IVA or Not - That is the question?!?

bennyboy83

Hi Wonderful People!
I'm new the forum but after looking at the good information I decided to give it a go...

Basically here's the story:

NR (Together.... cough..) Mortgage - Balance £92000
Secured Loan - £32000
Car HP - 12000

NR Together Unsecured Loan Portion - Balance £14000
Credit Card - £700 (14.9%)
Credit Card - £680 (Interest Free Until October)
Loan - £413
Overdraft - £5700 (10.9%)
Overdraft - £980 (Interest Free)
Overdraft - £1300 (Interest Free)
Catalogue - £195 (Paying Off)

Myself and the good lady are in negative equity by around £15000 at the moment.
We are both in very steady jobs and earn enough to still have £300 disposible income per month after paying the bills.
We have now cut up the credit cards and have a seperate bank account with no borrowing with a view to paying off the large overdraft - have an arrangement with the bank to do so.
We have never missed a payment on anything and are able to continue in this way (albeit slowly!).

We thought about getting a joint IVA for £24k (including the NR unsecured loan) but are worried that NR will not take kindly to such a suggestion and apply to make us BR (plus then the negative equity might become a problem).

We don't know whether to ride out the credit crunch and maintain our repayments or go with an IVA, risking the NR making us Bankrupt and ruin our fair/middling credit history.

Has anyone been in this situation or have experience with NR over an IVA?
Does anyone have any suggestions?

Many Thanks.

Dr_Hook

Hi Benny - welcome to the forum :hello:

Northern Rock won't petition for your bankruptcy just because you propose an IVA, especially in light of the fact that you're in negative equity - they only stand to lose out by making you bankrupt.

Having said that, NR are notoriously reluctant to accept IVAs, especially where 'together' unsecured loans are involved. Given that they represent almost 60% of your debt, they will have the casting vote over whether your IVA proposal is accepted.

An IVA is a last-chance saloon before bankruptcy and carries many of the cons associated with bankruptcy. On the face of it your circumstances look like such a severe solution may not be warranted, and you might be better snowballing the overdrafts and credit cards and then chipping away at the NR loan. This will obviously be easier when the car HP is paid off and you have extra to throw at your other debts.

Have a look on the DFW board and post up your SOA for suggestions (link)

Good luck!

leanne2402

Hi,

Just having a quick look at your situation, and please bear in mind that going inot a IVA isn't a qick fix. I myself i'm currently going through mine at the mo, and it wasn' the best situation to have to go through (but now, i'm so happy with it).

Simliar to you, NR held the biggest chunk of my debt but they did agree on my IVA BUT some of the changes they made were very hard and took alot of thinking about before we agreed.

I would get some advice from one of the free companys and see what they say.