Annual Reviews

evherkes

Hi all,


Just about to apply for an IVA, however, I have been looking for more information about the annual review as it is not very clear from my research what it consists of and how it is done. Do they take 12 months bank statements from all accounts, HMRC check, scrutinise all payments etc.?


Would anyone be willing to share experience with me this please?


Thanks,

foxy-stoat

I had to submit 12 months bank statements and payslips and fill out an annual expenditure form.

Is your financial situation that bad that you are about to apply for an IVA?

You will want to be owing 2 or 3 times your gross annual salary with high interest debt with no hope of turning that into zero or low percentage debt.

Had to ask as some poor sap signed up to an IVA a few months ago and wasn't in enough debt to warrant it and regretted it.

evherkes

Annual salary is 28k before deductions


Debt is around 32k (probably more but I can't bare to check it since I last looked in Dec).


Interest rates are 50% mark for over half of the debt. My credit rating is such that there is no chance of any reduction or balance transfers etc.


It is important for me to see light at the end of the tunnel and I need an end date in sight which is why I am pulling towards an IVA. All of these debt plans mean I can still be pressured with calls and home visits and be paying it off for over 6 years which I just cannot stomach.


Happy to post further break down later if requested.

foxy-stoat

That is high interest. I would of liked the debt to be nearer double the annual salary though. Credit score means nothing, its the history that counts. If you haven't default yet then you have a few months to play with.

Any chance of making it "easier" for yourself, drawing the monthly payments in cash for a few months and keeping it safe for when it rains, as it will a some point in the next 5 years. Defaulting on all your cards for 3-4 month and then applying for an IVA? Your credit file will be shot for 6 years anyway.

Just a thought.

PrettyKittyKat

Each company will process an annual review slightly differently. I would recommend asking whichever company you decide to go with for their exact process.

The one I worked at asked for 3 months bank statements for the annual review and would check these to evidence bills that go out via DD. If there were any annual bills then we asked for these to be sent to evidence the cost (such as car insurance). We would not scrutinise every single thing on a bank statement - whether you choose to spend your household allowance in McDonalds, Aldi or Waitrose is up to you. The only time we would question this is if someone was asking was for an extremely high shopping allowance and saying there was no way they could reduce this - if we could see all their food shopping came from M&S we would suggest shopping around as a way of helping them, but this was few and far between as I am sure you can imagine!
I would glance over the bank statement just to make sure there was nothing of concern - e.g. gambling, payments to a debt company (payday loan, undeclared credit card etc as these are not allowed) or undeclared income (this was more commonly seen!)

All payslips must be provided, we asked for them at the most every 6 months but lots of my clients sent them monthly so they didn't lose them. If self employed we asked for the tax return and accounts. Plus any benefit entitlement letters.

sourcrates

It does depend on the IP that you choose, all have similar procedures, with slight differences, best to ask beforehand, then there’s no nasty surprises later on down the line.
An IVA gives you legal protection from your creditors, no bailiffs, no home visits, no letters, or even calls.

With 32k of debt an IVA could be suitable for you, I assume bankruptcy is not an option ?

Your not scrutinised on every detail, you can spend what and where you choose, as long as it’s within budget, for peace of mind, and an end to your debt problems, providing a few bits of paperwork is not the end of the world.

evherkes

PrettyKittyKat wrote: »

Each company will process an annual review slightly differently. I would recommend asking whichever company you decide to go with for their exact process.

The one I worked at asked for 3 months bank statements for the annual review and would check these to evidence bills that go out via DD. If there were any annual bills then we asked for these to be sent to evidence the cost (such as car insurance). We would not scrutinise every single thing on a bank statement - whether you choose to spend your household allowance in McDonalds, Aldi or Waitrose is up to you. The only time we would question this is if someone was asking was for an extremely high shopping allowance and saying there was no way they could reduce this - if we could see all their food shopping came from M&S we would suggest shopping around as a way of helping them, but this was few and far between as I am sure you can imagine!
I would glance over the bank statement just to make sure there was nothing of concern - e.g. gambling, payments to a debt company (payday loan, undeclared credit card etc as these are not allowed) or undeclared income (this was more commonly seen!)

All payslips must be provided, we asked for them at the most every 6 months but lots of my clients sent them monthly so they didn't lose them. If self employed we asked for the tax return and accounts. Plus any benefit entitlement letters.

Thank you. I don't plan on shopping with Waitrose or M&S! I wasn't sure whether I will need to keep every receipt etc like a tax return or what to expect really so I would rather know now - I also don't really want to have to justify £5 in Starbuck once a month (if I am lucky) and be patronised but it doesn't sound like that is the case which is great and seems much more realistic!


I'd still have things like car finance, car tax, car insurance and then gas, electricity, water, council tax and rent but these are all necessities, unless I don't work of course!

evherkes

sourcrates wrote: »

It does depend on the IP that you choose, all have similar procedures, with slight differences, best to ask beforehand, then there’s no nasty surprises later on down the line.
An IVA gives you legal protection from your creditors, no bailiffs, no home visits, no letters, or even calls.

With 32k of debt an IVA could be suitable for you, I assume bankruptcy is not an option ?

Your not scrutinised on every detail, you can spend what and where you choose, as long as it’s within budget, for peace of mind, and an end to your debt problems, providing a few bits of paperwork is not the end of the world.

This is exactly my feelings towards it. The "recommended" option from a couple of money advice services was for a debt management plan that I handle myself. The thought of door knocks, calls etc. would be unbearable for me, and knowing there would be a set end date too is much more achievable and manageable too.


I'll call around a few places (after reading reviews) and make a decision from there. I just don't want to be patronised or made to feel bad about every transaction.


Unfortunately, bankruptcy isn't an option as I need my car and it is on finance too. If I do not have my car I cannot work at all - so in turn, no money...no house..I'm sure you get the picture!


Thank you,

ToxtethO'Grady

With your car on finance the creditors will probably put in your IVA proposal that once the finance finishes you have to pay that in to the IVA, you'll find it hard to get another HP agreement when you're on an IVA.
The reason the advice is a DMP may be due to the finance ending during the IVA and you'll end up being asked for a higher payment once it does.
One of the risks with an IVA, because it is legally binding, you can end up paying all your debt plus the fees back when there's a change. You'd then have to fail the IVA if you didn't want to do that.



Check your agreement to see what type of finance it is, there are several different types.

https://www.hpi.co.uk/guides/types-of-finance.html

PrettyKittyKat

I found working in an IVA company that you saw a whole host of reasons why people were in debt - alot of time it wasn't just frivolous spending. It was an accumulation of circumstances, sometimes very tragic ones. IPs/IVA companies are not there to judge, they should not patronise you, ultimately without people being insolvent they have no job! In my view tackling your debt and making a plan to pay back what you can and to manage your finances is a brave and responsible thing to do.

Speak to a few companies. If any make you feel judged/patronised/not listened to or you are not happy with their processes then they aren't the company for you!