Iva help

em12

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My partner and myself thought we were facing bankruptcy but after having a meeting with the citizens advice yesterday they advised us that as we have a property and £100 surplace income a month an IVA would be the best route. Our debts are £38k and she advised us we could pay back the £100 per month for 4 years and that after 4 years they would look to see if we could release some equity out of the house but as we probably wouldnt be able to as at 100% ltv the IVA would just end at that point.
I have since come home and look at IVA's in more detail and from what i have read they seem to be for 5 years and you have to pay at least £200 per month or 20p for each £1 you owe. I have also read that if you cannot release equity after 5 years they will continue the IVA for a further 12 months.
Can anyone clarify which is right. I was quite upbeat after the meeting with Citizens Advice but after reading different things on the internet its starting to worry me again!

FoggyBrain_2

Hi. Your CAB advisor is a little off target. An IVA typically runs for 5 years. Some creditors, noteably Northern Rock ask for it to run for 6. Each month you will pay into the IVA what has been worked out as your disposable income (whats left after essential bills and allowances for running the car, food, emergencies, etc. have been paid). This would need to be re-calculated by someone who knows what they are doing!

With regard to equity: In year 4 you will be asked to attempt to re-mortgage to realease the equity. At the moment ( and in the forseeable future) it will be impossible for anyone in an IVA to re-mortgage, so a 12 month extension at whatever the monthly payment is then will be added.

Please visit https://www.iva.com for a list of recommended companies, with reviews. Have a word with a couple of firms ( it's free). Also pop over to their sister site at iva.co.uk for a chat, where many IPs post and advise.

debtinfo

£100pm is quite low BUT there is no lower limit on IVA's it is all down to what the creditors would be prepared to accept so although i is low you might be able to get it pushed though, as foggy says nce you start talking to IP's (speak to a few) you will get an idea from them as to what they think your chances of getting it accepted are.

BTW what is the value of the house and the mortgage

em12

we have a £25k teco loan - £410 monthly repayment, 9K Coop loan - £170 repayment, LLoyds overdraft £3k and Sainsburys credit card £1200. Do you think £100-£150 would be too little to divide between them. I am just worried we are stretching ourselves with £150 and if cost of living goes up over the next few years i dont want to be at risk of the IVA failing. We have childcare now and my husband had paycut at work thats why we are in this mess. Our mortgage is £114k we brought it for £114950 at one time we thought it might be worth £120k but looks like they have been selling in our area around £102 -£110k.

FoggyBrain_2

Have a look at beatmydebt.com where they have a useful Living Expenses guide. And work out your budget. There have been IVA's agreed at this sort of level. It largely depends on the levels the IP will consider is cost effevtive for the firm as well as the creditors themselves. I am pretty sure there are a few posters on iva.co.uk who pay this sort of amount.