Considering IVA

T444123

Hi. Wondered if someone could help me

i have accumalted a large amount of credit card debt (£45000). I have tried to remortgage and take some equity out but unsuccessful. 

Im considering a second charge but this is likely to cost £260 p/m for 30 years (costing me £90,000)

a friend told me to consider an IVA which i have spoke to Financial Support Systems. They have done an income and expenditure check and would cost me £300 p/m for 6 years (£21,600)

my main concern is my fixed term mortgage would expire a year before the end of the IVA. Would i still be able to automatically remortgage via my lender or would the IVA put a stop to this?

would life really go back to normal after the IVA?

also FSS have slightly exaggerated my expenditure. Will this come back to cause me problems on the annual review?

MrFrugalFever

Hi. I don’t know the exact details of the Iva concerning a mortgage but I do know that at year 5 they can make you continue to pay til year 6 or realise equity in the property. The Iva will be on your credit file for 6 years after which then it will be removed and you effectively start a fresh, building payment history up again. 

I should imagine someone who’s in an Iva with a mortgage will be along to explain, but if you have any other questions about it I may be able to help.

T444123

Would you recommend an iva? Just dont want to go ahead with it and then regret forever

MrFrugalFever

There are many different debt ‘solutions’, some involving non-legally binding measures and some legally binding. I cannot say what would work for you as I can only see what you have told us - you have £45,000 worth of debt. That could be considered by some who say have an average annual salary of £25,000 to be excessive and lead to debt solution such as Iva or it could be a medium debt to someone on a salary of £90,000 per annum and an informal DMP arrangement would be best. Each individual has their own unique set of circumstances.

personally, for me, I thought I had just 2 options at the time, 1 was to go bankrupt and 2 was to take out an Iva. Wishing to avoid the bankruptcy route at all costs, I opted for the Iva. It is legally binding and will last 6 years. Failure to comply could result in termination and a court order for bankruptcy put in place. The Iva is designed to try to balance living expenses with debt repayment and although you have access to only the basic of bank accounts and cannot have any credit at all without authorisation from your IP, it does work with you to ensure it’s fair. I also think it teaches you one hell of a life lesson.
I should have considered my options more carefully and wish I knew about this forum first but I wasn’t in the right mental state to tackle everything on my own , I needed to just draw a line somewhere.

fatbelly

T444123 said:

Hi. Wondered if someone could help me

i have accumalted a large amount of credit card debt (£45000). I have tried to remortgage and take some equity out but unsuccessful. 

Im considering a second charge but this is likely to cost £260 p/m for 30 years (costing me £90,000)

a friend told me to consider an IVA which i have spoke to Financial Support Systems. They have done an income and expenditure check and would cost me £300 p/m for 6 years (£21,600)

my main concern is my fixed term mortgage would expire a year before the end of the IVA. Would i still be able to automatically remortgage via my lender or would the IVA put a stop to this?

would life really go back to normal after the IVA?

also FSS have slightly exaggerated my expenditure. Will this come back to cause me problems on the annual review?

IVAs are designed for people with large debts and some surplus income, but not enough to repay in a 'reasonable period', who cannot declare bankruptcy because that would endanger an asset such as a house with equity

So you are in the right ball park.

Your mortgage would revert to the SVR after the fixed term. You do need to be aware of the remortgage term in the IVA, as it can cause problems, although for most people it just means a sixth year.

At that stage yes things should go back to normal as the insolvency mark on your credit file only lasts 6 years

What I would recommend is that you ttake a step back and approach someone independent about your situation - someone who does not have a product to sell, like National Debtline.

If an IVA is your best option, then talk to another IP or two - I have no experience with the one you mention. This site is a useful source of information - she's a debt adviser with Citizens Advice.

https://debtcamel.co.uk/debt-options/guide-to-ivas/
https://debtcamel.co.uk/iva-equity-release/
https://debtcamel.co.uk/choose-iva-firm/

sourcrates

If after careful consideration, you decide to opt for an IVA, may I suggest you pick an IP from the list of approved insolvency practitioners, as you want an IP that is not going to go bust and sell on your arrangement, or one that messes you about, or imposes draconian measures upon you.

The IVA market is wide open, and as such there tends to be a lot of sharks swimming around looking to get their hands on your money.

You have already stated that " FSS have slightly exaggerated my expenditure" that should set alarm bells ringing, you should try to avoid companies that do this, as you are 100% correct, come review time, they will most likely want more money off you than you can afford.

National Debt line will be able to recommend someone to you, don`t go with the first company that comes up on Google.