Thinking of an IVA

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Barkley_2
Barkley_2 Posts: 63 Forumite
edited 20 July 2010 at 10:41PM in IVA & DRO
Hi all

I have been browsing the forums and have now decided to seek further information.

We are looking to go down the IVA route. I have a question

Are we able to set up an IVA as a couple with combined debt as to "individual debt"? I have creditcards and 2 loans, the wife has 1 loan in her name, and we have 1 joint loan.

I earn Net £1600 the wife £475. We have £1700 outgoings which includes loans utilities etc etc. The £375 has to pay for groceries, toiletries, food, petrol, school dinners and dosnt reach the end of the month which means we go into the overdraft again.

Also, does it cost anything to set up an IVA? I know you pay an IP, but is this as an upfront fee or is it included in your monthly repayment?

Any advice welcome.
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  • To_be_Free
    To_be_Free Posts: 123 Forumite
    First Anniversary Combo Breaker First Post
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    Barkley wrote: »
    Hi all

    I have been browsing the forums and have now decided to seek further information.

    We are looking to go down the IVA route. I have a question

    Are we able to set up an IVA as a couple with combined debt as to "individual debt"? I have creditcards and 2 loans, the wife has 1 loan in her name, and we have 1 joint loan.

    I earn Net £1600 the wife £475. We have £1700 outgoings which includes loans utilities etc etc. The £375 has to pay for groceries, toiletries, food, petrol, school dinners and dosnt reach the end of the month which means we go into the overdraft again.

    Also, does it cost anything to set up an IVA? I know you pay an IP, but is this as an upfront fee or is it included in your monthly repayment?

    Any advice welcome.

    Hi,
    First thing is do not pay any upfront fees, your IP will negotiates their fees with the creditors which will be taken out of the amount of money recovered.
    :laugh:
    Free at last
  • Barkley_2
    Barkley_2 Posts: 63 Forumite
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    Thanks for the reply.

    I noticed on an IP site that it says

    "Not everyone with debts over £15,000 will be eligible. You must be insolvent, meaning you cannot pay your debts as they fall due."

    I presume it means that if you making the repayments on their due date then you wont be eligable. Its only through obligation to pay that I am finding myself in financial difficulty.

    Will give them a call tomorrow and see what they say.
  • fatbelly
    fatbelly Posts: 20,659 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
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    Call National Debtline - not enough info in your post to tell whether this is a good solution for you or not. Run through the situation with them. If you phone an IVA-pusher, what do you think they're going to recommend?
  • adfax
    adfax Posts: 98 Forumite
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    Just on the comment re having to be insolvent; if you are having to use your overdraft each month to pay for essentials like food then you are insolvent (sorry - not meant to sould harsh or anything - it took me a while to accept that I was insolvent).

    What you need to do is an SOA - this will list all of your priority expenditure (rent / mortgage, council tax, utilities, food etc), and then you will see how much you have left for debt repayments.

    Regarding the joint IVA thing, I am sure someone else will explain this for you!

    Good luck
  • althas
    althas Posts: 410 Forumite
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    I echo the sentiment about up front fees. NEVER pay anyone these.

    Also, as I recommend to anyone starting, visit www.iva.com

    They have a BIG list of IP's and companies offering IVA services, and a wealth of information and reviews by the clients on how they opperate, how good they are etc. Look on there and select a few, and call them all as a prospective client. See what they say, how you feel with them, ask questions and see how they respond. If you are accepted for an IVA, you will be dealing with these people for potentially six years. so you must be comfortable and happy with them

    The biggest tip I can give, is when you talk to the IP, be 100% open and honest with them. Do not try and hide anything or be coy about things. It takes a LOT of courage to admit the problem and seek help for it (I know!), so do it right. Feels good to get it all done
    There are 10 kinds of people that understand binary
    Those that do
    Those that dont
    :rotfl: :rotfl: :rotfl: :rotfl: :rotfl:
  • fatbelly
    fatbelly Posts: 20,659 Forumite
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    Barkley wrote: »
    "Not everyone with debts over £15,000 will be eligible.

    Not everyone with debts over £15,000 will have an IVA as the best way forward!

    Phone National Debtline
  • Barkley_2
    Barkley_2 Posts: 63 Forumite
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    Thankyou for the information. Now I know what insolvent is, yep, it's me. I will phone on Monday as I am out on the road with my job and I dont want to sky rocket my mobile bill.

    Will keep you updated. Again thanks.
  • Barkley_2
    Barkley_2 Posts: 63 Forumite
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    How are percentages worked out? What is the average % debt write off? Ive seen figures from 35% to 75%
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    It's not calculated in that direction - no-one can say to you "we'll write off XX% of your debt!"

    The IP calculates how much you can afford to pay over the course of the IVA and that results in a dividend for your creditors. That's the bottom line! The calculations are based on your income according to your payslips (or accounts if you're self employed) and expenditure which is part fact part guesswork.

    Example:
    if you had £25,000 of debt and could afford £250 per month
    you'd pay in 250 x 60 = £15,000 in five years
    minus costs of say £4,000 (£1,500 niminee fee, and £500 a year supervisors fee)
    that's £11,000 for your creditors... divide that by your total debt (11,000 / 25,000 = 0.44)
    Your dividend would be 44p in the £ for your creditors
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • Barkley_2
    Barkley_2 Posts: 63 Forumite
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    Thanks Charco for the example.

    I have spoke to an IP and they have been very helpful. With the fiqures I gave them, I can make an offer to my creditors and I will be paying about 42% less than I am now. So fingers crossed, everything will be ok.

    Again, thanks to all for the advice.
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