What is the point of IVA? why not make arrangements your self?

newrecruit

Why IVA?
Often having IVA will give you adverse credit rating for years to come and even your circumstance changes and manage to write off the debt, you will struggle to raise any finance in the future. In some instances, it is worse than bankrupcy.

Far easier and more effective way, I feel, is to go to National Debtline website, and download the Personal Budget sheet. Do your income/outgoing balance as accurately as you can. Then enter the money owed to your creditors. The budget sheet will calculate how much you should offer to each creditors (sometimes it could be as little as 1 - 2 pounds per month!). More importantly it will calculate what you CAN comfortably afford.

Be single minded....do NOT enter into any arrangements with the creditors on their terms. Just pay that amount each month WITHOUT fail by sending them a cheque (make sure you photocopy the cheque, keep the records and send it by recorded delivery)...the creditors will try to force you to pay more but do NOT be intimidated by them. I wouldn't call them to pay with your debit card, because you may be intimidated to pay more.
If they call you everyday, you can lodge complaints against them with your local police and Consumer Direct for their Nuisance Calls...It is against the law for them to harrass you.
If they issue door step collection or bailiffs, they do NOT have the power to enforce it without the court order...know your rights!
If the bailiffs comes, keep the window and doors shut and don't open the door to them.
If they try to intimidate you, talk through the closed door, demand to see the court papers and tell them that you will call the police.
As long as you are keeping up with the payments (even if it is 1 pound per month but the creditor wants 40 pounds, say) and you can prove that that is all you can afford (use your Personal Budget Sheet) the COURT WILL BE ON YOUR SIDE!

Also if you have these arrangements and have been honouring them, there is every likely hood that you will find a lender, espcielly your local Credit Union, who will offer you furthe loans to take you out of the debt misery!
Of course, I do not recommend getting debt to get you out of the debt, but for example, if you needed to buy a car for your work...
With IVA, you can't but with such voluntary arrangement made by your self (which is FREE!) you MAY BE ABLE TO!

Know your rights! Don't fall into the trap of listening to advise by people who has alterior motives!

FraudBuster

I think that this Guide gives a balanced view:


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

Radiantsoul

IVAs work for some people who have reasonable surplus income and want to retain their home. Also for professionals who would otherwise lose their home.

But I agree that for those without assets or no professional reason their is probably not a lot of point.

peachyprice

Believe me I am no fan if IVA's, but you're missing one vital point. There is no safeguard if you make your own arrangements, creditors are not obliged to freeze interest, they are not obliged to continue accepting reduced payments. They have you by the balls until the debts are paid of because they are within their rights to renege at any moment, there are many many people who cannot live with the stress and insecurity of this situation hanging over their heads for many years.

One small saving grace for an IVA is that it is legally binding, which protects BOTH sides.

Nargleblast

Newrecruit - if you have the time, the background knowledge of finance and the law, the stamina and the willpower to go it alone then by all means do so. Lots of people do just that. However, most ordinary people in debt are confused by the legal minefield they step into when they get into debt, and trying to deal with it alone can cause more stress than it relieves. Anyone who is in debt should read up on the different ways of resolving it and get advice, preferably from a debt counselling firm such as CCCS/Payplan/National Debtline(organisations that do not charge for their advice) before making a decision. For some, it will be a do it yourself debt management plan. For others a plan run by one of the above companies. For some an IVA is best. For others, bankruptcy hits all the right buttons. We should not promote one way above any other, or run down any particular solution just because it does not suit ourselves. Horses for courses, as they say. One thing is true though - whichever solution you choose, your credit rating is totally stuffed for a number of years. My OH and I took the decision to go from DMP to IVA because with an IVA we would be debtfree long before going into retirement, and our DMPs would have run for too many years to be feasible. We now have a debtfree date in sight and plans for overpaying our mortgage once the IVA is finished so that come retirement we will have a chance of some kind of comfortable life with less of a debt.

Deep_In_Debt

Even if you make your own arrangements it still trashes your credit file for years to come as you are defaulting on the original agreement by making reduced repayments.

Deep_In_Debt

Furthermore, it's generally not recommended to take futher loans to clear debts, as it's not actually clearing your debt but adding to it and often over a longer period. Many of us have been there, done that, got the T shirt and now find ourselves where we are.

newrecruit

Deep in Debt, I am not here suggesting to get debt to clear debt
It is always a bad idea and people do get into trouble even with debt consolidation loans.
What I am saying is that there may be time in the future you may wish to get something on a hired purchase or get a car finance.
If you have IVA, it is often the case that you will not be able to get it, but if you have proved your self by keeping up with the repayments you have arranged by yourself, situation is different...this is what I have found

Deep_In_Debt

Personally, when it comes to obtaining credit in the future whether you've been in an IVA or a dmp then I don't think there is not a lot of difference. You still have to prove that you can manage your repayments in an IVA. So whether you wish to get something on HP your credit file will still be trashed regardless of dmp or IVA. Dmp's often last longer than IVA's so your credit file is often bad for longer after you've finished a dmp.

Nicc

And I think it depends on the size of your debt. For me, a DMP would not have been a reasonable idea...I'd be long dead before I'd have repaid it. Not only that, the scale of the debt (and the circumstances under which I came to have it) caused me to develop an anxiety disorder. By the time I finally got the courage to face up to things, it took me 2 weeks before I even plucked up the courage to contact am independent debt advisory service. Accuma basically took it all out of my hands, sent me proforma letters to send to creditors and I had no problems with them calling or threatening letters, which I don't think at the time I was mentally strong enough to cope with. For the service I got and the peace of mind, in the final accounting, I didn't think their fees to be at all excessive, certainly cheaper than a solicitor, for example.

So while for some, they can face up to all the calls and letters while trying to agree a DMP that's feasible. for others it's sometimes better (after doing homework on which IVA company you go with) to go put your problems in the hands of a professional.

RAS

Nicc wrote: »

So while for some, they can face up to all the calls and letters while trying to agree a DMP that's feasible. for others it's sometimes better (after doing homework on which IVA company you go with) to go put your problems in the hands of a professional.

Anyone on a DMP can write and insist that all comms are writtenm, and pass the letters onto their DMP provider.

If the creditor refuses to comply, report them to the OFT.