individual voluntary arrangement

HILLY_3

has anybody heard about this before , its where you get some of your debt wrote off after all your creditors have a meeting . I am thinking of doing this but i want to know if there are any hidden catches , im at my wits end trying to pay my debts off and cannot see another way out

inmypocketnottheirs

Have a look round this site, search for CCCS and contact your Citizens Advice Bureau to get some tips. If you post a statement of affairs here, (a list of your income and outgoings) I am sure someone will offer some valid advice,

You have taken a positive step here, well done!

HILLY_3

thanks for your help

kathfisch

ditto, you've made the first step by looking for ways to sort out your debt. I don't know about IVAs but I'm sure someone on here will do! As inmypocketnottheirs says, the consumer credit counselling service or citizens advice will be up to date about your options and will be able to advise you individually FOR FREE! Keep us up to date and post details of your incomings/outgoings if you'd like us to take a fresh look at it! Good luck x

fatbelly

It's an option for those who would ideally go bankrupt but there is some reason why they can't. There's some useful info on the National Debtline site if you click here

The following is an extract

Advantages
- You may well be running a small business which would be difficult to keep going if you were bankrupt.
- You may be a profession where you could lose your job if you go bankrupt such as accountancy/police/armed forces.
- You may have access to a large lump sum and want a formal arrangement with your creditors to accept the lump sum and write off the rest of the debts.
- You may have a very high monthly available income to make payments.
- You will not automatically lose your house or other assets which can be kept out of the IVA with the agreement of the IP and your creditors, although the creditors will usually want most of the equity in your house.
- You will not have the same restrictions on you as you would if you went bankrupt, e.g. you can still use your bank account without saying you have an IVA.

Disadvantages
- If you do not keep to the terms of the IVA then the IP or your creditors can make you bankrupt.
- If creditors do not accept the IVA proposal you are back to square one. You cannot make another IVA proposal for 12 months.
- If you paid an up-front fee for your IVA and it is not accepted, then you will have lost the fee and be in a worse position than when you started.
- If you own your house the IP and creditors may make you agree to sell your house as part of the IVA. It is standard for IVA agreements to include a clause that you will get your house valued after a set number of years with a view to giving most of the value or "equity" in your house to the creditors. You may be able to pay instalments for an extra year to cover the amount of equity in your home. However it could mean selling your house if you cannot raise the money. Your options may include you or a partner taking out a new loan and even securing it on your house. This may be difficult as your credit rating may not be good enough to get a loan through a reputable lender and you would be putting your house at risk.
- There is a risk that the IVA is agreed on the basis of monthly payments that you cannot afford long term. You must be very careful that the payments are set at a realistic amount in the first place.
- If your circumstances change and you can no longer afford the payments your IVA may end if the IP cannot persuade the creditors to accept a new agreement.

HILLY_3

silly question , will i have to pay the company i use for the iva

Hitme

HILLY wrote:

silly question , will i have to pay the company i use for the iva

Yes, though it comes out of what ever the agreed monthly payment is. Expect it to be in the region of 6-7K over the 5 years the IVA normally run for.