Have IVA rules changed?

scared-sick

I was just wondering if the IVA rules have changed and if so when? I was under the impression that you had to have a minimum of £200 disposable income to put into the IVA in order to be accepted. Is this not the case anymore?

Also could anyone give me any advice on good/bad points of an IVA?

I am currently in a DMP and have been for 6 months, however my current DFD is 2026! The thing is I know they say your circumstances can change and you could pay it off quicker but for me its only likly to get longer, with a significant change in about 5/6 years time.
I am due a review soon and I am going to ask about IVA but wondered if anyone had any words of wisdom for me first?

I think an IVA is a scary step to make as it is so much more official than a DMP, but 5 years to pay off seems so much more realistic than the rest of my life!!

Please help!!

Max_Maxwell

You can take up an IVA for less than £200pm. It's what percentage of the overall debt 5 or 6 years worth of payments will equate to that the creditors will be interested in.

You'll get mixed views and opinions on here about IVA vs DMP so you have totake your guide from the facts and figures and go from there.

For what it's worth, where an IVA trumps a DMP in simplistic terms isthat you have made a formal and legal agreement with your creditors for a fixedterm to repay only that you can afford. Assuming you don't default, thecreditor cannot bankrupt you or reneg on the agreement. Keep up the paymentsand you're debt free in 5-6 years.

A DMP usually still requires repayment of the entire debt, and often withinterest. It could take many years to repay and there is no binding obligationon the creditor to honour the agreement. They can withdraw the plan at any timeleaving you with no recourse, and you're back to square one.

Surely better to see the light at the end of the tunnel, however dim it mayseem at first...

Anondebtadvisor

Some IVA compnaies will propose IVAs for as little as £80 per month, so seek some advice from a few providers before you proceed

scared-sick

Max_Maxwell wrote: »

You can take up an IVA for less than £200pm. It's what percentage of the overall debt 5 or 6 years worth of payments will equate to that the creditors will be interested in.

You'll get mixed views and opinions on here about IVA vs DMP so you have totake your guide from the facts and figures and go from there.

For what it's worth, where an IVA trumps a DMP in simplistic terms isthat you have made a formal and legal agreement with your creditors for a fixedterm to repay only that you can afford. Assuming you don't default, thecreditor cannot bankrupt you or reneg on the agreement. Keep up the paymentsand you're debt free in 5-6 years.

A DMP usually still requires repayment of the entire debt, and often withinterest. It could take many years to repay and there is no binding obligationon the creditor to honour the agreement. They can withdraw the plan at any timeleaving you with no recourse, and you're back to square one.

Surely better to see the light at the end of the tunnel, however dim it mayseem at first...

Thanks for this reply it is very helpful.

The main appeal of the IVA route is indeed the light at the end of the tunnel. I just cannot cope with being on a dmp for the next 20 years.

If i go down the IVA route, do they use my dmp budget to work out the disposable income figure? I just ask because i am struggling a bit on the dmp but felt there was nothing i could do as if i reduce the dmp amount to make things more comfortable then it will take me even longer to clear. So as the IVA is so much more official, i need to make sure i can realistically cope with the amount for the whole term. Hope this makes sense.

scared-sick

Anondebtadvisor wrote: »

Some IVA compnaies will propose IVAs for as little as £80 per month, so seek some advice from a few providers before you proceed

Any idea how i find a list of providers?

Also apart from not paying fees upfront before theIVA is accepted, which i have read about, what else do i need to look for in a provider?
Is it just about the minimum amount they will accept?
Feel really unsure about it all as i feel if i get any of this wrong then i going to end up in a bigger mess than i am already.

Thanks for the reply.

Anondebtadvisor

It is not just about finding a company who will propose the lowest payment, you should seek advice from a few companies, type IVA forum into google and you will find a forum with some IVA companies and you can see the reviews on IPs.

I would avoid companies who charge an upfront fee and those who pass your case onto an insolvency practitioner for a fee.

Speak to 2 or 3 companies and get a feel for which one is right for you

scared-sick

Anondebtadvisor wrote: »

It is not just about finding a company who will propose the lowest payment, you should seek advice from a few companies, type IVA forum into google and you will find a forum with some IVA companies and you can see the reviews on IPs.

I would avoid companies who charge an upfront fee and those who pass your case onto an insolvency practitioner for a fee.

Speak to 2 or 3 companies and get a feel for which one is right for you

Thank you, i will try this.

One more question if you could answer for me please...do i have to send payslips to the Ip every month as i read something on here about that? And if my pay fluctuates a little bit each month due to not guaranteed overtime, do you have to pay the extra money into the IVA each month

Anondebtadvisor

It will really depend on the IP some only ask for them at the annual review however if you get overtime this will probably be dealt with under the 10% - 50% 50% rule - under the IVA protocol but not all companies use the IVA protocol so ask the question.

This means for example if you earn £1000 you will get to keep the 1st 10% of any overtime. so if you earn £250 in overtime you keep the 1st £100 with the remaining £150 being split 50/50 between yourself and the IVA.

So out of £250 overtime you would get to keep £175 with £75 being paid into the IVA

If the IVA is not IVA protocol you will need to ask how any overtime will be dealt with

scared-sick

Anondebtadvisor wrote: »

It will really depend on the IP some only ask for them at the annual review however if you get overtime this will probably be dealt with under the 10% - 50% 50% rule - under the IVA protocol but not all companies use the IVA protocol so ask the question.

This means for example if you earn £1000 you will get to keep the 1st 10% of any overtime. so if you earn £250 in overtime you keep the 1st £100 with the remaining £150 being split 50/50 between yourself and the IVA.

So out of £250 overtime you would get to keep £175 with £75 being paid into the IVA

If the IVA is not IVA protocol you will need to ask how any overtime will be dealt with

Again, very helpful, thank you so much!

MissyRedleaf

I spoke to National debtline who offer free and impartial advice on the best way forward to handle your debts. They spoke over the pros & cons of a DMP versus an IVA. Due to me being a homeowner, I didn't want the chance that my creditors could go back on the agreement of a DMP. I wanted the stability that an IVA gives. Just one thing I would stress, DO NOT pay anyone to set up an IVA for you. The National debtline gave me a couple of companies and I chose Payplan for my IVA. They have been brilliant and said they wanted a minimum of £100 disposable income to pay into an IVA monthly. I have heard other companies arranging less for an IVA payment but I don't know which companies.

Hope you find the right outcome for yourself.