and with the interest rates dropping it hasn't been too bad but if they went any higher it would have been difficult to pay.

As soon as you apply for an IVA the company you use should contact anyone you have debt with. This includes credit cards, loans, store cards, overdrafts, overpayment of wages with ex employers etc bascially anything that is not secured on your house. It is a great relief to get no letters from bailifs. If you do just forward it to your iva company.

You will be required to do a means test each year of what you earn and pay out. Be honest on this and remember to include things that crop up once or twice a year like car tax, mot's, repairs etc. All bonuses or extra income will be expected to be paid into the IVA so it is best to keep these out of your finances if possible.

In the 4th year they will ask you to get quotes on remortgaging your house to release equity. The reason credit companies accept IVA agreements is because they get more money back in the pound than if you go bankrupt and if you can release equity then they get more money back that way. If you can't release anything then they can make you pay for a sixth year as we probably will have to.

The good thing about the IVA is that your payments should stay the same unless you get extra income. The payments can go up but rarely go down. Make sure you budget properly you will not be able to get credit from anyone and you vialate your IVA agreement if you do.

Hope this helps anyone my experience has been generally good but things may have changed in taking out an IVA in the last 2 years. If you have any questions I would be happy to help but it would be from personal experience I am not an expert in any way.

[THREADBANNER]BOX[/THREADBANNER]

mother_hen_2

Lindsey73 thankyou very much for your input, it is helpful hearing from someone who is going through the process, especially as it appears to be a postive one. thankyou

lexie2005

Like Lindsey I so far am having a positive experience, just starting our 3rd year & due to increase in child care costs they have even just agreed to let us reduce our payments for £100 per month for the next 5 months until our son is 3 & gets the government funding towards his nursery fees & add it on at the end of the arrangement. I bank with Natwest now & find that the debit card they give you (Solo) is accepted almost everywhere so I don't really notice a difference.

Like Lindsey I am happy to try & help answer any questions people may have.....

trudij

Ive thanked the pair of you above - becaue i am fed up with people telling me I cant be having a good experience with my iva - based purely on their own experiences.Noone can say what is going to happen in 5 years, but you cant blame a company you have a contract with if they expect you to honor it !!! I dont have a home,so it will be interesting to see if they try to tack on a 6th year, but i have asked on many occasions,and been told that 5 years is the term, no more. ( Im not holding my breath on that one though!!!)

IVAs are great if you go into them with your eyes open,and are with a company that you are happy with. Do your homework, and make sure you understand all the options,and you should be fine. It seems to me that a majority of the people who are anti-iva havent doen their homework or have had a change of circumstance,and think they should be allowed to change their contract,but not been allowed to...

Im in year 4 of mine,its goign absolutely fine, and again, if I can be of any help to anyone, Im mor ethan happy to try.

taplady

trudij wrote: »

Ive thanked the pair of you above - becaue i am fed up with people telling me I cant be having a good experience with my iva - based purely on their own experiences.Noone can say what is going to happen in 5 years, but you cant blame a company you have a contract with if they expect you to honor it !!! I dont have a home,so it will be interesting to see if they try to tack on a 6th year, but i have asked on many occasions,and been told that 5 years is the term, no more. ( Im not holding my breath on that one though!!!)

IVAs are great if you go into them with your eyes open,and are with a company that you are happy with. Do your homework, and make sure you understand all the options,and you should be fine. It seems to me that a majority of the people who are anti-iva havent doen their homework or have had a change of circumstance,and think they should be allowed to change their contract,but not been allowed to...

Im in year 4 of mine,its goign absolutely fine, and again, if I can be of any help to anyone, Im mor ethan happy to try.

we are in the same position as you - just into year 4 and with no property either but have also been told that the term is 5 years. I am in total agreement with what everything you have said!:T nice to hear some positives for a change!

lindsey73

taplady wrote: »

we are in the same position as you - just into year 4 and with no property either but have also been told that the term is 5 years. I am in total agreement with what everything you have said!:T nice to hear some positives for a change!

We had the property at the beginning of the IVA so thats why we have the clause about re mortgaging and that they may make you pay for another year. Although it means another year of being poor at least the house is safe!

Glad there are some other people with positive experiences so far!

mistercovert

To the original poster Lindsey73, you are not allowed to have an overdraft during your IVA it is credit. Technically your IVA could be failed for having credit during the term. Your IVA supervisor should have told you that. Hope all goes well for you.

Rob H

lindsey73

mistercovert wrote: »

To the original poster Lindsey73, you are not allowed to have an overdraft during your IVA it is credit. Technically your IVA could be failed for having credit during the term. Your IVA supervisor should have told you that. Hope all goes well for you.

Rob H

Overdraft was to the max before IVA this bank account was not included in it so I haven't received any more money through credit in the IVA term and no my supervisor did not tell me that. Thanks for letting me know.

enzorave

Hi i have just enquired about an iva but found that northern rock hold 50% of my credit (mortgage and loan running with mortgage) i also have a secured loan with welcome finance, N.B. my advice is avoid welcome at all costs especially secured loans, ridiculous interest and bad advice in my experience. Northern Rock do not allow iva's and you cannot have an iva if you want a secured loan to be taken into consideration. i now have to sell my house after 2 years renovating it. Can't afford the bills. Looks like many months of sitting in the cold with smart price beans on toast untill house sells. lol. :rolleyes:
Good luck to every one.

De62

God I'm glad I come across this post as I'm torn between IVA or BR but have a phone interview with payplan tomorrow night.

Lots of posts seem to be against IVA's as the amount can change from what it was originally set at and that's been my biggest worry as there is only my income coming in since the OH and split and I've taken over all household bills.

Luckly all mortgage and utilities are upto date with all arrears paid off now. Some of the IVA posts panicked me a little as some people are paying as much as 600+ per month which i couldn't afford and why BR seemed the way forward.

Feels like a mine field with who to use and what road to follow but I thank god for finding this forum last week as it's kept me sane a little (if thats possible lol)

Hartley10

Like many of you that have posted on here, back in 2001, I was faced with the dilemma of getting way behind with my payments or look seriously into an IVA. I had £30k of unsecured debts (cards, car loans etc) and my mortgage was £50,000.

I was in an ok job with a steady income but the expenditure far outweighed the income.

I investigated an IVA and the posts previously have it pretty nailed on. You can't have any credit whatsoever - I wasn't even allowed a debit card - it was a cash card or nothing.

All of your debt is totalled and the IVA Supervisor will look at your income / expenditure. They will then discuss with you the "proposed payment". This is then put to the Creditors. If 75% of the creditors (and that is in number not amount of outstanding credit) then the IVA will become a legally binding contract. My debt was with 8 creditors varying from £100 to £25k. As it was the company with the largest debt didn't vote but because the others did - they had to accept the decision.

The agreement was fixed for 5 years and over the course of it, my creditors would each receive 30p in every pound I owed.

I had no problems paying it off and was lucky enough to benefit from the house price rises as in October 2003 - I remortgaged (albeit on a very high rate) and paid off the creditors in full. The IVA was complete within 2 years and they all got all of their money.

Getting credit after that was hard work but got a card with Capital One (i had to bank a £200 deposit with them) but it helped to start to build the credit up again.

All of the details will remain on your file for 6 years and it is important to keep an eye on them.

An IVA is not for everyone and can be stressful but I found it fairly easy to set up, maintain and succesfully complete. Think carefully before entering into one but don't let your debts spiral out of control....take action sooner rather than later.