IVA or not IVA

Ramases

Hi all, I'm new here and looking for some advice.

I have £18k worth of debts over 2 loans, 2 credit cards and 2 OD's. I am really struggling to get by and have done for a while, everything is up to date but i simply cant carry on like i am, everything is going to come crashing down on me. I've done my figures with an IVA company and will be proposing to pay £250 a month for 60 months, which is a total of £15000 over the 5 year term, most of my debt is with Santander (whom i approached to have all of it rolled into 1 loan but they refused, even though it would of sorted me out no problem) What is the likelyhood of this being accepted? This is around 80p in the pound of debt i owe.

Thing is one of my loans finishes end of 2012 and will free up £155 a month, but i really cant carry on till then, I can't sleep, I'm panicking constantly that i can't pay for anything, literally all my money goes on essential bills and debts, I've even started to walk to work instead of paying for buses, but 6 mile round trip is a bit much. Is there any other option left open to me apart from the IVA?

Tixy

Hi

Have you had any advice from one of the debt advice charities? If not I would do that before you progress further with the company you are talking to. Eg have you considered if a free DMP might be an option for you or more suitable than an IVA? IMPORTANT - Where to seek professional impartial advice about your debts.

Ramases

Whats the difference between an IVA and a DMP? from quick reading they seem to be the same thing. I will look into a DMP as well before commiting.

Thanks Tixy.

Tixy

Not the same thing at all. Big differences. One is a legally binding form of insolvencey, the other an informal agreement with creditors. One costs thousands in fees the other you can do for free. One you pay back a proportion of your debt, the other you pay back the whole amount.

On a DMP, no creditors meeting, easier to reduce payments if there is a change in circumstances.

Both have postives and negatives. Obviously which might be most appropriate for you will depend on your circumstances. But really do seek some advice from a charity first to see that you are getting impartial advice about the best option for you. Don't just jump into an IVA lightly, especially not with the first company you speak to. Even if you decide an IVA is the best option for you, take some time to contact several different IPs before you make your decision who to use.

dorisday

Hi

if you dont have your own home and it seems you dont own a car then an IVA isnt for you its only for folks who want to protect something. An IVA is very binding and if at some stage you cant manage the payments you are back to square one also having lost all the money you paid into it.
I did this and lost £4500 it all went to the insolvency pract. I then went ahead and did a self admin. with my creditors myself, some of them liked it others didnt but I continued with it and all went with it in the end. It may seem a lot of hard work and stress but after all the nasty phone calls from debt collectors and the letters it was a doddle.
Im still paying some now even after 7 years (I had a lot of debt) but I also have managed to make full and final settlements for 10p in the £ so its coming down nicely and at least I can live again!!
If you need any help just ask.
Of course a dmp with one of the charities is also a good way to go but it takes it out of your hands as to where your money goes but has helped many people through a bad time.

Ramases

I've been onto the CCCS website and did the quick questionaire, it states i could afford to pay £265 a month for 5 years and 5 months - which is £15 a month more than i was proposing for the IVA and 5 months longer. Obviously i will be repaying the whole debt except for interest if the companies involved will suspend interest. This does seem like a better option and is free.

I've been told by a friend however that the DMP can be cancelled at any time by the creditors and that they can defaukt you just before the end of the dmp to scar your record for a further 6 years, in essence a total of 11 years of a bad credit record.

I do own a car Doris, sorry. Just dont use it as much to save on fuel.

Confused!!

danp100

hi,
i have just had my iva accepted and my creditors are only looking at getting around 14p per pound back, so if you can afford 250 a month you will have no problems at all i wouldnt have thought. if you can realistically only afford 200 a month i still think you would get accepted without any problems, hope that helps
good luck
dan

Tixy

Its usual for defaults to be added around 3 after starting a DMP. Whilst any creditor can choose whether or not to accept your DMP if you are using one of the charities and you/they can demonstrate that you are paying all you can afford then usually you will find that your creditors will accept your repayments (sometimes it takes a couple of months or so for them to stop asking for extra etc).

I'd talk to CCCS further and speak to them in person about the pros and cons of DMPs and IVAs, you should find they'll talk you through it all so you can make your decision. Once you choose either option if you are struggling to keep within the budget they propose you might want to post on the debt free wannabe section of the forum. Posters there are great at suggesting ways you can save money/get things cheaper by switching providers, shopping around etc.

One other possible option might be to post up a statement of affairs on the DFW board first, just in case there are enough changes you could make that you could actually manage to meet your repayments without any DMP or IVA (obviously this depends on what your repayments currently are and how much more than £265 they work out at a month).

Ramases

Can anyone recommend an IVA firm? are Payplan/debt free direct ok? been looking on IVA.com for reviews but so many of them!

dorisday

In an IVA if you cant keep up the payments in the 5 years they can make you bankrupt and drop you like a hot potato they are in it to make money! and the money you will have paid them (if you fail to make these payments) all goes to them doe their fees which are rather high.
Please if you are going with something like this go with the free charity ones.
If you have no house to protect an IVA is useless to you and you should have been told this. Why pay to protect something you havent got
Sometimes it pays to look at the bigger picture, I know the thoughts of having someone sort this all out for you seems great, but believe me if the time comes at some stage and you can no longer afford the £250 a month to are back to square one and have wasted your money. and still have the same amount of debt you had when you started.
Think very very carefully.

Tixy

If you decide on an IVA then certainly consider CCCSVA and talk to them about their proposals, in fact I would speak to them before you contact anyone else at this stage. If you decide on an IVA then as well as CCCSVA you might want to look on IVA.com. Melanie Giles is a name that frequently appears on these boards (in a positive way). Others might be able to give you their personal experience of different IPs and having been through the application process.

Do plenty of research if you decide on an IVA, make sure you consider the stability of your job/income/life and the long term effect of having had an IVA.