IVA Worries??

TinTin2004

Hi All..

Went to Citizens Advice about my debts and although they briefly discussed my options i.e DMP, BR and IVA... they seemed keen on the latter and even put me in touch with a reputable company.

When he rang the company whilst I was still in the room, he openly chatted with the 'local rep' as though it was his long lost sister!!

Despite this, we met face to face to discuss my options in more detail but it seemed the obvious route as I didn't want to go Bankrupt and wanted to see an end to my debts.

The paperwork arrived and sent in all the I&E forms, bank statements etc and a creditirs meeting has come and gone.
The thing is although the initial few months are at a lower figure (about the amount that was proposed to me during my intial face to face) they have asked for £50 per month more for the remainder of the term which was negotiated over 6 years not 5 as they said the amount of debt (£66k) was high.

I'm a little worried now having read on here about what restrictions I might face in our 'normal' life during the IVA.

I can appreciate that there has to be some hardship.. the trade off for having 60-70% of my debt written off after the IVA term finishes but I got the slightest feeling that I was 'guided' down this road and now I'm a little worried about being 'locked in'.

Is it possible to do a DMP paying a similar amount per month and then try a full and final settlement after a a few years if I should come into some money (family perhaps?)

Is it advisable to open a basic bank account now (if possible as IVA not set in stone yet) I have one with the Co-op but it has a £200 overdraft..?? Are they likely to want to close this down? What about debit cards? I've seen on here that some banks are more lenient than others?? Any ideas which ones?

I'm just a little concerned about the impartiality of the advice I was given and although I've spoken to National Debt Line, everyone seem to always leave the final decision with us..??

Is there any advice we can get that take all our personal circumstances into consideration and more importantly what our future plans (desires) are over the next 5-10 years to help us decide on the best road to take..???

Thanks in advance..

Depth_Charge

TinTin2004 wrote: »

Hi All..

Went to Citizens Advice about my debts and although they briefly discussed my options i.e DMP, BR and IVA... they seemed keen on the latter and even put me in touch with a reputable company.

When he rang the company whilst I was still in the room, he openly chatted with the 'local rep' as though it was his long lost sister!!

Despite this, we met face to face to discuss my options in more detail but it seemed the obvious route as I didn't want to go Bankrupt and wanted to see an end to my debts.

The paperwork arrived and sent in all the I&E forms, bank statements etc and a creditirs meeting has come and gone.
The thing is although the initial few months are at a lower figure (about the amount that was proposed to me during my intial face to face) they have asked for £50 per month more for the remainder of the term which was negotiated over 6 years not 5 as they said the amount of debt (£66k) was high.

I'm a little worried now having read on here about what restrictions I might face in our 'normal' life during the IVA.

I can appreciate that there has to be some hardship.. the trade off for having 60-70% of my debt written off after the IVA term finishes but I got the slightest feeling that I was 'guided' down this road and now I'm a little worried about being 'locked in'.

Is it possible to do a DMP paying a similar amount per month and then try a full and final settlement after a a few years if I should come into some money (family perhaps?)

Is it advisable to open a basic bank account now (if possible as IVA not set in stone yet) I have one with the Co-op but it has a £200 overdraft..?? Are they likely to want to close this down? What about debit cards? I've seen on here that some banks are more lenient than others?? Any ideas which ones?

I'm just a little concerned about the impartiality of the advice I was given and although I've spoken to National Debt Line, everyone seem to always leave the final decision with us..??

Is there any advice we can get that take all our personal circumstances into consideration and more importantly what our future plans (desires) are over the next 5-10 years to help us decide on the best road to take..???

Thanks in advance..

Hi

Interesting

CABs should always be independent and impartial and should go through all the options with your best interests at heart (of course Im sure they all do)

Can I ask why you dont wish to go down the bankruptcy route?

Also would it be possible to put up your Statement of Affairs as this might assist people in giving you further guidence?

