Advice - is an iva a good idea for me?

glamb15

Hi looking for advice. 

Me and my wife have a combined roughly 60k debt (excluding car finance and mortgage) its all loans and credit cards, most of which have been passed on to debt collectors. It’s 15 accounts/lenders, although a few have been passed onto the same debt collectors. 

If I were to pay them all monthly it would take us way beyond our income. I can’t remortgage due to defaults on credit score so that option is out. 

Mortgage is 170k, house value 300k. 

Car finance has 2.5 years left to run. 

Does car finance have to be included in an IVA? I can’t lose my car as it’s a big 7 seater and have 4 kids. And obviously don’t want to lose my house. 

Does Iva sound suitable for us?

thanks for any advice. I appreciate it’s all our fault getting into to debt but I need to get this sorted so I can stop worrying about it. 

Edit: should have also added my wife is self employed with 3 years books. 

fatbelly

Potentially you're suited.

Do you want to post a statement of affairs?

glamb15

fatbelly said:

Potentially you're suited.

Do you want to post a statement of affairs?

Thanks. 

I’m new to this. What would I need to post?

fatbelly

Sorry

There's a calculator here
https://www.lemonfool.co.uk/financecalculators/soa.php

Please format for mse

glamb15

fatbelly said:

Sorry

There's a calculator here

Please format for mse

Wow that’s a lot to fill in. Gonna have to sit down and work some things out to fill that out properly. I worked out the budget side but not the debt side 100%. 

But I do know
Monthly figures
Combined income including benefits- £2950
Budget sheet from that link - £2700
Debts £920

so that only leaves £250 p/m where as I should be paying around £900 in debt. Is this info helpful?

mwarby

It’s worth remembering that at the 5 year point you’ll be ask to release equity if possible and affordable. Potentially you have a lot of equity to release.

Also with an IVA you can end up paying more than the original debt, as there are fees of around 3k (they often depend on how much they collect for creditors). These fees don’t matter if you only pay say half of debt, but do if you pay off most or all of it

The IVA company may propose repayments, but these aren’t fixed, and if circumstances change can go up.

IVAs can also fail, often due to a drop in income or similar. If you IVA has issues your somewhat at the mercy of your creditors. If they don’t accept the changes needed your IVA can fail. If it fails you owe both the original debts and IVA fees (minus what you’ve paid in already l)

Sorry but if a long downer post on IVAs, but just want to be sure you go in eyes open. It might be that an IVA is your best option, but there are many companies who will give you an IVA hard sell 

glamb15

mwarby said:

It’s worth remembering that at the 5 year point you’ll be ask to release equity if possible and affordable. Potentially you have a lot of equity to release.

Also with an IVA you can end up paying more than the original debt, as there are fees of around 3k (they often depend on how much they collect for creditors). These fees don’t matter if you only pay say half of debt, but do if you pay off most or all of it

The IVA company may propose repayments, but these aren’t fixed, and if circumstances change can go up.

IVAs can also fail, often due to a drop in income or similar. If you IVA has issues your somewhat at the mercy of your creditors. If they don’t accept the changes needed your IVA can fail. If it fails you owe both the original debts and IVA fees (minus what you’ve paid in already l)

Sorry but if a long downer post on IVAs, but just want to be sure you go in eyes open. It might be that an IVA is your best option, but there are many companies who will give you an IVA hard sell 

Thanks for the advise. If in 5 years I can remortgage and pay the rest off than I have no problem doing that. It’s my debt so I have no issue paying it ALL off if I have to. I’m not looking at doing an iva as a way to only pay a small percentage. 

I’m pretty sure a lot of companies don’t actually charge fees for Ivas do they?

mwarby

I've never seen a no fee IVA yet. The fees are often not paid (if you only repay half debt, the fees come out of creditors repayment) directly by the insolvent individual, in your case they would be as you'd repay 100% of debt either through monthly payments or by releasing equity(although that will depend on equity and finding a lender)

If yiu want to repay it all, a DMP may work out better, you could still remortgage to clear debts at later stage, but this would be on your terms and not the IVA companies. There have been reports of people being pushed into not so great secured loan deals, to release the equity

glamb15

mwarby said:

I've never seen a no fee IVA yet. The fees are often not paid (if you only repay half debt, the fees come out of creditors repayment) directly by the insolvent individual, in your case they would be as you'd repay 100% of debt either through monthly payments or by releasing equity(although that will depend on equity and finding a lender)

If yiu want to repay it all, a DMP may work out better, you could still remortgage to clear debts at later stage, but this would be on your terms and not the IVA companies. There have been reports of people being pushed into not so great secured loan deals, to release the equity

Oh I see what mean regarding the fees. 

We looked at a DMP but we didn’t like how long it would take to complete and want something more secure where they can’t keep chasing you or pull out of the agreement whenever they feel like it. 

fatbelly

There are always two sets of fees and they are built in.

A full soa would still be useful.

But there's no harm in talking to some IPs and see what you think. Your £250 surplus should be enough to play with. You say 'I’m not looking at doing an iva as a way to only pay a small percentage.' But that is the big plus of an IVA. My rough figures were that you would repay 20p in the £

You do need to do your research and go in with your eyes open. Mwarby is right to state the negatives, because the IVA-pushers won't.

The problems I've seen are where someone wants to move within the 5 years. They are then surprised to find that they can do that but all the debts must be repaid in full, plus all the fees (and interest can be added), from the proceeds of the sale. And the restriction at the Land Registry enforces this.

Depth_Charge

mwarby said:

I've never seen a no fee IVA yet. The fees are often not paid (if you only repay half debt, the fees come out of creditors repayment) directly by the insolvent individual, in your case they would be as you'd repay 100% of debt either through monthly payments or by releasing equity(although that will depend on equity and finding a lender)

If yiu want to repay it all, a DMP may work out better, you could still remortgage to clear debts at later stage, but this would be on your terms and not the IVA companies. There have been reports of people being pushed into not so great secured loan deals, to release the equity

, No,Ive not seen a no fee IVA yet either. If anyone knows of such a thing could you please let us know who & where?