IVA Help please - mind racing!

DF2014

Hi,

Am roughly 43k in debt (cards/loan/overdraft) and have made my first call today to national debt advice line. So desperatly want to be out of debt!

I wanted to do a DMP (after all I spent the money - I feel I should pay it all off) but it has left my mind racing - DMP would take me 11 years to pay - so I was thinking of an IVA.

I have a few questions - have been reading posts for hours and can't seem to find quite the right ansers for me - hope someone out there can help:

1) If I proceed with an IVA - what will happen to my current morgage - do I have to tell them?
2) What will happen to my partners credit rating?
3) After 6 years from commencement of IVA does the history TOTALLY dissapear - or can it still crop up during future morgage applications etc?
4) I am due to start receiving Disability Living Allowance for my autistic son - will I have to declare this in my income (it is intended for him?!? not my debts)?
5) Can I have a bank with a DD facility whilst in an IVA?
6) How much more adversly does an IVA effect your credit scoring than a DMP?
7) What would be a typical credit score at completion of the 6 years IVA.

Sorry for going on and on - just don't know what to do!

Thanks

thecableguy12

DF2014 wrote: »

Hi,

Am roughly 43k in debt (cards/loan/overdraft) and have made my first call today to national debt advice line. So desperatly want to be out of debt!

I wanted to do a DMP (after all I spent the money - I feel I should pay it all off) but it has left my mind racing - DMP would take me 11 years to pay - so I was thinking of an IVA.

I have a few questions - have been reading posts for hours and can't seem to find quite the right ansers for me - hope someone out there can help:

1) If I proceed with an IVA - what will happen to my current morgage - do I have to tell them?
2) What will happen to my partners credit rating?
3) After 6 years from commencement of IVA does the history TOTALLY dissapear - or can it still crop up during future morgage applications etc?
4) I am due to start receiving Disability Living Allowance for my autistic son - will I have to declare this in my income (it is intended for him?!? not my debts)?
5) Can I have a bank with a DD facility whilst in an IVA? you have to tell them
6) How much more adversly does an IVA effect your credit scoring than a DMP?
7) What would be a typical credit score at completion of the 6 years IVA.

Sorry for going on and on - just don't know what to do!

Thanks

forget dmp, it will affect you r credit rating for 11 years dmp snfd ivs willl affect credit rating, you can have a dd facility, yes you will have to disclose dls unless you got it paid into a different bank account, it will drop of after 6 years, you have to disclose info of mortgaes but if neg equity dont worry if they is any you may be expected to release equity on the 4th year to clear iva early, your partners credit rating will not be affected, dmp will affecr t less but iva is quiker than dmp, no one will lend if in dmp, but after 5 years they will lend again, iva is best option i used to work in that field, pm m if you want. only question on mortgages app is have you ever been made bankrupt si tell the truth and say no, hope helps if you p, mre i can give mobile umner to talk to you and let you know if you would be accepted

althas

Hi DF

1st off, well done in taking the 1st and hardest step and facing upto the problem

I had the same mentality as yourself about DMP and IVA and bankruptsy and felt the IVA was the best middle of the road solution to repaying what were after all were MY debts. So I know where you are comming from on that. I am still going through my IVA process, so nothing finalised yet, but I will try help on your questions

1. Yes you do have to tell your mortgage lenders. ALL creditors have to be disclosed. I do not have a mtge myself, but from what I understand, there could well be a part of the IVA in the final years to release equity in the house (if there is any) to repay some of the debts also. This is something you will need to talk to an Inolvency Practitioner about to get a professional oppinion. Go through CCCS or such to start with. IVA are what they say, an INDIVIDUAL voluntary agreement, so each case is different
2. our partners credit rating should not normally be affected as YOU are the one going into the agreement. The only problem may arrise if you have say a joint loan or joint account, your partner is joint and severabily liable for the debts, so the lenders may well chase them, and if they default then that is where the problem is
3. The whole idea (as i understand) is your credit file is clean after the 6 years and I guess you will have a 0 score and need to build it up again
4. Sorry that I do not know, another question for an IP
5. you can have a basic bank account. A few places will allow you one if you are in an IVA. The current favourites seem to be Co-op and Abbey National. I am with Abbey and yes I can have DD and SO. Just nothing more than an atm card and no chequebook. I also have one of the prepay credit cards so I can do shopping in the internet etc
6. I would think both will affect. The difference to me is that a DMP is longer and will show defaults, maybe CCJ's and such. With a DMP there is no guarantee that the companies will freeze interest and charges, and if they do now, aa couple years down the line they could change their minds and hit you for them agaon. IVA is a legally binding agreement, once agreed they can not do this
7. Again I would GUESS that the credit score would be a 0 as your history would be cleared

Good luck on what you decide to do. Just a couple of suggestions

Go through CCCS to begin, as they are an independant charity. Do NOT go to a "comerical" company as all they want is your money intheir charges, and don't give a hoot about aftercare. And do NOT pay anything to a company for advise before the IVA is agreed. Some charge upfront and if the proposal is rejected then say bye bye to the fees already paid

Deep_In_Debt

Although you have been told that a dmp will take 11 years to pay off it's still worth considering. I was told that it would take me 9 years to clear my dmp but have reduced that term to just under 5 years in 18 months of paying into a dmp,

Be aware that IVA's are very restricting - you are stripped back to a very basic budget and remember a lot can happen in 5 years - if you miss payments for whatever reason, it could result in BR. Also your first few payments will most likely go in IP fees so your creditors will see little or nothing of your money for a while.

With a dmp, it's much more flexible, if you miss a payment it's not necessarily the end of the world and if you need to reduce it for whatever reason, it fairly easy to do - and the budgets are much more generous.

Do think carefully about it. I'd suggest you call CCCS, Payplan, National Debtline or CAB (all free advice) and discuss your options.

Also, pop over to the DFW board who will probably come up with some other suggestions that I may have missed.

Good luck!