What happens during an IVA?

john10001

What happens during an IVA, and is it better to just go through an IVA or to try and restructure your debts with a single larger loan at say a rate of 10% give or take a couple of percent over X amount of years in order to completely repay your debts?

Does an IVA have any detrimental effect on your credit score or anything else you can do and if so how long does that last for?

At what point do you believe someone should consider an IVA? How much percent less or more of their annual income (if any) would you believe that it would constitute serious financial trouble to warrant an IVA as opposed to trying instead to restructure your debts e.g. a load of credit cards now at standard rate of 20% (after expiry of zero rate) through one consolidated loan on a rate say 8 to 12% (if you're lucky?)?

Cheers,

John

National_Debtline

Hello there.

An IVA is an insolvency measure, as such it is likely to have a significant effect on your credit file which will last for six years. An IVA would normally be considered if it is not possible for someone to pay their debts as they fall due.

To consider your options you should at first consider completing a statement of account; this should allow you to work out how much money you might have available for your creditors once you have considered your essential outgoings such as housing costs, bills, food, travelling expenses, clothing and such like. If the money you are left with is not enough to pay your debts you may need to consider your options. An IVA is only one such option, you may wish to seek advice to ensure you are made aware of all potential options available.

Please note than an IVA shouldn't be entered into lightly, it is vital that you are made aware of all of the benefits AND drawbacks so that you can make an informed decision on what's right for you and your situation.

We've put together a fact sheet on IVAs, you can find it here:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=26_individual_voluntary_arrangements

Best wishes,

National Debtline.

Foxy-Stoat_3

IVA will stay with you for years past completion. All depends on your current financial situation and current interest rates, if you already have a mortgage with positive or negative equity, if you dont have or want a mortgage for 7-10 years.

You really need to do the sums, do an excel spreadsheet with your current debt with interest rates and carry out the calculations until you get zero debt, then add up the interest, just to make you cry. If it takes you more than 5 years to pay back then you need to at least talk to a debt adviser.

If you are still spending on your credit cards just to stay afloat then its IVA/BR/DMP time for sure.

I dont think another loan is the answer to consolidate other debt unless the only thing stopping you actually paying your debt is the huge interest rates.

Depth_Charge

john10001 wrote: »

What happens during an IVA, and is it better to just go through an IVA or to try and restructure your debts with a single larger loan at say a rate of 10% give or take a couple of percent over X amount of years in order to completely repay your debts?

Does an IVA have any detrimental effect on your credit score or anything else you can do and if so how long does that last for?

At what point do you believe someone should consider an IVA? How much percent less or more of their annual income (if any) would you believe that it would constitute serious financial trouble to warrant an IVA as opposed to trying instead to restructure your debts e.g. a load of credit cards now at standard rate of 20% (after expiry of zero rate) through one consolidated loan on a rate say 8 to 12% (if you're lucky?)?

Cheers,

John

Hi john

Might be worth having a look through the Citizens Advice & CCCS debt remedy information and resource tools below to give you some pointers on the pros & cons etc of IVAs and other options.

https://debtremedy.cccs.co.uk/start.aspx

http://mymoney.nedcab.org.uk/moneyadvice/

Gimpsdad

It also might be worth talking to a human being rather than an online solution that tells you what you can and can't do money wise.

You need to know what affects, or doesn't, your own situation, and a machine cannot do that. You need to know about, for example, charging orders etc, these machines do not do that for you.

Good luck in getting an appointment though.

Depth_Charge

Gimpsdad wrote: »

It also might be worth talking to a human being rather than an online solution that tells you what you can and can't do money wise.

You need to know what affects, or doesn't, your own situation, and a machine cannot do that. You need to know about, for example, charging orders etc, these machines do not do that for you.

Good luck in getting an appointment though.

Hi

Yes, always worth getting full advice from a human being as well if necessary (face to face can be a real help in some cases) and preferably from a free independent charity like CAB & CCCS with people who actually advise on all issues & options and not just the ones where they make a profit or 'earn' commission.

Also make sure that any other advisers actually fully understand debt advice and the basic OFT guidelines even.

One advantage the 'machines' Gimpsdad refers to....is they wont try to sell you an IVA (they are not programmed to do that:)

Another point worth noting is that these 'machines' and genuine charity agencies won't take any monies from PPI claims.

PS - think both of these 'machines' are Institute of Money Advisers Award winners too and some of the advisers involved with them are also IMA accredited in debt advice I believe.

You have to laugh I suppose.

Keep it coming Gimpsdad, I bet you really are doing the IVA industry a world of good in publicity, I bet some of them absolutely luv ya:)

Hey Gimpsdad, rumour has it that the FREE fast developing CAB 'machine' you refer to http://mymoney.nedcab.org.uk/moneyadvice/ has got them all a little worried - maybe they have good reason to be.

win123

Can anyone pse help and advise me re an IVA - I have a mortgage with my mother 106,000 and the house is worth about 130,000 I have unsecured debts of about 25k which I am currently on a DMP for - does anyone know if you have to sell your house with an IVA? I have no money left at the end of the month to live off once we pay the mortgage and dmp and bills - My mother is 66 and on disability and is worried that we will end u homeless any advice would be great please