IVA Company Help

sourcrates

You can`t transfer someone else`s debt into your name, its not possible, so forget that avenue.

Allow me to briefly list the pro`s and con`s of each solution for you.

IVA

A formal debt solution, strict budget, any income over your normal pay must be paid to your arrangement, can last up to 6 years, re-mortgage would be necessary in year 5, you do get legal protection from your creditors though.

DMP

An informal solution, you repay what you owe at an affordable rate, hopefully with all interest stopped, although that is not guaranteed, you must budget well, any extra income is yours still, save an emergency fund, this can be used further down the line to make full and final offers to your creditors, thus reducing the time your in debt, and the balance you owe.

So one informal solution, the other a formal one, either way can work for you, really its your choice which one you go for.

KCUndebtify

It's helping so much to have a source of advice from people who know what they're talking about. Thank you. 
AFA said that they would ask for the 6 year IVA term to be put in writing at the start so that we wouldn't face the remortgage in year 5. No idea whether that's possible or not but we'll see what they come back with in their proposed agreement. 

sourcrates

KCUndebtify said:

It's helping so much to have a source of advice from people who know what they're talking about. Thank you. 
AFA said that they would ask for the 6 year IVA term to be put in writing at the start so that we wouldn't face the remortgage in year 5. No idea whether that's possible or not but we'll see what they come back with in their proposed agreement. 

If that is put into the proposal, then that is what will happen, as long as its approved, which would be a big plus for you.

As I said above, it depends if you want a formal arrangement or a flexible one.

My opinion, for what its worth, with you as a homeowner with a large amount of unsecured debt, in a DMP, you would be at risk of a creditor applying for a CCJ and a subsequent charging order, now I`m not saying that will happen, but it could, and quite easily, scarily so in fact.

Its a long way from an order for sale, as there is a long legal process to go through, and obviously you would have your say in the matter, but in order to avoid such a scenario in the first place, an IVA would provide legal protection from this, a DMP would not.

I`m not a massive fan of IVA`s, but in your case it may be the correct choice.

KCUndebtify

Thank you. I think we are heading towards IVA if the agreement is as promised. Just having major meltdown tonight - can't believe this is where we've ended up. Never in a million years did I anticipate the health issues & that we'd be where we are. But we borrowed the money & that was up to us - we want & need to pay it back to the best of our ability. If this solution means we can live & keep our home for our children & pay back everything we can, we'll do it. 

sourcrates

KCUndebtify said:

Thank you. I think we are heading towards IVA if the agreement is as promised. Just having major meltdown tonight - can't believe this is where we've ended up. Never in a million years did I anticipate the health issues & that we'd be where we are. But we borrowed the money & that was up to us - we want & need to pay it back to the best of our ability. If this solution means we can live & keep our home for our children & pay back everything we can, we'll do it. 

Things happen sometimes that cannot be predicted, so I would not beat yourself up over it, its how we deal with it that matters.

When you borrowed that money, your circumstances were different, now those circumstances have changed, just don`t be too keen to agree to everything that is proposed to you.

The single main reason why IVA`s fail, is because people don`t budget correctly, they run out of money half way through the month, or something breaks down, and they haven`t budgeted an emergency fund, you must budget correctly, if anything you overbudget, and please make sure you set aside money for an emergency fund. it is critical you do this, as you will have no access to credit, so if the fridge goes south, or the washing machine, you need to have funds to hand to replace them.

Remember this will be for 6 years, so things will break, its you that will need to decide how and where to allocate your money, your IP won`t be interested, there are certain levels that are deemed acceptable for budgeting, best to overbudget and agree to reduce, rather than under budget and get into trouble.

Good luck whatever you decide to do.

KCUndebtify

One more question before we decide - if we did go for the more flexible DMP option & then save all that we possibly could for early settlement, how high would the risk to our home be? What is the liklihood of creditors taking action despite having agreed to a DMP (assuming that they do agree in the first place)? This is such a key issue for us. The very lovely advisor from StepChange said that this is very rare, but when I asked how rare she wasn't able to answer really. It was made clear that there can be no 100% guarantee that court action won't happen & of course we understand that, but there's a big difference between CCJs still happen to 2% of people or to, say, 15% or 25% of people when a plan is agreed. 

Thank you.

sourcrates

I can`t find figures for what you are asking, however, what I do know, is that only about 10% of all defaulted debts (homeowners and non homeowners) ever see a courtroom, 90% never do, and of that 10%, the vast majority are accounts completely ignored by the debtor after having their accounts purchased.

Accounts least likely to see legal action are those being repaid on a regular basis.

I would guess and say its pretty much like the figures for "orders for sale" now granted, the number is so low, official figures are no longer kept.

KCUndebtify

Thank you very much sourcrates for all of your help.