IVA - What is the catch?

mufc689908

Assuming you have no equity in your house but a load of unsecured debt.

You pay back roughly 25% in total of what you owe over 5 years and in that time your credit rating has gone to sh*t and you cant borrow any more .

In year 4 although looking very unlikely in the current climate your house hasnt jumped hugely in value.

Am I missing something or is the rest of country missing out on a very easy way out?

Charco_2

Its certainly not "an easy way out" but if you're in a rut it is a better alternative than living hand to mouth and constantly serving the banks like some sort of Jabba the Hut.

You wont repay 25%, you'll repay as much as you can afford based on calculations of your household income and reasonable monthly outgoings. It does require the agreement of most of your creditors.

cootambear

Yes but if you like your home then you get to continue living in it. If you rent then that is dead money, whereas you can pay the mortgage which reduces the debt on your home, prices may fall but barring big rises in interest rates - the Libversitives may be stupid enough to push us into recession with their anti growth policies, but perhaps not stupid enough to create a 15 year economic slump, (I hope) - the fall in house value should be matched by the fall in your mortgage debt.

I hope. My crystal ball tells me that the stagnation in house prices should end in five to seven years as cheaper mortgages become available again and house prices start to become affordable in terms of wages/mortgage cost ratios.

Then in about ten years time when everyone has forgotten the banker induced economic crisis, house prices will shoot up as the merrygoround starts its cycle again.

mufc689908

Charco wrote: »

Its certainly not "an easy way out" but if you're in a rut it is a better alternative than living hand to mouth and constantly serving the banks like some sort of Jabba the Hut.

You wont repay 25%, you'll repay as much as you can afford based on calculations of your household income and reasonable monthly outgoings. It does require the agreement of most of your creditors.

Surely anyone with sense would massage the figures to suit this.

Anyone know of anybody ever paying less than 25% and if so what is the record?

Charco_2

Historically it used to be very low, trust deeds (Scotlands equivalent) still does about 10p.

Creditors over the years have demanded more and more so 25p would be a minimum but they were forced to look at their criteria so that has fallen off a little again.

One off lump sum IVAs can happen for less too.

The legislation is not there to help people avoid debts though, it's to offer a second chance when things go wrong. You'll pay back what you can afford for five years, not 25% or 35% or 10%

nogoodwithdosh

Why would anyone in their right mind run up debts just to get an IVA?

Who could honestly just do it in the hope that they might gain something financially?

Who would want that gut wrenching feeling that you carry around with you from morning till night.You wake up in the morning with that horrid knotted feeling in your stomach,you go all through the day with it still there and never leaving your mind.You try and get off to sleep but it keeps you awake, then when you finally get soooo tired that you do sleep, you go and dream about it.
You can't eat, well not a full meal anyway as you feel sick.You feel ashamed and you hope no one will guess.You hide the secret from your family,especially your kids. It is the worst feeling in the world, and you can't shake it off. And worst of all you look around you , and you don't see that 32 inch flat screen tv or that flash car on the drive and you wonder where all the money went.What was it spent on?

I don't think anyone would intentionally do this to themselves

debtinfo

As charco says you pay the most you can afford, The creditors vote on this so they dont have to accept your figures they will push to get the most, Also consider this, you pay for 2 1/2 years and then lose your job, the IVA fails you find you have mostly paid fees and with the interst you are nearly back to where you started or worse with a ruined credit record or worse still the IVA supervisor may have the power to make you bankrupt, so not something to be taken lightly. You shoud only start an IVA if you trully are inslovent and can be confident of fulfilling the full term and living on a restricted budget throughout

mufc689908

debtinfo wrote: »

As charco says you pay the most you can afford, The creditors vote on this so they dont have to accept your figures they will push to get the most, Also consider this, you pay for 2 1/2 years and then lose your job, the IVA fails you find you have mostly paid fees and with the interst you are nearly back to where you started or worse with a ruined credit record or worse still the IVA supervisor may have the power to make you bankrupt, so not something to be taken lightly. You shoud only start an IVA if you trully are inslovent and can be confident of fulfilling the full term and living on a restricted budget throughout

In the current economic climate you can guarantee your, infact any job in both the public and private sector? mmmm......

Can I have next weeks Lottery numbers?

What if you`re self employed:)

mufc689908

nogoodwithdosh wrote: »

Why would anyone in their right mind run up debts just to get an IVA?

Who could honestly just do it in the hope that they might gain something financially?

Who would want that gut wrenching feeling that you carry around with you from morning till night.You wake up in the morning with that horrid knotted feeling in your stomach,you go all through the day with it still there and never leaving your mind.You try and get off to sleep but it keeps you awake, then when you finally get soooo tired that you do sleep, you go and dream about it.
You can't eat, well not a full meal anyway as you feel sick.You feel ashamed and you hope no one will guess.You hide the secret from your family,especially your kids. It is the worst feeling in the world, and you can't shake it off. And worst of all you look around you , and you don't see that 32 inch flat screen tv or that flash car on the drive and you wonder where all the money went.What was it spent on?

I don't think anyone would intentionally do this to themselves

I didnt in any way suggest or even hint at this.

You twit:D

nogoodwithdosh

Sorry got my head on the wrong way, because of all the turmoil that I explained
sorry

cootambear

nogoodwithdosh wrote: »

Why would anyone in their right mind run up debts just to get an IVA?

Who could honestly just do it in the hope that they might gain something financially?

Who would want that gut wrenching feeling that you carry around with you from morning till night.You wake up in the morning with that horrid knotted feeling in your stomach,you go all through the day with it still there and never leaving your mind.You try and get off to sleep but it keeps you awake, then when you finally get soooo tired that you do sleep, you go and dream about it.
You can't eat, well not a full meal anyway as you feel sick.You feel ashamed and you hope no one will guess.You hide the secret from your family,especially your kids. It is the worst feeling in the world, and you can't shake it off. And worst of all you look around you , and you don't see that 32 inch flat screen tv or that flash car on the drive and you wonder where all the money went.What was it spent on?

I don't think anyone would intentionally do this to themselves

I`m going through it myself and its bad. But they cant throw you in a debtors prison or hang you.