Considering IVA

Yaaadwubi

I have a debt of £25 and for the past year I have earned £2k or less monthly. I don’t have a home and going back to school full
Time in September. I don’t owe a home and am considering an Iva at the moment . Can I be advised please ? 

My debt is mostly from credit and store cards as I lost my job a few months in 2018. Also once am a student I can’t work as much to earn that amount of money am earning now . Maximum I can work for will be £200 weekly if I get a job . Please advice me . Thank you 

elsien

Have you spoken to one of the free debt charities such as Stepchange?
You don’t want to go with any advice from a company who charges you for the privilege of setting anything up.

Can you confirm your debt amount - I’m guessing the £25 is a mistake? Did you mean 25K?
For what reasons were the debts run up? 

Yaaadwubi

I have spoken to ukcitizens debt advice and they advised Iva . The debt is 25K thank you .
the debts run up because I was out of work. And then went into full time education. I came to work because I was struggling mentally with covid and now I feel I can go back to education 

elsien

I’m no expert, you need to wait for the people who know more about it than me, but my understanding of an IVA is that you need a certain surplus to take one on. Did you discuss what would happen in September when your income drops right down? 

Yaaadwubi

Yes I did and they said I should go ahead with it . But shouldn’t mention to the insolvency group. This was advice from charity organisation that they need the Iva to be approved and then they will carry on from there 

elsien

Can you link to the people you spoke to? 

@fatbelly, can you advise? 

Sonic101

Hi there 

Unless you are a homeowner or have  assets to protect, an IVA is probably not the best solution for you. 

You’d be paying all of your disposal income for five years, and in terms of affecting your credit rating, an IVA is as bad as bankruptcy; even if you went bankrupt and were deemed to have a disposal income, you’d only be paying towards the bankruptcy for three years.

I don’t know of the organisations that you’ve spoken to, but many of these companies have a vested interest in getting people into IVAs because they make a profit from them - in an IVA, much of the money you pay goes to the IP/organisation running the IVA. 

I would strongly recommend that you contact any of the below organisations, who are ethical and will give you good,  impartial advice on the best debt solution for you:

National Debtline: 

https://www.nationaldebtline.org

StepChange:

https://www.stepchange.org

Citizens Advice Bureau:

https://www.citizensadvice.org.uk

PayPlan:

https://www.payplan.com

Good luck!

sourcrates

IVA`s are meant for homeowners with massive debts, who cannot go bankrupt because they have a house to protect, if your not in that category, then look elsewhere.

There is very little in the way of regulation where IVA`s are concerned, because of this they are mis-sold on an industrial scale, due to the fee`s that are charged for the setting up and running of your arrangement.

If you have no assets, and have 25k of debt, then look at debt relief order or bankruptcy, as the way forward.

Dependant on your circumstances, debt management may also be an option, but forget IVA.

Yaaadwubi

I won’t qualify for debt relief order and I have Been told by charity organisation bankruptcy is too harsh a decision . They have however explained if the Iva fails they will look at bankruptcy . Thank 

Yaaadwubi

I have contacted step change and payplan. The online step change suggests bankruptcy. I spoke to someone and he said IVa . I spoke to payyplan this afternoon and they also suggested Iva and if it fails then I should look at bankruptcy 

sourcrates

Yaaadwubi said:

I won’t qualify for debt relief order and I have Been told by charity organisation bankruptcy is too harsh a decision . They have however explained if the Iva fails they will look at bankruptcy . Thank 

Why won`t you qualify for a DRO ?
What reasons were given ?

You need a regular income for an IVA, your not working, or working erratically, so that option is off the table straight away.

If you miss a payment on an IVA, it has to be made up again, the same with any kind of arrears, this is one reason why IVA`s have such a high failure rate, in your situation you would be making your position possibly worse than it is now by choosing an IVA, please listen, I have been there, I know exactly what I`m talking about here.