IVA Advice

chirpychick

I would say only go for an IVA if you really cannot get by day to day. If you are quickly sinking and cannot afford to pay your bills each month.
An IVA is not a quick problem solver! Once it is arranged there is very little wiggle room and you have to agree to meet those payments for 5 years (as it will be in your case as you do not own a property).
It is in no way a quick fix or an easy option!
It is a really long hard slog. So much changes in life within that 5 years and we constantly felt we wished we werent in the IVA even though we literally had no other choice at the time.
When we started the IVA we truly believed we had no area to cut back on but eventually we realised our priorities were way out of whack. I wish i could have seen that before entering into what was a 6 year agreement so we could have had more control over our lives.
You will have to pay part of your bonus into the arrangement.
Also any PPI.
If you get an increase in salary that will then affect your payments also.
For us it was the only option and I wouldnt take it back because of what we have learnt from it but i urge you to speak to CAB and Step change and properly evaluate all options before going down this route.

mwarby

sourcrates wrote: »

for example, if you don't smoke, book money for tobacco, if you don't drink, book money for alcohol,

Hmm this does sound pretty dodgy to me, I'm not sure if it'd count as fraud but must be getting close. Yes it's going to be a small win £10 here and there doing such things, not big money fraud, but if caught out it could make things awkward and cause more scrutiny in other areas.

sourcrates

mwarby wrote: »

Hmm this does sound pretty dodgy to me, I'm not sure if it'd count as fraud but must be getting close. Yes it's going to be a small win £10 here and there doing such things, not big money fraud, but if caught out it could make things awkward and cause more scrutiny in other areas.

Not fraud at all, they are legally allowable allowances, so why not use them ?

Who is ever going to know or care ? Apart from yourself that is !!

mwarby

Maybe it's just me, but I see quite a difference between building in breathing space on say car and groceries (as these can vary wildly I'm sure the OP doesn't want a new budget every time your car needs fixing,fuel goes up or milk goes up) and claiming to be a smoker when I'm not. To me one is difficulty in estimating an expense the other is an outright lie

DorisTrousers

All IP firms have to use expenditure guidelines approved by creditor voting houses, which are the StepChange ones. These are notoriously skinny, and it is no surprise if extra expenditure is inserted to make any payment arrangement more manageable. There is a dilemma here, and not an easy one. Use the extra and you are effectively telling porkies. Don't use the extra and risk the payment being too high and therefore not sustainable. I.P. firms get a bad enough press as it is, and my guess is that they would rather take the pragmatic course of action than ask debtors to pay too much.

Hopefully, this will soon be a thing of the past however as I believe StepChange have confirmed that they will replace their own guidelines with the new Standard Financial Statement (SFS) when that is rolled out. Although this is a huge step in the right direction, my only fear with it, and I pray I am wrong, is that regardless of SC using the new SFS, creditor voting houses will stick to the old ones in an attempt to maximise returns. Voting houses SHOULD use the new guidelines, but I am not aware that there is any obligation on them to do so.

My own opinion is that, on balance, and having proposed many thousands of IVA's over these last 20 years or so, I would not have too many qualms about putting a little extra in a budget to make life that little bit easier. If I am ever going to be wrong on what can be afforded then better the error favours the debtor rather than creditors. I understand if people do not agree with that though.

Srgur

Interesting comments and thoughts here. Our friends finished what turned out to be a 7 year IVA and It was, although done now, an awful experience. Influenced apparently by the individual (case worker) at the time.

They experienced everything from excellent calming service to unwelcomed scaremonger tactics all caused by errors due to new case workers who couldn't understand their circumstances or decisions by their predecessors. This would always result in them having to phone in and explain the IP's error for them to reply "oh I see now, ignore that letter then warning that you are about to fail your IVA".

I echo the words above about fully investigating your circumstances before going for an IVA, our friends last 7 years have been scrutinised on a quarterly and annual basis. If you have a good income like theirs in the end and that income changes regularly you may be in for a rough time with them conducting adhoc I&E reviews which are stressful in themselves - the worst thing being what one advisor considers allowable the next one disagrees and wants to take it back off you (again in their experience). If you earn a small wage and don't expect any fluctuations I also agree they are likely to leave you alone and it could well be a 'smooth' experience.

Remember, the likes of Payplan being a free charity doesn't make it free. They take their fees (often into the thousands) along the way - you just don't pay up front like BR.

Playing devils advocate here you may not be in for a smooth ride, nor get any flex and could end up completely imprisoned by the whole process which lasted 7 years just like our friends. Their fault? Yep. Did they pay? Yep. To those who have found it a breeze I'm happy for you, those who haven't - I empathise and those about to start - good luck.