IVA - What is it? & is it bad?

MaccyB_2

I have just had an appointment with a debt management company called Payplan. They are going to help me with my debt and gave me loads to advice. She mentioned that in 6 months they were going to suggest an IVA with my creditors. She said that it was an alternative to bankrupcy. My husband & I have stupidly racked up over £60,000 of debt and the idea that most of it is going to be written off after 5 years just seems odd. What is the catch? is there a catch? The whole thing just gives me bad vibes. Does any one know wbout these agreements and there long term lasting effects? Please someone help!

davek1

MaccyB

Firstly payplan are a very good source of advice and wouldn't suggest this if ir wasn't the right course of action for you. Secondly there is no catch. The legislation was designed to give you a second chance. However not all your debt will be written off only a percentage so for example you have 60k of debt lets say that you get 30% written of that 18k leaving you 42k to repay over the year period equatting to £700 per month. Thereafter the rest is set aside.

Thats just an example and just figures i pulled out of the air. Hope that helps.

Dave

MaccyB_2

Thanks that does help but she didnt say anything about only part of the debt being written off. She told us that after 5 years what ever was left would be written off i suppose that is the percentages maybe? we have been told we have to pay £365 a month for the next 5 years. I can't deny that it is a huge relief knowing that there is a light at the end of a very long tunnel. Thank you for the advice.

angelstar25

Hi,
Payplan are excellent, I am in the process of setting up an iva, I am single and have approx 27k of debt, I should be paying around £200 a month, I will get about £16'000 of my debt wrote off if my iva is successful, but you've done a good thing ringing payplan they will help you in everyway possible, good luck
angelstar

MaccyB_2

angelstar25 - will they write off all your debt at the end of the 5 year period? you make me feel a lot better - i was worried cos although i racked up the debt in marriage, most of it is in my name. Now that mike & I are splitting I was really worried because legally he could have left me with it all. Luckily it is a really amicable split and he is taking on half with me in the payplan agreement.I was worried how I was going to cope as a single mother with 60k of debt. Thanks guys i feel like a real weight is off my shoulders.

Limana68

Hi there,
Just wanted to say that me and my hubby entered into a IVA when we had 43K of debt, and it was the best thing we could have done. We paid 25p to the £1 of what we owed.
We managed to pay it off early with some equity so instead of 5 yrs we finished it in 3 1/2 yrs as the creditors all agreed in our favour. We had originally gone with a Debt management company which charged us for our custom, but after speaking with Citizens advice we were told a IVA was the best option as you know that as long as you pay the payments on time, then you will be debt free in 5 yrs!
Every yr you have to fill out your outgoing etc and they review your payment, and you may have to pay more or less if your circumstances change. What I will say is that when you come to fill out your expenditure etc write down EVERYTHING, even down to buying toothpaste etc.

Best of luck to you and if I can help anymore let me know

Liz

angelstar25

hi,
Payplan have told me that I would pay £200 a month for five years and then thats it the end of it, however from the time you take your iva out, you will have credit problems for six years, then its wiped off your file, you must be able to pay the monthly payment, as if you miss a payment your creditors could declare you bankrupt, the way i look at it is its a lot less than I'm paying now, and I wouldn't want anymore credit, and lets hope never will ever again. Its the only real option for me at the end of the day, either that or a dmp, but according to payplan dmps are a lot more damaging on your credit files.
good luck, if you need anymore help or advice feel free to private message me
regards
angelstar

MaccyB_2

thanks everyone, not only have you all put my mind at rest i thought i was the only one on the planet with so much debt! thank you all very much. I just cant believe that we got into this predicament in the first place. I guess while you can afford it you dont realise you are in the predicament till you cant! I don't feel like such a failure anymore.