Advice regarding starting an IVA

in IVA & DRO
7 replies 921 views
Hi all,

My wife and I have a 1year old and another one on the way. We have several credit card debt and personal loans but are really struggling on repaying even the minimum and are starting to miss payments.
Total amount is about £16k with 12 creditors. We went to CCCS but they suggested a repayment plan which we don't feel is achieveable.

We would like to go down the IVA route as we would wipe our debt within five years and really be able to sort out money out.

However I have a few questions which I would really appreciate peoples advice on!

- On an IVA, if I receive a bonus for example, or if we find we have a spare £20 at the end of the month - does this have to go to the IVA or can we put it away in a savings account?
- Can anyone recommend an IVA company?
- How do the fees which an IVA company charge work? Is it usually upfront, or built into the repayments?

Many thanks in advance!

Replies

  • If an IVA company asks you for money up front then run as fast as you can! They should take the payments as an installment over the 5 years.
    The best place to start is a company called Payplan, if you are not suitable then they will tell you up front that you are not suitable and as far as I am aware they will not charge you if the IVA is not succesfully set up. They can also offer a DMP as an alternative as per CCCS. Your local Citizens Advice should also be able to recomend some reputable local companies, the IVA market is not a well regulated market though so you need to be careful.
    However, if CCCS did not advise that an IVA was a suitable option then chances are you are not suitable. You do need a good amount of surplus income to enter into an IVA, usually at least £200+. In addition, a lot of creditors are refusing IVAs at the minute so you need to have a word with an IVA specialist to see who is accepting and who is not. If 25%+ worth of your debt is with one creditor they can refuse the IVA proposal causing the IVA to fail at step one.
    Usually an IVA is at a set rate but I have seen some where the amount you repay is reveiwed and therefore the payments can go up in subsequent years.
    It is very important that your circumstances are not going to change in the next 5 years, if the IVA fails once it is set up then your Insolvency Practitioner should be making you bankrupt.
    IVAs are not for everyone and other insolvency options may be available to you so do not be afraid to get a second opinion from another free agency, like I say Payplan do IVAs and DMP so they would be a good starting point.
    Hope this helps.
    Information provided is general and not specific to an individuals position. For more specific advice an agency such as National Debtline, Citizens Advice Bureau, CCCS or Payplan should be contacted.

    Any opinions given are my own and not those of my employer, past or present. ;)
  • Just noticed that you said a second child is on the way, do not forget that children are likely to eat into your surplus income in a big way at this could lead to any IVA that you may have set up becoming unafordable.
    Information provided is general and not specific to an individuals position. For more specific advice an agency such as National Debtline, Citizens Advice Bureau, CCCS or Payplan should be contacted.

    Any opinions given are my own and not those of my employer, past or present. ;)
  • I personally would take some notice of what cccs say.
    If they think that a DMP is a better option then I would find some way of going this route.
    We have been advised by CCCS to take up with an IVA but am reluctant.
    Not sure it's as easy as it all being over with in 5 years as from what I have read, the fact that you have had an IVA stays on your creedit file for 6 years after the IVA has finished so it could be 12 years before you can even consider applying for any more credit so if at some time in those 12 years you decided for example that you home or car are not big enough, as I understand it, it's tough!
    If there are any changes you can be forced to go bankrupt if you cannot meet the agreed payments
  • Deep_In_DebtDeep_In_Debt Forumite
    8.6K Posts
    Part of the Furniture 1,000 Posts Photogenic Mortgage-free Glee!
    Yep, as others have said, IVA's are only suitable for a small percentage of people and usually if you have property to protect. A lot can happen in 5 years and if you lose your job or your circumstances change, you may be declared BR. Also, the budgets and living costs in an IVA are very, very tight and don't allow cost of living rises and changes in circumstances. A dmp is far more flexible.

    CCCS would have recommended an IVA if they felt it was suitable for you. Don't go to an IVA company, they will recommend one for you simply because they get a lot of fees from them.
    Debt 30k in 2008.:eek::o Cleared all my debt in 2013 and loving being debt free :)
    Mortgage free since 2014 :)
  • Thanks everyone for your advice.

    I think maybe I had 'IVA' stuck in my head and didn't take time to consider the DMP. Will have a look at it and like you have said, if that is what CCCS have recommended, then it must be best for our situation!

    Thanks again
  • I think and Iva is a good option, although 16k debt is now deemed as low in comparsion to the average iva companies are now declining lower debts because they get rubbish Supervisor fees and nominee fees a debt of 25k plus is more favourable for insolvency practioners, cccs like to put customers on dmp plan for 3-6 months then offer and IVA if it looks like it can work although if you have no assetts it may be worth looking into bankruptcy then the discharge will be after 12 months.
    Aqua card - £250 Limit up to date, Jd Williams £150 limit up to date, Argos store card £400 limit up to date, Next £300 limit up to date.:beer:
  • To_be_FreeTo_be_Free Forumite
    121 Posts
    Part of the Furniture 100 Posts Combo Breaker
    Forumite
    I personally would take some notice of what cccs say.
    If they think that a DMP is a better option then I would find some way of going this route.
    We have been advised by CCCS to take up with an IVA but am reluctant.
    Not sure it's as easy as it all being over with in 5 years as from what I have read, the fact that you have had an IVA stays on your creedit file for 6 years after the IVA has finished so it could be 12 years before you can even consider applying for any more credit so if at some time in those 12 years you decided for example that you home or car are not big enough, as I understand it, it's tough!
    If there are any changes you can be forced to go bankrupt if you cannot meet the agreed payments

    Just to say an IVA only stays on your credit file for 6 years from the date it starts not the date it finishes so if you are on a 5 year IVA then it would come off your credit file 1 year after it is finished.
    :laugh:
    Free at last
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