Don't mean to be flippant but what's the point / benefit of IVA

mighty_reds

Clause to the above

If the following apply to an individual (see below bullet points) can anyone give me a good arguement / case in favour of IVA over Bankruptcy

--> Total combined unsecured / non-priority debt of £32,000 and not being able to meet minimum repayments taking into account reasonable living expenses as guided by National Debtline and CCCS

--> Renting, tenancy will be safe even if declared bankrupt

--> No assets, no savings, no lavish items at home, or car

--> Current job, career where bankruptcy is not an issue and no plans to enter into a career where bankruptcy is an issue

--> 34 years old and not intending to apply for a mortgage in the next 5-6 years (I appreciate bankruptcy may impair ability to get mortage even after 5-6 years)

--> After advice from National Debtline and CCCS and own research, confident wont get a BRO as statements over the years show no real outrageous expenditure or items, just someone living slightly above their means for a number of years and learning the hard way about juggling debts / credit card offer's.

--> Doesn't care / worry about "stigma" or name in Gazette / Paper's

Please dont take this as flippant, I've spent the last week or so almost none stop (taken some time off work) on the phone to Debtline, CCCS and Insolvency Service, form what I can gather

IVA = you get NO surplus and it takes 5 years to clear your debts, and even then 75% of creditors need to agree, and the first year or so are paying for fee's so if you fail the agreement (on your NIL surplus) you basically left with the same debt as you started and then face bankruptcy

BANKRUPTCY = (if successfully petitioned of course), get to keep 30-50% of your surplus and clear your debts in 3 years

All the above is my personal circumstances, I have a worry about a beneficial interest issue

tried to post link, not allowed, its in the Bankruptcy Forum my query about beneficial interest (parents own my flat, but I've been a regular tenant here for 5 years and all bills in my name and they purchased the flat outright years before I moved in)

that I know counts in favour of an IVA if I am that worried about it, BUT, still wanted to know really the selling points of an IVA over bankruptcy

Thanks

SouthCoast

IVAs aren’t for everyone. Leading debt help charity the Consumer Credit Counselling Service
recommended IVAs to only 3% of people with serious debt problems in 2006. There’s a
real danger that taking out an IVA unnecessarily will leave you facing the prospect of bankruptcy
anyway, despite having laid out £1000s in set-up fees.
This guide will explain in detail how an IVA works, and help you work out if you should or

shouldn’t think about getting one.

http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf

fc123

Hi Southcoast...what you doing here?
Some IVA'as are 6 Years if connected to Northern Rock....don't know the full SP on that but could always find link.

Anyway, I don't believe IVA's are suitable for many at all...they just deliver fees to the IVA providors.



We took masses of advice from all over the place prior to deciding what to do and I sat in an office of an IVA provider...who told me a PVA was different..err I don't think so...just for a partnership instead.

The advice given was wholly inappropriate for our situation but didn't stop him trying to flog me one.

On the BR board, someone posted that CAB were referring people to IVA companies now.

timberflake

My understanding is that bankrupcy will follow you around for the rest of your life, whereas an IVA drops off your credit profile 6 years after you enter into it? Also, with bankruptcy, some people may not be able to stay in the work they do (such as me, I work in financial sector).

RAS

timberflake wrote: »

My understanding is that bankrupcy will follow you around for the rest of your life, whereas an IVA drops off your credit profile 6 years after you enter into it?

No exactly.

Both are listed in the public Insolvency Register and you may be asked at any time in your life if you have ever entered an insolvency arrangment, Or you may be asked if you have ever been bankrupt. The answer to the first is yes for both for BR and an IVA.

Both also fall off your credit record after 6 years.

There are a small number of employment situations that preclude bankruptcy, where people are advised to do an IVA instead. However, you need case by case advice as we know that some people in the BR forum here who work in financial services and have gone BR with their employers' support.

So the best thing is to speak to HR, anonymously or through your union, in the first instance, to find out where you really stand on both options.

c53204

If you have no assetts, no mortgage or car, etc. Then by not paying your unsecured loans, what could they reposess i.e. what were the loans for?

If your circumstances are as you say, I would be brave, let them threaten court action - leading to an agreement for reduced payments.

gettingoutofdebt

The bullet points that you have listed there are very similar to my situation. I spoke to a couple of IPs and was seriously considering an IVA but thought that BR would be more suitable for me. I know there are people in the Police or Armed Forces that cannot declare BR without losing their jobs so this would be the only reason I can see for having an IVA over BR.

For me an IVA is just too restrictive with 100% of your disposable income being taken for 5 years and, I think, that if you miss more than 3 payments in that time then the IVA fails. Whichever option I was going for would have to mean that my financial issues would be over and an IVA wouldn't as it has the possibility of failing whereas BR cannot. Either IVAs need to be more flexible (say only paying 75% of disposable income) or there needs to be something in between an IVA and BR.

fiveyearplan

mighty_reds wrote: »

Clause to the above

If the following apply to an individual (see below bullet points) can anyone give me a good arguement / case in favour of IVA over Bankruptcy I can't see one in your instance.

--> Total combined unsecured / non-priority debt of £32,000 and not being able to meet minimum repayments taking into account reasonable living expenses as guided by National Debtline and CCCS

--> Renting, tenancy will be safe even if declared bankrupt

--> No assets, no savings, no lavish items at home, or car

--> Current job, career where bankruptcy is not an issue and no plans to enter into a career where bankruptcy is an issue

--> 34 years old and not intending to apply for a mortgage in the next 5-6 years (I appreciate bankruptcy may impair ability to get mortage even after 5-6 years) you shouldn't have any problem in that time provided you have enough deposit.

--> After advice from National Debtline and CCCS and own research, confident wont get a BRO as statements over the years show no real outrageous expenditure or items, just someone living slightly above their means for a number of years and learning the hard way about juggling debts / credit card offer's.

--> Doesn't care / worry about "stigma" or name in Gazette / Paper's

Please dont take this as flippant, I've spent the last week or so almost none stop (taken some time off work) on the phone to Debtline, CCCS and Insolvency Service, form what I can gather

IVA = you get NO surplus and it takes 5 years to clear your debts, and even then 75% of creditors need to agree, and the first year or so are paying for fee's so if you fail the agreement (on your NIL surplus) you basically left with the same debt as you started and then face bankruptcy

BANKRUPTCY = (if successfully petitioned of course), get to keep 30-50% of your surplus and clear your debts in 3 years The debts would be wiped on discharge but if you did get an IPA you would pay for 36 months.

All the above is my personal circumstances, I have a worry about a beneficial interest issue

tried to post link, not allowed, its in the Bankruptcy Forum my query about beneficial interest (parents own my flat, but I've been a regular tenant here for 5 years and all bills in my name and they purchased the flat outright years before I moved in) You are a tenant therefore have no beneficial interest in the property. Do you have a tenancy agreement? If not go and buy one from WH Smith. It doesn't matter if your parents own the property - it is not yours.

that I know counts in favour of an IVA if I am that worried about it, BUT, still wanted to know really the selling points of an IVA over bankruptcy

Thanks

In cases like yours I have never seen a case where IVA has any benefit over BR. I have seen a lot of people go BR after they have struggled for a couple of years paying IVA - they would have been through the whole BR process in that time.

mighty_reds

Great reply fiveyearplan, sorry only just seen it :money:

Confused_Ren

Just to clarify here does this mean that an IVA will not affect a financial job the same way as bankruptcy would?

Not_so_wise_one

It really does depend on the job role and the company you work for. Some jobs say no insolvency whatsoever, others say it is okay. Speak to your union or HR dept or manager if you can. Also take proper advice.