PS - some say that individual CAB branches 'might' lets say differ 'a little' in their approach as far as IVAs and any potential referrals are concerned. Im one of them by the way and make no apologies for saying so.

Genuine best wishes

cattay

Good morning, I took out an IVA in feb 2008 with freeman Jones. I was asked to pay £240 per month . During the course of the 5year my circumstances changed , I asked to reduce my fee which they did but keep it as an arrear. keep informing them through my expenditure but it wont be change on their system and still insisted it an arrears. ?I have changed 3 relationship managers in the past 5years . In August 2012 my relationship then told me to stop making my payment for 3 month and she will discuss with the solvency practitioners and creditor for a final settlement by October she left the post and my new hell relationship manager said I had money that I could introduce . The money over the 3 month and family contribuion which was in a premium bond which are used to pay bill and only go through the premium bond hoping i will win one day they asked me to introduce which have been used . I maked a compliant and it took over a month for them to reply me yesterday that I had arrears of £5000 to pay over 18month even. which i couldnt afford I will told that if i had equity in my property it will be extended to 1 initially but i dont , but they want to get money out of me which i cant afford. I was so angry I cancelled my direct debit with them.please could someone advise me on how to get out of this. I would not introduce my worst enemy to freeman Jones.

cheesedoffwithdebt

HI-it doesn't sound right- or at least if the answer is right the way it has been handled hasn't made you confident of the outcome.
I will not add to what has already been said because I think that is the best next step for you but I would just pick up on the bank account thing.

Yes do set up a new account pdq- there is a rule about offset so don't open an account with anyone with whom you have debts- the Co-op overdraft will have to be added into the IVA.

Avoid HSBC and First Direct and I think Lloyds as well, none of them like customers with an IVA and if they sniff that out even when you've opened the account they may not want to have you with them.

Bearing in mind all the banks have made heinous errors of judgement at board level I do find these attitudes slightly hypocritical but there you go.

In an IVA there are limitations with your budget and as you say to some extent that is the trade off, but you should be able to afford food, and all of your basic living expenses. Keep posting though there are some very able people on the boards who can and will help.

Anondebtadvisor

If you have any doubts about the company you are using it is not too late to pull out and seek advice elsewhere!

What changes in your expenditure for them to increase the payments?

It seems strange that they are proposing over 6 years - surley if the creditors want an extention that should be their decision not the IPs?

Have a look at Co op, Nationwide or Yorkshire bank for a new account - if of course you dont owe them any money

TinTin2004

Thanks Depth Charge

Statement of Affairs? - If you mean our financial position, here goes?

Currently living with my partner in her house which is actually up for sale as her ex husband wants his share of equity. We're currently 'renting' the house (or covering the mortgage) but we live in fear of never ever getting another private rental if we go into an IVA or BR as it's more of a footprint than managing my debts with creditors myself I feel?

It's such a nice house and we want to try and stay here but raising the ex husbands share of the house has already proved difficult for our family members with equity release etc. I know it seems a bit backwards trying to raise money to hand over to someone else when I have debts but once this house sells from under our feet, I feel we'll find life very difficult (correct me if I'm wrong?)

My partner has some small manageble debts (£6k) on monthly payment plans agreed directly with creditors but as she has equity in her house (£20k?) we've kept her out of my IVA arrangements. My partner is also not working due to sickness.

Turns out the reduced lead in to IVA accounts for some council tax arrears but this will be paid off by next financial year (April 13) using the remaining 2 months. I have around 9 creitors all told with the biggest £51k owed to building society who repossessed my house when I relocated and therefore I was forced to rent it out when it wouldn't sell.

It was the creditors that insisted a 6 year term rather than 5 owing to the amount o/s and the fees I'm paying to IVA Co?

The creditors have agreed to the proposal put forward but it's for me now to decide if it's the right way to go?

