IVA Question

Jimbo_999

Looking at threads, I have been advised by payplan to consider an IVA for our 50k outstanding debts, worked out that we can afford £220 per month and the IVA will be over 5 years, possibly extended by 12 months??? (sound right?)

Obviously £220 over 5 is £13.2k and over 6 is £15.8k. Is this right that if accepted by my creditors this is all i would have to pay?

Also are these the final totals, i.e. if my circumstances changed later on and i could pay back more, or a lump sum at a later date, would that be the final amount owed?

Also, if i received say an inheritance, which may come to me, would i need to pay that towards the outstanding debt? Or is £220 over the term my full and final payment?

Confused!!! :eek:

Jimbo_999

Also,
How likely is it that ppl i owe the money to will accept this? At my current rate of payment it will take 19 years to clear my debts.

Is IVA my best option?

What are my debtors likely to do when I go to them with this IVA offer? Will they be reasonable or just go for bankruptcy?

greenbrucelee

An IVA lasts 5 years which what you pay for but you cant take credit for 6. I would say you need to clarify with payplan why you think you have to pay for 6 years.

I am an in an IVA and with payplan and my debts totalled 24k but I only have to pay back 13.5k.

If you recieve an inheritance it is called a windfall and as far as I am aware if it covers the total owed then you have to pay that into the IVA to pay it off but if it is less then what you owe it will all get swallowed up by the IVA but does not shorten the length of the IVA.

EDIT

It depends on how it goes if your creditors will accept. 75% of them must agree to the proposal for the IVA to be set. Most of my creditors never replied to the proposal and the ones that did accepted so the others had to be bound by the IVA and cant do anything about it.
I know that my mother has left me most of her money when she dies. The amount I will get will be less than what I owe for the IVA so it wil get swallowed up, so she is changing her will to give to my brother incase she dies whilst I am in the IVA then he will give it to me after my IVA is finished.

If you do a job where you get overtime you are allowed to keep the first 10% of your net pay the rest must be paid to the IP (payplan).

I pay 37% of what I owe which is a reasonable amount. I believe most creditors will accept anything over 25%

Jimbo_999

Thanks Bruce,

I occasionally get overtime, maybe 1 day in 3 months, but not my choice, my employers. No overtime to be had except for when the business requires it.

The £220 is less than 10% of our monthly income, but we simply dont have any more excess money as mortgage is £1000 pcm, and in negative equity by 10-15k.

Payplan mentioned that the IVA after the 5yr period could be extended by 12 months, but i will have to go back and ask why?

So i take it the only way you can pay off early is if you are paying off the full amount you owe?:)

greenbrucelee

I am not entirely sure whether it is the amount the creditors have agreed to or the amount you actually owe when all interest is stopped and the IVA is in place.

Somone with more knowledge will able to reply to that.

I am only 5 months into my IVA which was previously a dmp 5 months before that.

It's a long road and a hard struggle only having the bare essentials but I know once this is all over I will be debt free.

debtinfo

Basically, think of it like this, the whole debt that you owe remains until the end of the IVA. Over the period of the IVA you pay in as much as you can so for you that is £220pm at the moment. If you get extra money either in more pay or some sort of windfall then all or some of that will also be paid in as well depending on the terms of the Iva (which you should make sure you understand and read before signing), So if you keep on getting more money then the max you can pay is the full debt plus interest plus the IVA fees. The £220pm is a sort of mimimum give or take a small percentage, so if your income drasticaly reduced then the IVA could fail (about 1 in 3 do over their course).

Hope that helps, remember to do your research and feel free to ask any other questions

ciderwithrosie_2

We had a 55k debt and pay £470 a month, although some of this goes to our IP as they're not a non-profit one but have been brilliant, they were working with the CAB and recommended by them, I was managing my own DMP for a year before I consulted them, but couldn't keep the DMP up as one of my creditors (one of the lesser amounts too) refused to play ball.

The initial proposal from the IP was £400 but the creditors wanted £500+ at the meeting - the IP negotiated the £470 and we were OK with that. It get reviewed yearly, to see whether there have been any significant changes in income/outgoings. Not a lot's changed in that time, OH's wages have fluctuated a bit as to whether he's on nights or days but the IP has managed to keep repayments the same.

We're in our last year now and have not had anything mentioned about extending it by another year although some friends of ours with Bains & Ernst are doing theirs over 6 years. We're quite a straightforward case I suppose in that we have no assets - no mortgage and no car. I just hope we can get to this time next year without any major castastrophes and start putting it behind us.

debtinfo

its worth just noting that in terms of IVA's the none profit making ones do charge along the same structure as the profit making ones, after all there are costs and expenses to pay