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Few quick IVA Questions

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If you enter into an IVA, do your payments into it always have to be on a monthly basis or is there any flexibility? E.g. if you are paid weekly, fortnightly or 4-Weekly (lunar monthly) can payments to the IVA be done in line with your pay dates?

Are payments done by direct debit or can they be done by standing order?

When people set up new bank accounts, why have I seen posts were people dare not making any payments online? They have to be manual payments using paying in slip? Prior to an IVA what could a creditor do if anything with regards any new account you have set up elsewhere if they know where funding or a payment has originated? I'm not sure I am missing something here or if it is just paranoia or people being precautious?

What would happen if you have the new pension thing about to start and also have a cycle2work scheme in place? Would they ask you to cancel those and could you not refuse?

I understand that in a DMP you can't have a car valued at more than £1000. Is this the same in an IVA or is it not affected?

Do you have frequent reviews and meetings during period of an IVA (5 years?/60 monthly payments?) If so how many do you have? What is the purpose of them and what is discussed? WHo attends? DO you have to attend or can someone else on your behalf?

Thanks,
John

Comments

  • Hi John,

    I have been in an IVA 4 months now, so I can only speak from my experience:

    Most IPs will take payment at whatever interval suits you, and payment is usually by Direct Debit.

    The whole thing about bank accounts is that if (and only if) your existing bank is one of your creditors, you will need to open another bank account with a non-linked bank prior to the IVA being set up. This is to avoid your bank 'setting off' - grabbing your funds from that account to pay their debt.

    Nothing stops you making online purchases (unless you open a basic bank account that only gives you a 'cash' card, not a 'debit' card.

    You would need to seek advice from your insolvency practioner regarding pension and cycle scheme.

    IVA places no restriction on the value of your car, the proviso being that it is a 'modest' vehicle. Not sure if there is a hard and fast rule on this: My IP said anything worth up to £6K should be OK. But I know other IVAers with new supermini cars worth a lot more than that, being OK as well (the argument being that they are more likely to last the 5-6 year term without too much in the way of repairs etc). That said, if you've got £30K worth of BMW on your driveway, you may be expected to sell it, buy a second hand Ford Focus, and pay the difference into the IVA.

    Usually, your IVA will be reviewed annually to check that you plan, based on your revised income/expenditure is still affordable, or to see if you can afford any more. The good news in this scenario is that you get to keep 50% of any net rise in income. So you become £100pm better off, your IVA payment goes up £50pm. Also the reviews are paperwork exercises - no attendance is usually required.

    Hope this helps.
  • Hi

    Sorry to hijack your thread John, I just wanted to say thank you to Uptomyneckinit for his advice, as I to am in the process of switching from a DMP to an IVA and all advice is welcome.
  • Hi John,

    Similar to UpToMyNeckInIt, I'm 3 months in and can only draw on my experience but agree with the above. What I'd add is, with StepChange (formally CCCS) we were offered 2 or 3 specific DD dates, ours being the 1st of each month to suit their DD cycle.

    I expect if your in a cycle2work scheme it'll get included in your income and expenditure. As for a new bike, my IP said it could be included in the £500 utilities allowance but I was a little suspect with that.

    If the cars financed it can depend how the car was financed and who with as some companies will force you to sell it, Ford I believe are bad for this. We've one car on HP and own the other, we've to keep the HP car till it's paid off before changing but could change the other if we wanted. Our HP car is worth about 8-10k depending where you look and the other is £500.

    Should be an annual review, be interesting to see how that goes as there seems to be varying experiences comments else where.

    Hope that adds a little more :)
    Roll on DFD, final payment 1st October 2017 :beer:
  • Hi Freshstart,

    I've followed your other posts, and wish you the best in getting your IVA arranged.

    I'm no expert, but hope that sharing my IVA experiences helps others.

    Let us know how it all goes.
  • Hi

    Thank you, my IP is in the process of preparing my offer. As soon as I hear from them I will let you know and probably have lots more questions for you ;)
  • john10001
    john10001 Posts: 129 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Hi John,

    I have been in an IVA 4 months now, so I can only speak from my experience:

    Most IPs will take payment at whatever interval suits you, and payment is usually by Direct Debit.

    The whole thing about bank accounts is that if (and only if) your existing bank is one of your creditors, you will need to open another bank account with a non-linked bank prior to the IVA being set up. This is to avoid your bank 'setting off' - grabbing your funds from that account to pay their debt.

    Nothing stops you making online purchases (unless you open a basic bank account that only gives you a 'cash' card, not a 'debit' card.

    You would need to seek advice from your insolvency practioner regarding pension and cycle scheme.

    IVA places no restriction on the value of your car, the proviso being that it is a 'modest' vehicle. Not sure if there is a hard and fast rule on this: My IP said anything worth up to £6K should be OK. But I know other IVAers with new supermini cars worth a lot more than that, being OK as well (the argument being that they are more likely to last the 5-6 year term without too much in the way of repairs etc). That said, if you've got £30K worth of BMW on your driveway, you may be expected to sell it, buy a second hand Ford Focus, and pay the difference into the IVA.

    Usually, your IVA will be reviewed annually to check that you plan, based on your revised income/expenditure is still affordable, or to see if you can afford any more. The good news in this scenario is that you get to keep 50% of any net rise in income. So you become £100pm better off, your IVA payment goes up £50pm. Also the reviews are paperwork exercises - no attendance is usually required.

    Hope this helps.


    Thanks for all the replies guys.

    My car is only worth around £2000 to £2500 but it costs a lot more in petrol, tax, insurance and repair costs as its not very reliable.

    I really hate direct debits with a passion as they have caused me no end of grief in the past due to being paid every four weeks and my bills usually on a monthly basis so get out of sync.

    Do you think I would be able to pay with standing orders to an IVA?

    Thanks,
    John
  • I paid my IVA via Standing Order. I started out with Blair Endersby (who passed it on to Grant Thornton after about 4 years). I didn't have to change to Direct Debit.

    HTH :)
    LBM July 2006. Debt free 01 Sept 12 .. :T
    Finally joined Slimming World: weight loss 33lbs...target achieved 51wks later 06.05.13 & still there :j
    Aim to be mortgage free in 2022. Jan 17 33250 Nov 17 27066 Mar 18 24498 Sep 18 20608 Nov 18 19250 Jan 19 17980 Mar 19 16455 May 19 15024 Nov 19 10488 Feb 20 8150 May 20 5783 Aug 20. 3305 Nov 20 859 Mortgage free, 02.12.2020
  • yes mine is by standing order too, I don't think they do them by direct debit anyway as you are supposed to be in control of the payments?
    Aug GC £63.23/£200, Total Savings £0
  • I purcahsed a pre paid card, load it with the amount and only use it for the iva payments. Makes it easy as I hate direct debits.
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