really scared about starting an IVA

susieanne

I have been doing my own DMP for about 5 years now everything settled down in year one all creditors accepted my really low payments and i bearly hear from any of my creditors .

So i could just go along as i am , all my debts have been sold onto third partys , i cant see any end to paying off my debts infact i bet i owe the same now as i did 5 years ago .

It has been put to me in the past that i would be better doing an IVA knowing very little about IVA and also feeling quite happy that i no longer have letters & phone calls from my creditors i dismissed it

Now after looking into an IVA for myself ive deceided to fill the forms in to start a IVA and im petrified at sending them off .
I have prob about 5 grand in equety in the house and my car is worth about £1000 so why im i so scared ?

Just wondered from other people who are well into there 5 year IVA are you happy or do you regret entering an IVA

Just another quick question i have 12 creditors and the companys who is helping me arrange the IVA is looking at me paying £120 per month so £120 divided by 12 creditors are my creditors likely to accept my IVA ?

Anondebtadvisor

Any good IVA company will fully explain the equity release provisions to you and how any assets are dealt with in your IVA. Make sure you fully understand so you dont get any nasty suprises further down the line.

Your car will usually be an excluded asset but double check with your Insolvency Practitioner. Have you spoken to an IP?

How much debt do you have in total?

susieanne

Thankyou yes i have spoken to them its them who made me think about an IVA would be a better choice for me .
They explained about creditors could try and make me remorgaged in the last year of an IVA but they said it would be fine for me because i have very little equaty in the house also it would be very unlikely that my morgage company would let me remorgaged because of my credit history .
I owe approx £26000

Anondebtadvisor

That doesnt seem a very thorough explanation. Make sure you fully understand and ask if your IVA is protocol compliant as they can then tell you what will be expected from you in terms of equity - If not you could end up doing a 6year IVA!

Which company are you using? You will pay back about 15/16p in the £ based on these figures which if it is your best offer, is in the best interest of your creditors to accept

patchy987

Just wanted to share with you from first hand experience, we were very unsure about entering our iva back in 2006 but once we started it we counted the months through and it was great to see a light,

after 6 years of an iva (added time due to problems early on) we finally made our last payment a few weeks ago and I can't even put into words how amazing it feels to be debt free.

It really is worth thinking about as you do get an end date to the debts whereas with a dmp you would be paying it a lot longer, but of course this is just my opinion and you must do what's right for you .

susieanne

Thankyou very much for sharing your experience , i bet you feel a massive relief now . Its only been recently that the thought of my DMP having no end date or it would probely take me 30 years to pay off my debts thats what terrifies me ive been waking up at night worrying .
5 years of a IVA will go so quick because the last 10 years that i have been in debt have .

Can i ask whether you was made to remorgage when you was in the final year of your IVA ? and did you have any equety in your house ?

patchy987

You are so right it is a massive relief now
It was hard work but definitely worth it

As for remortgaging, when our iva was started property prices were on the rise and it was written into the iva that we would remortgage at the end and pay 10k into our plan. When the time came our house price had fallen and we would only have raised about 3k after fees etc so we had a variation meeting called and it was agreed that we would not have to remortgage at all.

I know every case is different so I guess it depends how much equity is there

Hope this helps

Anondebtadvisor

Often if you are unable to release the equity you will be required to pay an additional 12 months into your IVA in leiu of equity, so a 6year IVA instead of 5yrs.

Again check this with your IVA company, all the best and have a happy christmas :-)

UpToMyNeckInIt

susieanne wrote: »

I have been doing my own DMP for about 5 years now everything settled down in year one all creditors accepted my really low payments and i bearly hear from any of my creditors .

So i could just go along as i am , all my debts have been sold onto third partys , i cant see any end to paying off my debts infact i bet i owe the same now as i did 5 years ago .

It has been put to me in the past that i would be better doing an IVA knowing very little about IVA and also feeling quite happy that i no longer have letters & phone calls from my creditors i dismissed it

Now after looking into an IVA for myself ive deceided to fill the forms in to start a IVA and im petrified at sending them off .
I have prob about 5 grand in equety in the house and my car is worth about £1000 so why im i so scared ?

Just wondered from other people who are well into there 5 year IVA are you happy or do you regret entering an IVA

Just another quick question i have 12 creditors and the companys who is helping me arrange the IVA is looking at me paying £120 per month so £120 divided by 12 creditors are my creditors likely to accept my IVA ?

