IVAs

snkc4dd2

Hi I'm new to this forum, so please bear with me. Just want abit of advice really. My partner is thinking of going into an IVA. Lost his job last month and things have rapidly gone down hill since. We've explored every avenue and it seems an IVA is our only option. The bank have been useless at offering any advice..surprise surprise. What I'd like to know is if theres anyone out there who has had an IVA, and lived to tell the tale? Was it a good decision and did you have piece of mind when it was up and running? Im worried sick. HELP!

longtermplanner

No surprise here that your bank was useless

Yes lots of people survive IVAs. Unfortunately at present the IVA failure rate seems to be running at over 20%, which is too high for comfort.

Do you have a house? If you don't, you should probably be looking at bankruptcy instead.

If you do have a house, how much equity does it have? And how easy are you finding it to pay the mortgage with your husband out of work? An IVA doesn't solve any problems that you have with secured debts.

You also need to pay close attention to the equity release provisions in an IVA if you do have a house. A new IVA will probably incorporate the 2014 Protocol provisions. It used to be that you were asked to try to remortgage in your 5th year and if you couldn't, the term was usually extended by a year. Under the new Protocol, you may have to look at taking out a secured loan inthe 5th year if you can't remortgage. There is a lot of concern about how this is going to work in practice, and new people looking at IVAs unfortunately don't have any past history to go on. Personally I think the new provision is pretty worrying.

How likely is your OH to find another job? If you go into an IVA now and he then gets employed, your IVA payments are likely to increase a lot. IVAs are not good temporary debt measures. If everything could be fine in a few months then you need to be looking at a Debt Management Plan instead.

National_Debtline

Good advice from ltp above.

OP - ideally we need to know a bit more about your (partner's) situation. What is right for one person might be totally inappropriate for their next door neighbour. An IVA is just as big a commitment as bankruptcy and so your partner needs to make a decision that is fully informed.

Regards

Dennis
@natdebtline

snkc4dd2

Thanks for your replies. Its good to talk to other people about it. My partner has got work, but its with an agency, so one week he could have work everyday, then the next week he could have just two or three days. We don't own our own home (unfortunately) never been able to save for deposit. We private rent. Its all abit confusing, never been in this situation before. Think we need to do a lot more investigating. Thanks guys, I'll let you know how we get on.

National_Debtline

We have a useful page on our website which talks about the various insolvency options in more detail, you can find it *here*.

On the page you can also click through to the more detailed fact sheets on both IVAs and Bankruptcy. If your partner's income is via agency work, I woud urge you to avoid an IVA until such a time that he'll be able to meet the payments for the duration of the term - which is usually 60 months. If his income dries up part-way through he oculd find himself in a worse position than at the beginning.

As you are in rented accommodation, bankruptcy could be a faster and cheaper alternative.

Best wishes,

David @natdebtline

alastairq

I agree with that last bit.....try looking at Debt Camel....a useful link to your particular question I include below

http://debtcamel.co.uk/hard-choices/iva-vs-bankrutcy/

debtinfo

good advice above from lots of people but just wanted to clarify one point and that is on the % of IVA's that fail.

To get a clear picture you need to look at years where most of the IVA's have either completed or failed and and have a relatively small amount ongoing - IE where a full cycle has been completed. From the most recent data published in Sep 2013 that would be IVA's that started about 2005-2007 where the failure rate is is between 34 and 38% which is a high point. The long term failure rate is about 30%, Although the early (year 1 and 2) failure rate has been better recently

This is not to sway you one way or another,just a statistical fact. IVA's fail for many reasons ranging from them not being the right solution in the first place to totally unavoidable life changing events and everything inbetween.

If you want to peruse the the statistics then they are in the link below. unfortunately it doesent tell you why they failed

http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/IVAs/ivas.htm