I wouldn't be averse to BR but I'm worried about life after BR, particularly getting any future mortgage or private rent if we're forced to move from our house? Also I want to keep a bank account

I've recently been reading on here about StepChange which is a charity who could manage my IVA but without fees and the term could be reduced as more of my money goes into monthly payment?

I'm really not sure which way to go and feel I've not had enough advice to make the imformed decision but whichever one I choose, it's going to be hard either way??

FiatFan_2

Welcome along, here's my take on your points,

TinTin2004 wrote: »

Currently living with my partner in her house which is actually up for sale as her ex husband wants his share of equity. We're currently 'renting' the house (or covering the mortgage) but we live in fear of never ever getting another private rental if we go into an IVA or BR as it's more of a footprint than managing my debts with creditors myself I feel?

Private rental would i my experience only ask about BR, you wouldn't have to declare iva unless asked directly and good chance credit check wouldn't flag it up.

TinTin2004 wrote: »

My partner has some small manageble debts (£6k) on monthly payment plans agreed directly with creditors but as she has equity in her house (£20k?) we've kept her out of my IVA arrangements. My partner is also not working due to sickness.

Good chance that if you do a personal iva, the house sells and she clears her debts she'll have some extra to put to one side. I doubt that the difference could be used as a full and final settlement, but you could try

TinTin2004 wrote: »

I've recently been reading on here about StepChange which is a charity who could manage my IVA but without fees and the term could be reduced as more of my money goes into monthly payment?

Yes StepChange give free advice, but the iva itself does come with fees built but negotiable with the creditors

TinTin2004 wrote: »

I'm really not sure which way to go and feel I've not had enough advice to make the imformed decision but whichever one I choose, it's going to be hard either way??

The hardest thing would be doing nothing and being forced down a route you don't want. Being in a position to choose gives you a chance to do what you feel right :j

cheesedoffwithdebt

TinTin2004 wrote: »

Thanks Depth Charge

Statement of Affairs? - If you mean our financial position, here goes?

Currently living with my partner in her house which is actually up for sale as her ex husband wants his share of equity. We're currently 'renting' the house (or covering the mortgage) but we live in fear of never ever getting another private rental if we go into an IVA or BR as it's more of a footprint than managing my debts with creditors myself I feel?

It's such a nice house and we want to try and stay here but raising the ex husbands share of the house has already proved difficult for our family members with equity release etc. I know it seems a bit backwards trying to raise money to hand over to someone else when I have debts but once this house sells from under our feet, I feel we'll find life very difficult (correct me if I'm wrong?)

My partner has some small manageble debts (£6k) on monthly payment plans agreed directly with creditors but as she has equity in her house (£20k?) we've kept her out of my IVA arrangements. My partner is also not working due to sickness.

Turns out the reduced lead in to IVA accounts for some council tax arrears but this will be paid off by next financial year (April 13) using the remaining 2 months. I have around 9 creitors all told with the biggest £51k owed to building society who repossessed my house when I relocated and therefore I was forced to rent it out when it wouldn't sell.

It was the creditors that insisted a 6 year term rather than 5 owing to the amount o/s and the fees I'm paying to IVA Co?

The creditors have agreed to the proposal put forward but it's for me now to decide if it's the right way to go?

I wouldn't be averse to BR but I'm worried about life after BR, particularly getting any future mortgage or private rent if we're forced to move from our house? Also I want to keep a bank account

I've recently been reading on here about StepChange which is a charity who could manage my IVA but without fees and the term could be reduced as more of my money goes into monthly payment?

I'm really not sure which way to go and feel I've not had enough advice to make the imformed decision but whichever one I choose, it's going to be hard either way??

Just a point about the 6 year issue as I see someone has questioned that. The usual period of an IVA is 60 months, but it is hoped that equity in property will have increased and some settlement can be made through releasing some of that by a remortgage. If at the outset you don't own a house then they can set the IVA period for another year- so that is nothing untoward. At the end of the day they are agreeing to forfeit quite alot of your debt and from their point of view, given that they have a number of bad debts all the time, they have to be prudent in recovering as much as possible, it works both ways! (I am sure you realise that anyway)

TinTin2004

Hi All.. thanks for your replies -- really helping me...
Other thoughts though are...

