Would a IVA be the right choice for me?

bestmummy

I'm currently on a DMP, never missed a payment and things are going quite well, all apart from 1 creditor froze interest etc. I was now told that an IVA would be good for me and at first I accepted as in 5 years time I would be debt free... I have all the forms at home to sign but I decided to have a look online and I am confused as to why I am being offered an IVA, first of all I'm not struggling to make payments, my debts when I first entered a DMP (about 2 years ago) were about £12000, should be slightly less now and I read that usually IVA are offered to people with debts over £15000. After reading online I understand an IVA is an alternative to bankruptcy?? I don't think this is for me, so my questions are, is an IVA the solution for me? If not why are they (payplan) suggesting this for me (they are meant to help me right?)? What can go wrong with and IVA? Thanks

Depth_Charge

bestmummy wrote: »

I'm currently on a DMP, never missed a payment and things are going quite well, all apart from 1 creditor froze interest etc. I was now told that an IVA would be good for me and at first I accepted as in 5 years time I would be debt free... I have all the forms at home to sign but I decided to have a look online and I am confused as to why I am being offered an IVA, first of all I'm not struggling to make payments, my debts when I first entered a DMP (about 2 years ago) were about £12000, should be slightly less now and I read that usually IVA are offered to people with debts over £15000. After reading online I understand an IVA is an alternative to bankruptcy?? I don't think this is for me, so my questions are, is an IVA the solution for me? If not why are they (payplan) suggesting this for me (they are meant to help me right?)? What can go wrong with and IVA? Thanks

Hi

Interesting

£15000 is a figure that most allude to with an IVA however this figure is not absolute and there are companies that will look at one for less than £!5000

Could you put up your current SOA (including assets)?

Could you put up the IVA proposals ?

Have you compared the above two as far as payment timescales are concerned?

Have you any potential PPI claims?

The other question is - have you put your questions and points to Payplan?

Info below from the CAB on IVAs & other options that might help

http://mymoney.nedcab.org.uk/moneyadvice/remedy_6.asp

http://mymoney.nedcab.org.uk/moneyadvice/index.asp

Best Wishes

DC

toomuch2

Depth Charge

What a great resource that CAB is

longtermplanner

bestmummy wrote: »

my debts when I first entered a DMP (about 2 years ago) were about £12000, should be slightly less now

Can you find out how much they are? they should be dropping if most of your creditors have frozen interest.

This will let you work out how long your DMP will last. If your debts have dropped to 11k, it will take about 11 more years - that's a long time. If they have dropped to 10k, then your DMP will last another 5 years and then signing up to a less flexible IVA would be a foolish move.

If your not struggling to make payments, could you increase your DMP payment a bit so the debts go even faster?

UpToMyNeckInIt

Hi bestmummy,

I think the question I would be asking your DMP firm is: why were you not 'eligible' for an IVA in the first place? You would be half way through by now.

Without a more detailed breakdown of your finances, it is difficult to advise further. However, a £12K debt is very low to normally consider an IVA (although it will earn big bucks for your debt management company). So unless you have significant assets to protect, you should give consideration to going BR or a DRO. These options will be done and dusted in 1-3 Years max, and your credit file will be restored in 6 years. (Worth noting that IVA, BR & DRO are all forms of insolvency).

Or carry on repaying your debt for another 11 years, and then allow another 6 on top for your credit file to recover.

In addition to the good advice here, have a look at the 'Debt Camel' website(google it). It provides a no-nonsense comparison of your various options, and has been set up by a CAB advisor.

Ultimately it is well worth you having a chat with your local CAB office to discuss your options as well.

All the best.