Is an IVA the way out?

TwistedPsycho

Morning,

THought I would pop over from trawling the competitions boards for a quick question.

Over the last few days I have started discussions with PayPlan about sorting out my debts. At the moment I have around £500 disposible income a month, but it is all going to clear my £26,000 of debt (Not including a mortgage - We are covering that okay)

As these are my personal unsecured debts and my partner hardly earns much anyway, I am sorting this based on my own money... so my figures are:

Income 1450

Disposible Income 494ish
Creditor Payments 526ish (on £26k - 5 creditors - 1 loan 3 C/C 1 Overdraft)

Now the advisor that went through the figures with me on the phone kept commenting about IVA's although obviously there are a few options. I have heard various comments about them over the last few weeks anyway while I have been thinking about it ranging from "You'll be lucky to get credit again" to "Give it a few years after you have finished paying and you should be okay".

With all reality, I expect that they will offer me a debt management program paying it all off for the rest of my life, but I would appreciate any views on what would be. As a head start I am making my way down to town in a bit to open a basic bank account just in case.

Thanks in advance for anything you can offer in my ear.

TP

chevalier

Hi there
Have a look at https://www.whatsthecost.co.uk to see what your debt free date is now if you don't restructure your debt (which is what a DMP effectively is). You may be surprised how much closer it is than you realise. Then play around with only paying min repayments on the lower APR cards and paying off as much as poss each month off the highest APR debt. There should be quite a difference.

Then you need to look at your current budget. If you post an statement of affairs on here (see southernscousers sticky at the top of the forum), it might help us to spot cut backs to further boost what you can repay each month.

As for an IVA the main thing is that this is a formal agreement. If you default on it then any of your creditors can petition for your bankrupty. So it is not to be undertaken lightly. A DMP is a voluntary agreement, so is less strict.

best of luck
chev

lynzpower

from what I can tell are you only about 30 quid short in order to continue to pay your debts off without the IVA. Do bear in mind there are costs for IVas.

If you are only short by 30 quid, chances are we will be able to find this in your budget somewhere.

Could you post up your SOA adn we can have a look to see if theres any case we can save you?

lonely_2

the costs for an IVA would come of the £500 spare you have. in terms of how your credit would be affected, neither an IVA or debt management plan is good for your score but both are on there for 6 years (sometimes the DMP may take longer to clear as the default is not put on it straight away). so look at it from a purely financial perspective - which will allow you to clear your debts quicker - not from an emotional one based on the misinformation on IVAs

gemsaysdontdodebtkids

I'm scared of IVAs, as my contract for my flat said I wasn't to have one! I'm in a debt management plan and so far it's been ok. Still at the waiting for creditors to accept stage though, I think that's all pushed through quicker with an IVA.

TwistedPsycho

Well PayPlan have contacted me back. They are suggesting a DMP of £330 a month. Obviously this would give me a little bit to play around with as apparently I did not budget for maintainance, enough for food etc (ooops I was trying to be honest).

This means I would pay off the debt in 6 years and 1 month, with all interest frozen. The biggest payment, my loan still has 5 years on it so I am happier doing that than stuggling, getting stressed etc, and I must have been over conservative because I take more money out on my "mule" Egg card than £30 a month that one of you fine people commented on..

Thank you for all your advice. I have actually printed it all off to read in conjunction with all the other paperwork I have on the desk relating to this mess....

EDIT

I have been on that website that Cavalier has suggested. Looking at the figures though it would mean that I would be paying off less than the minimum amount until 2011, which would probably end me up in claims courts or with bailiffs heading up to the door.

I will try and get some more time later to put an SOA on. But thank you everyone again.

TP