We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

IVA Advice

Options
Hi all, 

I'm currently experiencing money problems and have been contacting a company called PayPlan to discuss my options. Following an income and expenditure discussion I've been offered IVA or bankruptcy as options. 

Can someone explain to me the process and the damages I may face for either option as I'm extremely worried about taking either route. 

Total owing to creditors is £24,500 and my IVA would reduce my payments to £116 from £700 every month. So is it my best option? 

Has anyone had experience with PayPlan? It was NatWest who I owe the most money to that suggested I go to them. 

What happens during and after an IVA? Potential struggles I may encounter. 

Just trying to get a good all round idea before taking any steps. 

Thanks 

Comments

  • sourcrates
    sourcrates Posts: 29,227 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    Options
    Yes PayPlan are one of the free to use debt advice charities.

    First off, you are nearly 25k in debt, so are you a homeowner or a tenant ?

    IVA`s are recommended for homeowners with large debts who cannot go bankrupt.

    I don`t know what you mean by "what happens during and after an IVA"  ? you make your monthly payments, and at the end of it, you are debt free.

    Your credit file will be toast for 6 year regardless of which debt solution you choose, so if you can tell us a little more about your circumstances, we can tell you if an IVA is a good idea, or not.
    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-letter
  • fatbelly
    fatbelly Posts: 20,835 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    Options
    Payplan are OK.

    We can't say whether that's your best option without knowing more about your situation but you do need to understand what you're getting into.

    Have a look at this 

    https://debtcamel.co.uk/debt-options/guide-to-ivas/
  • dtjones888
    dtjones888 Posts: 12 Forumite
    First Anniversary First Post
    Options
    Yes PayPlan are one of the free to use debt advice charities.

    First off, you are nearly 25k in debt, so are you a homeowner or a tenant ?

    IVA`s are recommended for homeowners with large debts who cannot go bankrupt.

    I don`t know what you mean by "what happens during and after an IVA"  ? you make your monthly payments, and at the end of it, you are debt free.

    Your credit file will be toast for 6 year regardless of which debt solution you choose, so if you can tell us a little more about your circumstances, we can tell you if an IVA is a good idea, or not.
    Thanks for your response. 

    Ok so I'm renting in a shared house with no assets or savings. I'm currently self employed. 

    I guess the word bankruptcy is less attractive than IVA for those who aren't in the know like myself. What other information would you require to be able to more accurately suggest the best option for me?
  • sourcrates
    sourcrates Posts: 29,227 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    Options
    Credit file wise there is no real difference between an IVA and Bankruptcy, the former you pay for up to 6 years, with quite a strict budget, its a long time especially if your circumstances change.

    Bankruptcy is usually over in 12 months, after which you are discharged, but your file is still marked for 6 years.

    You may or may not have to make payments to your bankruptcy, it`s likely you will if you can afford IVA payments, so a potential IPA (income payment arrangement) for usually up to 3 years.

    So its a toss up between 3 or 6 years repaying that money.

    After 6 years your file will be clear of either arrangement, the only downside is bankruptcies are shown in the London Gazette forever, if that`s not an issue, then basically its your choice.
    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-letter
  • fatbelly
    fatbelly Posts: 20,835 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    Options
    If you have no asset to protect then I'd go for bankruptcy as it has two advantages:

    1. Payments from surplus income last three years rather than five
    2. Bankruptcy can't fail whereas an IVA would do if your surplus dried up.
Meet your Ambassadors

Categories

  • All Categories
  • 344.3K Banking & Borrowing
  • 250.5K Reduce Debt & Boost Income
  • 450.2K Spending & Discounts
  • 236.5K Work, Benefits & Business
  • 610K Mortgages, Homes & Bills
  • 173.6K Life & Family
  • 249.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards