Been advised to enter IVA but really worried

jones160312

I'm just looking for a bit of reassurance really about entering an IVA. I have been advised by Step Change that this would be the best option for me (although they did also say that i could go down the bankruptcy route). The IVA would be for £100 per month.

Are there any positive stories out there as all i see are the negative ones where they have failed?

I'm in the process of getting all the paperwork together but something is stopping me and to be honest i think its fear 5 years seems a long time and i can't see into the future.

Also one question- If i get a pay increase (either by a pay rise or overtime) how much is the split?

Vikipollard

I've just finished a 6-year IVA and it has at times been difficult. This is largely my fault as at no time did I try to up the allowances I had ~ I just cut back more (down brand challenge, walked to work etc). For me, though, it was the right choice, but I could have gone for bankruptcy as I didn't have property to protect (that's why it was 6 years not 5) ~ no one explained that to me, but hey, I didnt try to find out either. At the time, I was afraid that even though I wasnt ever on the mortgage, that the Receiver would somehow take the house off my husband.

The IVA gave me the piece of mind of all the creditor hassle stopping, and knowing I was paying back as much as I could afford. I ended up paying back slightly more than the original debt, but of course that was without the interest they would have charged if they could.

I've always given 50% of what extra pay I got, but many get to keep the first 10% of any extra then share the remaining 90% 50/50 with the IVA company. My payments started out at £208/month and were £364/month at the end of the six years. (I have stiletto shaped indents in my a** from kicking myself 72 times...)

Talk to a few companies (free ones that is) and see how you feel. At the end of the day it's a long term legal commitment ~ but bankruptcy may not be an option for you if your job precludes it.

Good luck

Depth_Charge

jones160312 wrote: »

I'm just looking for a bit of reassurance really about entering an IVA. I have been advised by Step Change that this would be the best option for me (although they did also say that i could go down the bankruptcy route). The IVA would be for £100 per month.

Are there any positive stories out there as all i see are the negative ones where they have failed?

I'm in the process of getting all the paperwork together but something is stopping me and to be honest i think its fear 5 years seems a long time and i can't see into the future.

Also one question- If i get a pay increase (either by a pay rise or overtime) how much is the split?

Hi

It is all about fully understanding your options including the pros and cons and basically what is the best solution for you.

If you dont mind me asking why are they saying that an IVA is the best option over bankruptcy.

Just going on the figure of £100 per month would suggest that your income is tight already.

The terms of the IVA would determine your question of pay rises and overtime

Could you put up further information on your overall circumstances including your SOA?

MSE thread below on IVA failure rates that you might find interesting

https://forums.moneysavingexpert.com/discussion/4353261

IVAs can be the right solution, but you have to be sure as 5 years is a very long time

Your choice at the end of the day.

Best Wishes

FiatFan_2

I'm sure we made the right choice entering an iva, our jobs precluded BR and a DMP would have taken a lifetime. Knowing that our debt is taken care of at an affordable level and when we can afford extra payments are made. We live comfortably on our allowances, but sometimes things can get tight, but we've not felt as pressured as we were when debt ridden.

The iva also allows flexibly that SC have proven they are approachable when needed. I spoke to them about unknown expenses with the car MOT, as our payment is 1st of each month, they agreed to move the payment to after the MOT just incase we haven't enough saved to pay the bill. SC advised that if the bill is greater than expected we can always tag the payment on the end if needed. Was reassuring that they offered this rather than having to fight for it.

Just be sure to carefully go through all your paperwork and ensure your happy with it all before you begin. Good Luck

jones160312

Depth_Charge wrote: »

Hi

It is all about fully understanding your options including the pros and cons and basically what is the best solution for you.

If you dont mind me asking why are they saying that an IVA is the best option over bankruptcy.

Just going on the figure of £100 per month would suggest that your income is tight already.

The terms of the IVA would determine your question of pay rises and overtime

Could you put up further information on your overall circumstances including your SOA?

MSE thread below on IVA failure rates that you might find interesting

https://forums.moneysavingexpert.com/discussion/4353261

IVAs can be the right solution, but you have to be sure as 5 years is a very long time

Your choice at the end of the day.

Best Wishes

I don't know why she suggested it, she said that after taking out the 'basics' i had £90 free per month and had to find another £10.

