few questions on iva, please help!

wibblewobble123

hi, thanks in advance for reading and all your answers! i am currently waiting for paperwork from payplan regarding an iva with my partner (£19k credit card debt, £10k overdraft debt, £10k loan) and just have a few questions that i cant find answered in the posts on the iva board (i have been reading it with much interest over the past few days!).
1. the loan i have has my mum as a guarantor, payplan have said that i cannot leave it off the iva plan even though my mum has offered to take full payments per month so it wont go into arrears. is this right? would another company be able to leave it off?
2. payplan have said that me and my partner have to go to a meeting beofre everything is finalised. is this right? did you all have to attend a meeting? i only ask as my partner is self employed so a day off is difficult, but obviously we will do this if necessary.
3. is our credit rating damaged forever?
4. my mortgage term is up in november, will i be able to get a mortgage if we are on the iva plan?
5. do you have to declare that you have been on an iva forever in application forms such as mortgage applicaiton etc?
6. is a dmp better? i realise debts will be paid off in an iva, but it just seems so scary! and will a dmp not ruin your credit rating so much?
thanks in advance again, you are all so helpful on this board!

judojub

Hi.
I am fairly new to this myself but did not want to read and run. Somebody will be along soon to help and advise you properly.

1) I think the loan will still be included because it is your name on the loan. (somebody will correct/verify that though.
2)I never had to attend a meeting and have not read many posts where people do. However, I do not know if this is different for self employed people. I simply had to make myself available to receive a phonecall at the time of my meeting. Most meetings are done by phone, email, fax etc.
3)If you are accepted into an IVA then your credit rating will be damaged for 6 years from the acceptance date.
4)It is most unlikely you will be able to remortgage and most companies will probably not allow another fixed rate term.
5)Not sure about this one. I guess honesty is the best policy, however if it has dropped off your credit file then I am not sure.
6) DMPs are a good solution for some. Please bear in mind they are an informal agreement. Creditors are not obliged to freeze interest and charges. You could be paying your debts via a DMP for many years to come. An IVA is a legally binding contract between debtor and creditor. If an IVA is accepted then creditors can not charge interest etc. It gives you more peace of mind i guess.

Ultimately it has to be what you feel comfortable with. As I said though, I am still a newbie and if you hang around somebody with more experience will be along to advise. Hang in there!

FoggyBrain_2

Hello and welcome; I will answer as best I can:
1) All unsecured loans have to be included. This will be the case with all IP's as it is a requirement of the IVA.
2) Self employed applicants are required to have a face to face meeting with the IP. PAYE mortlas can get away with a telephone interview, but self employment is slightly more complicated, but not a problem with an IP used to self employed clients.
3) Your credit rating will be shot for 6 years from the date of acceptance of the IVA (or until the IVA is completed if this is longer. After that you will have to rebuild a clean history (no history will be as bad as a dodgy history).
4) Very unlikely you will be able to get a new mortgage -- however, do you mean your current fixed rate ? In which case you will just revert back to your lenders variable rate.
5) If a form asks if you have ever been in an IVA or made an arrangement with your creditors, then you should answer yes. If it asks have you ever been made bankcrupt, then you can honestly reply no.
6) It is debateable as to the damage a DMP will do to your credit rating ---- with every lender able to register regular defaults it will be pretty much shot anyway! DMP's are suitable in some circumstances, usually over a shoter term to give breathing space. They are informal and creditors can ( and some do) still run up interest charges and pursue you for the debt. Creditors also sell on bad debt to debt collection companies who might not be interested in complying with the DMP. Also --- especially if any interest is still running a DMP can take decades!

Might I suggest you pop over to https://www.iva.com, where you will find a list of IP companies, with reviews. It won't do any harm to have a chat with a couple to compare advice.

judojub

Great answers from Foggy! I didn't do too bad!
Best of luck wibblewobble,

wibblewobble123

thanks so much for all your help, it really is appreciated. i keep thinking that i will definitely do the iva, then i have a wobble and think of something else that could go wrong and worry if i am doing the right thing, but i suppose that is the way everyone is at first.
with regards to the mortgage, my fixed term is up at the end of this year, and as this is my first mortgage, i am not sure how it works? will i just revert to their normal rate? and if so, wont that be even more of a worry if interest rates go shooting up and i cant afford it??
thanks again

FoggyBrain_2

Not too bad at all judo :-)

FoggyBrain_2

Wibblewobble. Yes, you are likely to revert to normal rate (which currently is lower than most fixed rates). Any future increase will be dealt with by adjusting your I&E with your IP.

Have a chat with a couple of other companies to see if they can calm your wibbling ( or wobbling). This is a 5 year commitment, so you need to be comfortable with the company you go with. However, if you stick with Payplan you will be OK.

judojub

Hi. It is a worry. Yes, I would imagine you would just revert to their normal/standard variable rate. I think this is a common problem right now and hopefully IPs will be sympathetic!