Our overriding desire is to buy our own house.. If I've got to wait 6 years for my credit file to clean up then that's the worse case scenario?

I note on internet that there are mortgages for IVA people but the deposit is somehwere in the region of 50-60% with high interest rates??

By the time I'm all clear (6 years) I'll be 53 and probably too old to get any mortgage although 15% deposit is easier to find than 50-60%. I would probably need to out down 50-60% deposit to even be considered at that age?

Also can someone tell me if my 6 year stint starts from the date of the IVA starting or the date of my last default on my credit file??

I'm really looking for the fastest solution to clear my debts and get on the property ladder but not sure how BR will affect me getting any future mortgage... coupled with a repossession in the past?

Also there's talk on here of IVA looking to take equity from any house I may own in final year?? What is the amount they look to raise????

I also read that BR means I might have to pay something towards my debts for up to 3 years after judgement. How are payments calculated and is it on the same basis as IVA i.e. I&E and is it fixed or flexible according to how much I'm earning etc? What reviews are in place to check this etc..??

I've a big decision to make...????????

UpToMyNeckInIt

Hi TinTin,

Lots of good advice here already.

You are right to thoroughly research the best solution for you. DO NOT agree to an IVA, unless you are absolutely sure that it is the best way to go. Short of failing it and going BR, you won't be able to get out of it otherwise.

Concerned to hear the implication that your CAB seemed to have a cosy relationship with the IVA provider (Grant Thornton by any chance? They seem to be the preferred choice of Stepchange at the moment as well). If you want to go the IVA route, I recommend you have a chat with 2-3 other insovlency practitioners to see which you would feel most comfortable working with. (Contrary to popular belief, many do not charge up-front fees - as opposed to 'Debt Management' companies, that usually do).

As for future 'credit worthiness': Whatever option you choose, your credit record is stuffed for 6 Years (whether you go BR or enter an IVA, you are insolvent either way).

If you have a large debt, with few assets, then I would lean more towards going BR (providing you have no other barriers to this eg: clause in employment contracts etc). At least that way, your repayment period is over and done with after 3 Years (at least that's how I understand it, assuming you are working).

You would be wise to sort out a place to live first though as you say. You will almost certainly fail any credit check that a letting agent carries out once you appear on the insolvency register. That said, your expenditure will allow for paying rent etc. (certainly in an IVA, not sure about how it works with BR).

Good luck.

FiatFan_2

TinTin2004 wrote: »

Our overriding desire is to buy our own house.. If I've got to wait 6 years for my credit file to clean up then that's the worse case scenario?

By the time I'm all clear (6 years) I'll be 53 and probably too old to get any mortgage although 15% deposit is easier to find than 50-60%. I would probably need to out down 50-60% deposit to even be considered at that age?

Also can someone tell me if my 6 year stint starts from the date of the IVA starting or the date of my last default on my credit file??

the six years starts from the beginning of the iva. we went from a mortgaged property to rented initially for the duration of the iva, but now we think we'll just continue to rent afterward as we'd rather not hang a mortgage debt round our necks again

TinTin2004 wrote: »

I'm really looking for the fastest solution to clear my debts and get on the property ladder but not sure how BR will affect me getting any future mortgage... coupled with a repossession in the past?

not sure their is a quick fix, it's not too painful and you will have to make sacrifices, i.e. chances are you'll not get to accrue more debt with a mortgage. dependant on your current credit situation you may not get one now either

TinTin2004 wrote: »

Also there's talk on here of IVA looking to take equity from any house I may own in final year?? What is the amount they look to raise????

in month 54 the iva requires an owned house to be re-mortgage if there is any equity available, giving you a greater amount of debt after the iva is completed

TinTin2004 wrote: »

I've a big decision to make...????????

you certainly have