IVA - Advice, concerned parent

Hi and thanks for accepting me into the group.

My 22 year old son lives at home with us, he’s got himself into debt and unfortunately due to work circumstances we’re unable to help him financially at the moment. Having grown up conversations with him is near impossible because at that age, he knows everything, added to he’s slightly autistic. 

My concern is that I’m not convinced that an IVA is right for him we think he owes around £7k (according to him but not entirely sure)  he’s been in touch with one firm who’ve told him there are no fees, from the little I’ve read I can clearly see that there are fees but he won’t listen, I spoke briefly with the organisation he was dealing with and asked them to make sure they explain everything properly to him.

I suppose my question is, is an IVA the right thing to do, surely at 22 he’s going to face issues down the line that will affect him, thinking things like buying a car, getting insurance, possible future rental of his own place? 

I appreciate that he has to do something but is this the right move? I’ve seen fees on the internet which scare me.

Thank you.

Replies

  • GrumpelstiltskinGrumpelstiltskin Forumite
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    One word   NO NO NO   He must not touch an IVA with a barge pole.

    The adverts on social media are made to suck in people like him, young, vulnerable, thinks everything they see on social media is gospel truth.

    There are better and much more appropriate ways round this hold on and you will receive more advice.
    If you go down to the woods today you better not go alone.
  • RsthiswayupRsthiswayup Forumite
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    One word   NO NO NO   He must not touch an IVA with a barge pole.

    The adverts on social media are made to suck in people like him, young, vulnerable, thinks everything they see on social media is gospel truth.

    There are better and much more appropriate ways round this hold on and you will receive more advice.
    Thank you so much. 
  • edited 2 September 2022 at 9:50AM
    RASRAS Forumite
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    edited 2 September 2022 at 9:50AM
    The fees for an IVA are typically £9k. They are generally good for people who have an asset to protect (house, Dali painting) and owe over £30K. It is quite possible your son would actually end up paying more than he owes if his situation improves over the next 6 years.

    IF your son really insists that he wants an IVA, then he'd be best doing one via the debt charities Stepchange or National Debtline, as their fees are lower.

    However, if they went through his situation with him, they might suggest either a DRO (another insolvency option with a £90 one off fee and a one year time-line) or a free DMP, in which he gradually re-pays his debt?

    For free debt advice, contact either : StepchangeNational DebtlineCitizensAdviceBureaux. (Thanks to sourcrates for the links.)

    Also most of others are just a sales persons selling on contact detail to insolvency practices for commission.
    The person who has not made a mistake, has made nothing
  • edited 3 September 2022 at 5:58PM
    sourcratessourcrates Forumite
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    edited 3 September 2022 at 5:58PM
    Oh good gracious NO, please talk to the lad, other posters have covered this, but it`s worth repeating.

    IVA`s were designed for homeowners who had massive debts, and for obvious reasons could not go bankrupt, they are suitable still for homeowners, but not under many other circumstances.

    Your son`s debts can be managed much better using other tools, a DRO or debt management, but not an IVA.

    The problem with IVA`s is that regulation leaves a lot to be desired, so basically any IP can sell you one, no matter if it suites your circumstances or not, they make good money from the monthly fee`s you see, which are included in your repayment, a 7k debt would attract more in fee`s than what would eventually be paid to the creditors.

    Get him to talk to one of the free debt charities, if he goes through with this IVA, he will seriously regret it, many of those who sign up to them, have no clue how they really work.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • NeverendingDMPNeverendingDMP Forumite
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    I agree IVA bad idea..I'm not as knowledgeable on them as the folk who have posted already but I must say all enquiries I made about one subjected me to a hard sell from someone who said they could cure my debts and they all sounded like I would repay my debts and then some in fees.  Stepchange recommended bankruptcy for me but a dmp although longer meant I could stay in my mortgage that was far less than local rents.
    I would say ring the charities, encourage seeking advice from them and then decide. Easier said than done I know if your son's mind is set to what he thinks is best. 
    With regards to credit rating it will be affected whatever action he takes.its just part of the process and although frightening at first it's what most of us have gone or are going through and it can be dealt with.
    Does he definitely need to take action or is there a way he can knuckle right down. Either way if you can persuade him onto the forum he will be given a bit of help along the way.


    Joint debts 35,213 - Jan 2018, Debts -just my name now are 8542 -Feb 23Mortgage Jan 2018 was 77224, 72267 remaining
  • SusieTSusieT Forumite
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    I would agree and tell him to run away as fast as possible. He has nothing to protect, small (relatively) amount of debt, the no fees is bulls excrement. 
    Tell him that the fees will be more than he currently owes, and that the best people to talk to are debt charities and NOT the sales people who will get him into more debt.
    Credit card debt - NIL
    Home improvement secured loans 30,130/41,000 and 23,156/28,000 End 2027 and 2029
    Mortgage 64,513/100,000 End Nov 2035
    2022 all rolling into new mortgage + extra to finish house. 125,000 End 2036
  • fatbellyfatbelly Forumite
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    There should be a minimum debt level for an IVA and if there was one it would be more than 7k!

    An IVA is insolvency for someone with an asset to protect and if he doesn't have one then bankruptcy with its £680 fee would be preferable. 

    But in his case it's more likely that if he talked to one of the respectable charities (CA, Stepchange, National Debtline) they would recommend a Debt Management Plan
  • edited 3 September 2022 at 4:38PM
    SusieTSusieT Forumite
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    edited 3 September 2022 at 4:38PM
    fatbelly said:
    There should be a minimum debt level for an IVA and if there was one it would be more than 7k!

    This would be a VERY good move by the authorities, and would stop a lot of the people getting into the clutches of the unscrupulous IVA sales people
    Credit card debt - NIL
    Home improvement secured loans 30,130/41,000 and 23,156/28,000 End 2027 and 2029
    Mortgage 64,513/100,000 End Nov 2035
    2022 all rolling into new mortgage + extra to finish house. 125,000 End 2036
  • sourcratessourcrates Forumite
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    SusieT said:
    fatbelly said:
    There should be a minimum debt level for an IVA and if there was one it would be more than 7k!

    This would be a VERY good move by the authorities, and would stop a lot of the people getting into the clutches of the unscrupulous IVA sales people
    Unfortunatly Government are a tad busy dealing with the election of a new Prime Minister, the cost-of-living crisis, war in Ukraine, a drought, and whether Liz truss will keep BOJO`s decor in the number 10 flat or not.

    Changes to IVA`s at the Ministry of Justice are a long way down that list at present.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
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