IVA advice

tricklesthegreek

Hi guys,
I'm getting to the point that I'm stuck in a rutt and need a solution. My father has already got an IVA and he's two years into it, it's really helped him sort things out (he lost his business and accrued massive debts because of it). My situation is slightly different, the cost of university (some bad shopping but mostly paying rent for three years, fuel to come home, living costs) eventually have left me in massive credit card debt. I did have debts of almost £45k, I have got them down to £21k, but with interest rates on my credit cards having gone up (I am a poor credit rating now) I'm literally breaking even on credit card payments and have no money left to buy food and petrol, so am getting in a cycle of now needing to borrow more money to live which I know is going to end badly, hence needing to stop it now.
My mum was going to try and get me a loan for £10k and I would pay her the cost to the loan each month (would save me about £100 a month so would allow me some breathing space) but she is somewhat reluctant to borrow that amount of money in the current economic climate. So now I'm looking at other options and the IVA is looking like a good solution. I've had a couple of quotes that it would cost me around £200 a month which would allow me to live and breathe again. I know it means I can't get so much as a phone contract, but to be honest I don't want one!

I have a few questions though. Is it literally, you get an IVA, and so long as you keep to the terms, 6 years later from the date it's started you start blank, it drops off your credit file and you can start building your credit rating again(i.e. with a view to getting a mortgage, although everyone seems to have problems with those at the moment!) or is it 6 years from the END of the IVA? When the IVA is paid off after the 6 years, can they still come after you for the outstanding balance, or is that it? Would particularly like to hear from people who have completed their IVAs.

Next - and here's the tricky bit. I live with my fiance in our house which he has the mortgage on. Nothing is in my name and we have no joint bank accounts at all. I am registered at my parents address as I wanted to protect his credit rating (my dad's on an IVA already so my mum is the sole mortgage owner). 2 years ago my fiance and i had a mortgage together but that was settled when we moved house. A year ago when he applied for a loan they looked at my credit file as well which he had to argue the case and get out of it, luckily he got the loan but it nearly blew it for him. I since contacted the credit agencies and asked them to put a notice of dissassociation on our files which they confirm has been done. I take it now effectively that means we are separate in financial terms and they shouldn't have the right to look at my credit file when doing a search for him (he will be getting a remortgage later in the year) nor will they look at him and make a note on him if I go for an IVA?

Finally how do these debt management plans work? I hear they are slightly different to IVAs but not sure what the difference is nor how they work.

I know I may need more advice but if anyone can put an answer to any part of my thread I'd be most grateful. Am sick of the worrying about paying bills and not being able to sleep at night. I've come so close to living a life where I can break even but it's starting to slide and this time I recognise the symptoms. I'm not going to fall into the credit trap again as I'm still paying the consequences from before.

Thanks,
Nics

Useless_with_wonga

Hi,
I have answered your posts in reverse order D'oh:o Anyway in terms of your questions on this post.

I always thought your credit record would be trashed for 6 years AFTER the completion of the IVA same as Bankruptcy but having looked at other posts they seem to state the opposite i.e. 6 years from the start date of the IVA so not sure on that one still do you really want anymore credit? and if you have already aquired defaults it really does not matter that much does it? you are no worse off in or out of an IVA in terms of your credit rating.

Once your IVA is completed you should get a certificate of satisfaction (successful completion) your Debts that you entered the IVA with are then dead and buried,gone,disappeared for ever and no further enforcement action is possible by your previous creditors:T

Re your fiance he will not be affected by your IVA. As it says it is an INDIVIDUAL voluntary arrangement that ONLY applies to your finances and no one else's. The only time it will impact on him is if you try to take out a joint loan/mortgage whilst your credit rating is trashed it is more than likely to be refused on that basis. Of course it is not permitted to obtain further credit whilst in an IVA but i was referring specifically to your point about trying for a mortgage etc after your IVA is completed. Still if his credit rating is good then he can go it alone and your life would just be the same except you won't be named on the mortgage can't see that would cause you any sleepless nights would it?

Regarding DMP now this is the option i chose and my debts are similar in size to yours:o
Basically don't pay anyone anything to manage a DMP for you. Go to CCCS or Payplan both of which are Debt charities their services are therefore FREE.
You work out your budget with them and your surplus income is then paid into your plan and distributed to your creditors every month. With the charities ALL of your payments go toward your debts. With Debt Manangment Companies they all scoop off a percentage of your payments in fees (Absolutley pointless in even considering them why give them money that you could be paying off your debt)
The downside of a DMP is that it invariably takes longer to get your debt paid off as you are basically paying it all back over a long period of time. Your credit rating still gets trashed (No surprise there then :rolleyes: )
The bonus is that the Charity take control and deal with your creditors on your behalf an intermediary if you like. After a initial period of stress and worry things calm down and in my case all my creditors went very very quiet not heard from any of them since we started our DMP 6 months ago:T
I pay every month and just view it as a loan repayment. I can afford to live again. Ok i can't get credit but there is something liberating about that. I pay for everything in cash. I have a simple bank account and most important i have learned to budget and live within my means.
Remember as well that a DMP gives you the ability to raise or lower your payments according to circumstances where as an IVA will only go up with no realistic hope of reduction should you loose your job/need to repair/replace essentials.