We have a 10 month old baby and the cost of bringing her up with an IVA hanging over my head really scares me. It would be in my name only as my husband has no debt.

We currently rent our house privately and unless we win the lotto we have no way of ever affording our own home. Our housing contract has no iva/bankruptcy restrictions neither does my work.

Our joint income is £2033- this is broke up with my hubby taking £866 per month Me- £700 and the rest in benifits (CTC and CB)

Our expenses are basic living costs, we have nothing extravigant down.

I have thought about bankruptcy as its a straight forward path and i'm a huge worrier.

One thing that puts me off bankruptcy is i'm not sure how it will effect renting when it comes to moving?

RuthnJasper

jones160312 wrote: »

I'm just looking for a bit of reassurance really about entering an IVA. I have been advised by Step Change that this would be the best option for me (although they did also say that i could go down the bankruptcy route). The IVA would be for £100 per month.

Are there any positive stories out there as all i see are the negative ones where they have failed?

I'm in the process of getting all the paperwork together but something is stopping me and to be honest i think its fear 5 years seems a long time and i can't see into the future.

Also one question- If i get a pay increase (either by a pay rise or overtime) how much is the split?

Jones - OK, an IVA isn't right for everyone, but I am in the last few months of mine now (finally) and I won't lie to you, it hasn't always been easy or pleasant but NOW, I can honestly say that it was the best thing I ever did.

Fear was what was stopping me for a very long time - no-one likes to 'fess up and admit that they need help from an external party - but, although five years SEEMS like a long time it DOES give you a fixed point when you will be debt-free to work towards.

Alternatively, look at it like this: the average UK human life-span at time of writing is just over 80 years (80.17, but we'll call it 80 for simplicity's sake). If an IVA lasts for 5 years, then it will only account for a mere 6% of your life. As averages work out, we probably spend more time in the bathroom...

In starker terms, if it's between an IVA now, or inevitable bankruptcy later, take the IVA - the fallout is less in the longer term.

With regard to any potential change in circumstances - I can only say: Be honest with your IVA provider. Once you're in the agreement it is in their best interests as well as yours to keep the IVA from failing. For example - I entered into my IVA whilst still living with my parents. After a couple of years I was lucky enough to be offered accommodation after being on the Housing Association waiting list for over 7 years; I was desperate (indeed, I had no option but) to take the place but there was no way I could afford it at the rate I was repaying my IVA. I was easily able to renegotiate my repayments to a level that was manageable with my new rent/Council Tax/utilities/etc. obligations and extended the IVA to 6, rather than 5, years.

Grasp the nettle and go for it IF you feel it's right for you (with a CAB recommended provider, not a company who charge you the Earth), be honest with the IVA provider AND (especially) yourself about what you can realistically afford each month - and you won't go far wrong.

I actually wanted to top myself when I realized how bad my finances genuinely were (after years of hiding bank statements and bills). Thankfully I had Jasper with me at the time. Here's a link back to how the "initiation" went for me on the day - http://jasper-thedogsblog.blogspot.co.uk/2008/10/saturday-28-july-2007.html - and here I still am!

Good luck to you Jones - please feel free to PM me via MSE or the blog - if you have any further IVA questions or concerns that you think I might be able to answer.

Best wishes whatever you decide to do. xx

National_Debtline

Depth_Charge wrote: »

Just going on the figure of £100 per month would suggest that your income is tight already.

IVAs can be the right solution, but you have to be sure as 5 years is a very long time

These are excellent points. If your income was to reduce the IVA may have the potential to fail which could put you back to square one, so to speak. Under bankruptcy you may pay a lower amount into your income payment agreement or nothing at all. It wouldn't fail. It's certainly worth considering whether or not you believe your circumstances to change within the next 5/6 years. An IVA can be a very useful and powerful mechanism indeed but their binding nature can make them tricky to modify.

Best wishes,

David @ NDL.

milliemonster

An iva will still give you the difficulty of moving to another rented place just as bankruptcy would, in the eyes of creditors, bankruptcy and Ivas are viewed the same, so if you want to rent with an agency that does a credit check you would still fail with an iva. Many people in an iva manage to rent another property with no issues but usually they end up renting privately or using a guarantor, or occasionally saving up and paying 6months rent in advance.

If this is the only reason you are preferring iva over bankruptcy then honestly? In your position I would choose bankruptcy, get it over with and start your life's afresh sooner.