Considering an IVA - advice pls

Billy74

Hi all,

Due to a business going to the wall last year and a serious injury to my partner we have found ourselves with approx 61k of debt, across cars, loans and CCs.

In summary:
CCs: total 23,680, paying 539 pcm
Loans (unsecured): total 32,132, paying 929 pcm
HP Car Loan: 4,700 (due Aug 2010, balloon payment or refinance), paying 142 pcm
Catalogue: 500, paying 65 pcm
So...total debt outgoings 1,675

Total income pcm: 2,713
Living Costs (mortgage, etc) pcm: 950

I've spoken briefly with an IVA agency today, who basically advised they would be looking for as much as possible with an allowance of 697 for food, transport, clothes, etc, over 60 months - so that would be a repayment of 1,000 over 60 months, which equals pretty much the total debt we have.

Does this sound like a typical IVA agreement?

Also, would they still look for house equity at the end of the period?

And any idea what might happen with the HP car loan?

Many thanks in advance...

Charco_2

Get a second opinion!

As for the HP, it's a secured debt so you would continue to pay that - same as if you own a home with a mortgage.

If you have these questions and you spoke to an IVA company today it would sound like they didn't exactly do a good job! Who was it?

adfax

Hi

Sorry to hear about your problems, but deciding to do something about it is the hardest part.

I would speak to several of the free help lines - Paypal, CCCS or CAB - to get their advice on this.

It is true that any IVA proposal will look to repay as much of the debt as possible to the creditors, and during this time you will be expected to live a more modest life style. That said, they will want to make sure that any budget is realistic as it does have to be kept to for 5 years.

Whilst 60 x £1000 may equal the total debt as it stands today, that is without 5 years' worth of interest being added, so you are gaining (even if the actual capital owed isn't reduced).

I don't think there is a typical agreement with regards to how much is repaid - it varies. For example, my IVA is about 22p in the £ plus a lump sum of approx £6000 in year 2 (I am expecting an insurance payout), plus any equity in my property at the end of the IVA.

On this, there are a number of other posts which explain how the equity release works, but basically you will only have to release up to 85% LTV, and then only your share (ie if the house is in joint names then the equity is split). If you can't release the equity (ie can't get a remortgage) then typically the IVA will run for another 12 months.

Regarding the car, I think you are normally permitted to keep an HP agreement going (as this is secured debt), but what happens with a balloon payment I don't know.

Hope this helps, but your best bet is to speak with CCCS, Payplan, CAB or another free advice line.

Good luck

althas

Have a browse of www.iva.com for other IP's to talk to. As with anything, shop around. There ARE some dodgy companies out there, so this is essential. On iva.com there are a LOT of reviews and recommendations by the people who count (the customers) of the IP's, so you will get some names of well used and recommended people

The whole IVA will be based on the joint income and the monthly expenditure. As it has been said, HP is a secured loan (like the mortgage) so this can not be included in the IVA agreement, but the repayment should hopefully be counted as one of the allowances. But ask the question if the IP. They may say to hand the car back, I honestly dont know on that one

Also don't forget that the IP will have their charges included within your monthly repayment, so you will not be paying ALL of it back to the creditors. But again charges vary from IP to IP

Sorry if this all sounds a little cafuffled, but there is no exact science to IVA's. Mine for example is around 40p in £. I have heard of ones as low as 19p, and ones over 50p upwards. They are INDIVIDUAL agreements so all different

But I will say well done for taking the step to start with this, I was terrified, as I am sure others were, so we know what you are going through, and don't forget you are not alone, we are always here to help and support if we can

Max_1066

Re the car they should allow the cost of the HP however the problem arises when the HP loan finishes - within the five years of a potential IVA.

In theory when the HP finishes the amount you were paying on the loan would need to be paid into the IVA. The problem is you'll be without a car and unable to refinance ? I couldn't find a solution to this and had to borrow a car from my brother. Hopefully someone else on here will be able to help in that respect.

I'd recommend talking to 2 or 3 IVA companies asap to get a general view.

Charco_2

HP can cause a problem but if you're with a good IP it's not insurmountable!

AS LONG AS YOU NEED THE CAR, The monthly repayment to the HP is an allowable expense on your I&E and when the term of the HP finishes you still need a car so the IP has to make allowances for that. If that means you hand the car back and try to get a new HP agreement then so be it. If it means you have to halt your IVA repayments to build up a Balloon PAyments for the car then that what you have to do!

You're supposed to be standing on your own two feet again and repaying as much as you can afford to your debts... taking a lend of a car from your brother is not something you should have to count on!

ciderwithrosie_2

Just to give you a comparison - I'm paying £470 a month on a 55k debt. Get a couple more quotes at least before you decide. I got a quote from National debtline for over £650 so put it off for a year and did my own DMP. One of my creditors persistently refused to play ball so the CAB persuaded me to talk to another Insolvency firm that runs a 'surgery' there once a month. They've been really good and negotiated a realistic amount for us to live on whilst it's being paid off.

best of luck

CWR