Iva or debt management?

Redpepper10

Hi ,

I'm just after some advice.

My wife and I have 7k of unsecured debt - coupled in with childcare and car repairs , the monthly repayments are crippling us.

We have no assets other than a car we rely on for work.

We have sought advice from step change and have been advised that an IVA is the best way forward. However, I'm worried about how this will affect our ability to rent houses. (We have no mortgage).

The IVA would be £160 per month over 5yrs. However, I've worked out if we pay £160 per month on debt management for 5yrs, we could have the debt cleared - provided the companies freeze interest.

This seems like a more realistic, less drastic option.

Can anyone advise please ?

Anondebtadvisor

Although i understand that people do IVAs for debts as low as yours are you sure you dont meet the DRO criteria? Do you really have £160 per month to pay towards your debts??

If you can pay £160 towards the debts, your debts would be cleared in 43 months? I dont think creditors would accept an IVA when you can cleear the debt in 3 years and 6 months

milliemonster

I am surprised that Stepchange have suggested an IVA as the best solution, really they shouldnt be telling anyone what their 'best' solution is for them and should only be offering impartial advice and information on the options available and allowing you to make up your own minds!

However, it is unlikely on that level of debt and the fact you would have it cleared within less than 5 years that your creditors would approve an IVA anyway, shoddy advice from them to be honest.

If you are struggling with your payments I would look at a DMP for the time being.

FiatFan_2

Some good advice above, have you called the other free advice services to get their opinion on your circumstances?

As above, I'd have thought a DMP or DRO would have been more appropriate given the information in your post.

Redpepper10

Hi sorry my wife got confused as to who recommended the iva ! We've contacted various debt lines and have opted for debt management

UpToMyNeckInIt

Redpepper,

Based on the limited information, I totally agree that a DMP is the way forward for you.

Would love to know which company suggested an IVA for a £7K debt! (Particularly where your disposable income has worked out around £160pcm).

That is quite rediculous, and I cannot see any situation where entering an IVA for a relatively low amount as this benefits anyone other than the IVA company.

Glad you did not commit to this.

Anondebtadvisor

I agree, i think you have made the right decision :-)

Who did recommend an IVA to you?