please help iva!

crazylady5

hiya everyone, i would really appreciate some advice!
were currently on a dmp with step change which is fine but the more stuff i hear the more i worry! we have about 37k of debt and sometimes its such a struggle! we have a mortage and 5 kids so keeping our home, through everything is the most important thing:T all i keep getting of late is calls from iva companies? i just don't really understand it? this company are called tudorkirk? they say after 5 yrs we wouldn't be able to release equity which i might add we don't want to do, and we would carry on for another year, meaning 6 yrs on the iva, and then the rest of the debt paid off and that's it end of? :j but forgive me for being sceptical lol but is this really too good to be true? i'm told that cab and other "charity funded organizations " aren't qualified enough and are only volunteers! which i guess slightly true.

in a nut shell i just want us to get out of this awful state we got outselves into my husband is self employed too, but he thinks things are on the up, which also worries me in the sense of surely if the whole economy is looking brighter for us in the future, then how can they say we wont be forced to remortage? if we have lots of equity?

haha so sorry if this is a ramble! i really would appreciate your advice i don't really know where to turn!

thanks so much x:beer: x

FiatFan_2

If you're in a dmp with step change i would have expected them the have discussed the other options of iva and bankruptcy with you. What they said sounds about right, standard term for iva is 5yrs with the possibility of an equity release dependant on circumstances or a 1yr extension if there isn't any equity.

As you're with SC I would give them a ring and discuss it with them as they already have all your details, but I certainly wouldn't entertain the idea from a cold caller. Dependant on their advice, it may be worth getting a second or third opinion from one of the other recommended free advice charities.

An iva/br gives the security of a end date for your debt, dmp's could have a ridiculous length that could be unsustainable and is dependant on creditors maintaining there good will.

HTH

cheesedoffwithdebt

I do agree with Fiatfan with the caveat that Stepchange apparently use Grant Thornton to administer IVA's and GT are getting quite a bad reputation by delaying completions to seek out spurious PPI claims.

Could I expand a little on what Fiatfan has said?

With an IVA there is a cut off date- they normally run for 60 months at the end of which if there is a certain amount of equity in your house, you are required to remortgage and release it- on my IVA I'd need to have 15% of free equity, unlikely because prices haven't moved. In which case you then pay for an extra year- but then after that your debts are considered paid.

Companies try and sell IVA's because they get fees for the work they do on them-it is a legal process and the IVA supervisor is responsible for sending your payments to creditors and keeping account of your activity during the IVA period.

So the issue really is, getting a second unbiased opinion really. To do that you could go to CAB, they have no vested interest in what you do.

IVA's are a route that is open but you must go in with your eyes wide open really, they are not as flexible as a DMP, but equally once in an IVA creditors can't keep contacting you and harrassing for more money, as long as you can keep the arrangement it's very secure and some, not all of your debt is effectively written off.

You could get more opinion on here- if you wanted that it would be helpful to see your income and expenditure, and how much you are currently paying into a DMP. In broad terms, as long as creditors can see a reasonable return on the whole debt they should agree to an IVA, but it would be good to see more because of course an IVA may not actually be the final and best solution. Do you own a property?

So-an IVA is a serious agreement concerning which you need a good insolvency practitioner, and sorry Stepchange but it doesn't look like GT are cutting the mustard right now, and some good advice. I would not enter into an IVA with someone who had cold called me on principle to be honest but thats me.

I am more than half way through mine now, and can see a very small light at the end of the tunnel, but had I remained in a DMP I'd have many more years before being debt free- so you have alot to think on. All the best.

National_Debtline

Hi there OP

Sound advice above I would say. I would never buy any goods or services on the basis of an unsolicited call, especially when it's something as serious as an IVA. If you need one badly enough, you'll go out and find it.

For the record, how much are you currently paying off each month through the DMP? And do you actually have any equity at present, in your opinion? Two important questions to ask yourself when assessing whether an IVA is appropriate/safe for you.

Dennis @NDL

nellynottm

Regarding the following statement:

"standard term for iva is 5yrs with the possibility of an equity release dependant on circumstances or a 1yr extension if there isn't any equity."

Is this correct?

My understanding is that, at year 4 you do a house valuation and if there is equity over the 15% LTV ratio then you are expected to either obtain an equity release loan or extend the IVA by a further year (making your total IVA payment schedule 6 years). However my understanding is, if your house valuation proves that there is no equity over the 15% LTV ratio then your IVA ends at year 5 with no extension of 1 year.

Can anyone clarify?

Anondebtadvisor

You shoukld be very cautious entering into an IVA with anybody that cold calls you - before you make a decision make sure you do your research and read the reviews on different companies and do speak to 2 or 3 before you decide who to proceed with

crazylady5

thank you all so much :T we have a mortage and the house is worth about £260-280k we have about 200k mortage still outstanding! these people are on my back so gonna have to tell them to go jump! lol when i signed up with step change i did it all online so tbh i'd never heard of a iva only since i keep getting call after call from these iva companies! my worry is that yes, things will of course look up for all of us economy wise and we will have to remortage? i'm a little thick haha if you'd not noticed, i just don't know what to do? a few people have said that cab and other debt help lines are ok but will end up giving wrong advice ? i just don't know what to do? were currently paying step change £367 i think a month, and we have 37k debt i think paid off in 10 yrs my husband currently earns about 450-500 a wk which differers tbh, and hopefully things are looking better!! any more info would be great? so who should i seek advice from? i mean with the dmp were currently on? how likely is it we can just carry on paying for 10 yrs or will they give us grief? sometimes i think having a mortgae and trying to do things right has done nothing but cause us hassle and upset should be like everyone else i know and be on the fiddle and not even work!!!

crazylady5

National_Debtline_representative wrote: »

Hi there OP

Sound advice above I would say. I would never buy any goods or services on the basis of an unsolicited call, especially when it's something as serious as an IVA. If you need one badly enough, you'll go out and find it.

For the record, how much are you currently paying off each month through the DMP? And do you actually have any equity at present, in your opinion? Two important questions to ask yourself when assessing whether an IVA is appropriate/safe for you.

Dennis @NDL

my husband seems to think we have about 68-80k equity in the house, and were paying dmp is £367 a month. i do ask if its safe as i just don't understand it i just want what's best for my family we have 5 children and been through so many rough patches because of this debt! seems unfair that when you have a mortage there's no so called easy way out x

milliemonster

There is such suggestion currently that some iva companies are able to secure secured loans to address the remortgage clause, these are at a much higher interest rate than a normal mortgage and to be honest if I had significant equity in a property and were thinking about an iva now I would proceed with caution. No one knows what is going to happen in 5 years, but I wouldn't want to be trapped with a secured loan on top of a mortgage after 5 years of being in an iva

FiatFan_2

cheesedoffwithdebt wrote: »

I do agree with Fiatfan with the caveat that Stepchange apparently use Grant Thornton to administer IVA's and GT are getting quite a bad reputation by delaying completions to seek out spurious PPI claims.

Our SC iva is being administered by Jackie Westerman, i believe that self employed people get referred to GT via SC.

Forgive my lack of knowledge, but with a dmp over the 10yrs you would repay all the debt?

Whereas the iva would allow that term to be halved and you would only pay back what is deemed to be affordable via income/expenditure review.