This is purely my opinion, speaking as an IVA customer:

I am so sorry to hear of your situation. Sadly this is the problem with DMPs. It seems creditors can and do, move the goalposts. This forum is littered with posts such as yours. Mind you, there are a fair few people struggling with IVA's as well, so please do your homework to ensure it really is the best option for you (sounds like your DMP is going to take half a lifetime, so an IVA might be better).

I only went down the IVA route as I had no real option after an unexpected change in financial circumstances.

Check out the forum at: www . iva . co . uk. Loads of really helpful info. On IVAs there as well.

By all means seek advice from the ‘charity’ organisations, but don’t be afraid to approach a private firm if they don't think you are eligible for an IVA.

Go to www . iva . com, and contact a couple of well-reviewed Insolvency Practitioners. Many don't charge you anything, and their fees would be paid out of your monthly IVA payment (and agreed by your creditors).

I have a cynical view of the so-called 'independent' charities (Stepchange, National Debtline etc…) - they are all sponsored/funded by the banks/credit companies, and I can't help feeling that was who’s interests they were looking out for when they advised me. They tried pushing me towards a debt management plan (would have taken 10 years to pay off my debt + loads of interest).

Saying all that, I am sure that some private firms will ‘over-sell’ IVA’s to people for whom it may not be the best solution.

The following link to Stepchange, gives a brief ‘iva pros & cons’ guide though which is a useful starting point:

http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Individualvoluntaryarrangement/IVAprosandcons.aspx

Below is a link to the Straightforward Consumer IVA protocol which the vast majority of new IVAs are compliant with, much of which will form the basis, word-for-word of you IVA agreement:

http://www.cleardebt.co.uk/media/303...20protocol.pdf

You will have to work out your income and expenditure. Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the CCCS Budget Guidelines Report 2011. Download a copy here:

http://www.insolvency-practitioners....AL%20DRAFT.pdf

I believe these were effective from October 2011, and used in my IVA implemented in August 2012. They may therefore still be current.

It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc if so required.

If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure and subsequently have difficulty. As for stopping creditor payments: best take the advice of your IP.

Equity release (if applicable): Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage / secured loan up to 85% LTV to increase creditor dividend up to 100p in the £. (Subject to the resulting payment being max. 50% of you current IVA payment for affordability reasons). For most, equity release is not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper). But who knows what the economic climate will be like in 4-5 Years time? Doubt it will have improved sufficiently for you to release equity (which is no bad thing).

Most IP's reckon on a 96-99% IVA-acceptance rate. After all they don't want to go to the time/effort in putting together an IVA proposal, unless they are reasonably certain of creditor approval (they don't get paid otherwise).

Glad I went the IVA route in the end - can now sleep at night, Hope you get back on track financially soon as well.

Just my opinion though.

National_Debtline

I have a cynical view of the so-called 'independent' charities (Stepchange, National Debtline etc…) - they are all sponsored/funded by the banks/credit companies, and I can't help feeling that was who’s interests they were looking out for when they advised me. They tried pushing me towards a debt management plan (would have taken 10 years to pay off my debt + loads of interest).

Hello there.

National Debtline has been helping members of the public with their debts for over twenty years. We have, and always will, ensure that our clients' interests are at the heart of the advice we give them. Our funding model includes receiving income from both the private sector and govenment - which allows our service to be provided for free. It doesn't mean that we have any obligation to work 'on behalf' of the credit industry. What's important is that an individual is provided with 'holistic' advice, so that are fully aware of every option available to them. Our clients can then choose the option which is best suited for their needs. Hope this makes sense!

We've written a fact sheet covering the basics of IVAs, you can find it here:

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

Hope you find it useful!

Best wishes,

David @ NDL.

GD2_2

Personally, whilst I feel a little cynical about certain so called charities, I exclude CAB and National Debtline from that. I think they do a smashing job.

However, having read the link a little further, it does look as if a little clarification may be welcome here. For example, who exactly is on National Debtlines "panel" of IP's? Why does the guide seem to indicate that there are thresholds, or hurdles that have to be negotiated before an IVA can be proposed? For example, 20p in the £1, debt level of £15k or more, minimum payment of £200 or more. Are these laid down by the "panel" as qualifying criteria, because they certainly wouldn't be by the vast majority of IP's I know? Are ND, possibly inadvertently, discriminating against people that don't fall within those thresholds, or is it simply a case of updating the content? I did see the small disclaimer in there that indicates that IVA may be considered outside of these hurdles, but as they have been repeated twice on there that does seem a little unlikely to happen in practice.

I do like the fact that it mentioned fast track IVA's, but I would expand that to mention that if a case falls outside of OR remit, then an IVA can still be arranged, subject to creditor acceptance of course, to annul a BR without having to use the OR.