Should we sign for an IVA? Please help!!!

Bantams

Hi. Me and my husband are in total about 30,000 in debt. We have been plodding away for years trying to gain control but the monthly payments are a real struggle now. He doesn't want to enter an IVA because he thinks a large amount of equity will be taken off us at the end of the term. I understand some will be. There is no equity in our house at the moment. Also I have a car with a balloon payment of about 4,000 that will be due in about 18 months so am mindful I won't be able to borrow to keep my car of which I run my business, I could not do without it. I really could do with some sound advice because at the moment there is no light at the end of the tunnel. I have been in touch with a company about an IVA and they said they could help me. How do I know they are a reputable firm? I got conned into a quick fix a few years ago so am very anxious to trust again but NEED to sort our financial situation out. help!!!!!

danp100

hi,
i was in a similar amount of debt if not a bit more, and an IVA has been the only way out for me. I am not sure about equity since i dont own a house so that has not come into my agreement, but how long would it take you to clear your current debt? An IVA isnt easy but you will be debt free in 5 years, I am currently two years in and it goes a lot quicker than you think, you have to start somewhere. Regarding a good company to contact, i have my IVA through Mccambridge duffy and they have been excellent. Any queries I have had so far they have always responded very quickly and have been very helpful and understanding.
As I said I dont really know about the quity situation but surely if you cannot afford the payments on your current debt this is only going to continue to increase, so losing some equity may be a small price to pay if you can be debt free in 5 years? Not sure if that helps at all, any questions please ask,
dan

Tixy

Hi bantams and welcome to the forum.

Have you spoken to one of the debt advice charities yet? If not I would start there and speak to them about your options - IMPORTANT - Where to seek professional impartial advice about your debts.

They'll give you advice on IVAs and other possible solutions.

Bantams

Thank you Tixy, this is the first time I have asked for help from the public and appreciate any constructive advice. I will look into what you have advised. Much appreciated

rabbit_burrow

With regards to the equity thing, they don't have a stake on your property, what happens is if you have available equity towards the end of your IVA (in the last year) you will be required to remortgage to release more money.

Your property remains yours, you just have to pay some extra.

Bantams

I am so glad to have some good advice from you all, thank you

cheesedoffwithdebt

Please don't be intimidated by an IVA. I was quite anti IVA's because of the way they are advertised strangely, they are often promoted as a way of writing off debt, but of course that's not really the point. With and IVA you know when your debts are over- you only have to re-mortgage if there is a certain amount of equity in your property by the way, otherwise the IVA may go on for another year, so it's not a given that you'll have to do anything with the house.

However now I am more than half way through and looking forward to being completely debt free which is now a light at the end of the tunnel rather than a remote possibility.

Agree with the other posts- have a look at the debt charities.
However you raised another issue which is the balloon payment on the car. If you do decide on an IVA I'd strongly suggest that's discussed with the Insolvency practitioner because if you need it for work then this is something you'd be better to look at and plan for now. You actually have an option to lease a car. if you don't pay the balloon payment on this one then the car goes back. There are companies out there who will lease to people with bad credit so although its a higher cost it is an option and does not involve debt.

Once in an IVA it isn't allowed to take out any credit agreements but I do believe there are special dispensations over cars- with mine, the lease expired and contrary to what I'd been told before the lease company had changed their stance and were no longer extending leases so I ended up with the same car under a hire purchase arrangement- not ideal but I do pay less each month (I didn't have the cash obviously to buy the car outright) I use my car for work like you and it's a requirement of my job that I drive, we get a car allowance. But as you know now what's on the horizon, as I said, you'd be better to specifically ask about this and know what arrangements to make.

milliemonster

If you have no equity now then a clause would be put into the iva to review the equity at month 54, u would only have to release up to 85% of any available equity at that point or extend for a further 12 months.

Please please don't go with stepchange for an iva, they will refer you on to grant Thornton and many people with GT are having major problems getting their Ivas closed off, some have finished their 5 years payments over 2 years ago but are still waiting for their completion certificates so are still on the insolvency register and bound by the terms of the iva regarding windfalls etc. it's not strictly true that you will be debt free in 5 years, you will be debt free once you have fulfilled your obligations regarding contractual payments which could be 6 years, and only once you have that completion certificate in your hand.

Regarding your car, most IP's will tell you they can write your payments towards the car into the proposal and will happily allow you to refinance when the balloon payment becomes due, but you will run into problems as once you are in an iva you will struggle to get anyone to lend to you. On top of this, some people have found that their cars have been repossessed once the lender finds out they are in an iva regardless of whether they have been maintaining payments or not. Vw are prime examples of this and will repossess.

I am in an iva myself and very glad I didn't go with one of the charities, the iva company I am with are approachable, professional and I can easily speak to my ip if I wish, she has made this path easy for me so far, any issues I have had have been dealt with swiftly and courteously and I would highly recommend her.

Anyone who tells you the charities are free are wrong, no one provides an iva for free, and pay plans fees are some of the highest out there

Saracen1

please dont pay for advise national debt helpline wil give you all the information you need free
if you choose a IVA agaency do a forum check on them and get the lowdown on each one
I am 2 years into my IVA and I have learned a hard lesson our debts were 60K + We learned how to save money and not waste it and how to enjoy doing free things in our spare time rather than expensive stuff
I hads not realised how much money we wasted and how much more we can do with much less money, but its a lesson I will never lose sight of after my IVA is finished
An Iva gives you space and no more letters and phone calls demanding money you just dont have it clears the stress in a short space of time it has its drawbacks but what do you expect its not meant to be easy
Good luck

milliemonster

No you don't need to pay for advice, all reputable IP's will offer debt solution advice for free, but no one offers an iva for free, you should not have to pay an upfront fee either if you do go down the iva route.

Tixy

Its best to start by getting impartial advice from one of the debt advice charities first. To help you decide on what course of action is most suitable in your circumstances.

If you decide that an IVA is the right option for you then you need to decide which IP to use. Best way to do that is to read some online reviews and talk to a few.