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Can’t get an IVA?

MrsMc123
Posts: 1 Newbie
Hello
Newbie here.
I had a call yesterday with StepChange and they said we won’t be offered an IVA with them due to the capital in our property (£80k with debts of £58k).
They suggested we contact other companies if this was the route we wanted to take but said it would be very doubtful we would be offered an IVA.
Does anyone know the threshold? Or has anyone successfully got an IVA in a similar situation as me?
Newbie here.
I had a call yesterday with StepChange and they said we won’t be offered an IVA with them due to the capital in our property (£80k with debts of £58k).
They suggested we contact other companies if this was the route we wanted to take but said it would be very doubtful we would be offered an IVA.
Does anyone know the threshold? Or has anyone successfully got an IVA in a similar situation as me?
0
Comments
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Hello
Newbie here.
I had a call yesterday with StepChange and they said we won’t be offered an IVA with them due to the capital in our property (£80k with debts of £58k).
They suggested we contact other companies if this was the route we wanted to take but said it would be very doubtful we would be offered an IVA.
Does anyone know the threshold? Or has anyone successfully got an IVA in a similar situation as me?
What is your loan to value if you have £85k of equity?0 -
Sometimes a debt management plan is best in your situation, its more flexible especially if you go self managed.
If you post an SOA we can arrive at some figures.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
Hi MrsMC123 and welcome to MSE,
Because your assets outweigh your debts, you are not technically insolvent, so an IVA is unlikely to suit you. In an IVA there is something called an equity release clause which takes place in the 4th year. This asks you (through an IVA protocol compliant provider) to take up to 85% of the equity out of the house through a secured loan to try and end the IVA early. Although this is rarely successful because your credit file is damaged, it can cause you to repay more than the total debt if you did have manage to get a secured loan plus you have made monthly payments.
So, with this in mind, you may be able to look at a Debt Management Plan (DMP) or self negotiation to deal with the debts (equally I would advise against bankruptcy). Although a DMP is not legally binding and you will need to repay all of the debts (nothing is written off) it is a lower risk option to the property. A DMP allows you to make payment to a company who will negotiate with your debts for you. Also, you shouldn't pay a fee for this service; so focus on the free providers. Hopefully that helps,
Laura
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
The answer is:
It all depends who your creditors are. Some will not bat an eyelid at accepting an IVA even though your equity outstrips your debt, others will not countenance it at all.
Have SC calculated what you can realistically afford? Whilst the equity release issue is indeed a potential issue, affordability is just as important at this point.
If you want to put up a list of creditors, and what SC think you can afford, I will be able to tell you whether an IVA is feasible or not.0
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