IVA help

ryan008

Hello, I have around 23k of unsecured debts, mixture of bank loans, mobile phones etc, had the larger bank loans setup with Moorcroft for couple years at reasonable re payment rates but having more debt was stressing me I’m 28 don’t own house live with parents.

I came across payplan seemed extremely helpful gave all my figures etc, it went to a meeting for an IVA and it got approved was told this was for the best. They were extremely pushy (payplan) responded to me super quick at the time wanting me to sign things very quickly. Now I can barely get a reply!

I accepted it and my first payment isn’t till end of this month I’m having very strong second thoughts it isn’t for me spoken to them yesterday it’s not too late for me to pull out which I think I want too.

is it recommended to setup re payment plans with the debt collection agencies myself as they will have all defaulted by now?

as I have a good job and payplan are trying to take every penny off me. I’m thinking if I could save a lump sum of money and try offer the creditors Individual pay offs instead of an IVA?

thankyou for any help 

RAS

Hi, firstly stop the IVA payments and agreement. Am really surprised Payplan pushed you but this really unlikely to be the best option for you. They are suitable for people trying to protect an asset like a house and generally for those with more that £30K in debt.

Then speak to Stepchange, National debtline or CAB. Will come back with the links as there are some fakenames out there. For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.

They may suggest a Debt Management Plan (DMP) or a Debt Relief Order depending on your fuller financial details.

You will need to sort out your Statement of Affairs anyway, SOA Calculator (lemonfool.co.uk)

Then you can get an idea of what might be the best option.

sourcrates

I agree, unless you're a homeowner, an IVA will not be the best choice for you.

RAS covers the basics above, I would strongly recommend you withdraw from the arrangement while you still can.

You can set up whatever payment arrangements are beneficial to you with whoever you choose.

ryan008

Many thanks for the replies, guess partly my fault too jumping straight into it thought it was easiest way out. I certainly will cancel and look into a DMP. With regards to a DMP will I have to use all my spare money? Or just pay a reasonable amount? As I’ve been extremely put off from IVA with how restrictive it is. 

RAS

IVA allowances are tight; DMPs tend to be kinder AND if SHTF, you can halt a payment for a month.

But you won't get £200 per month for entertainment in either case.

And if you do a DMP, please don't set it up immediately. You'll get arrangement to pay markers on your credit record, which stay on your credit file for 6 years AFTER the last payment.

Stop paying totally, get the debt defaulted to freeze the interest and fees. Then start making payments, and the debt falls of your credit record 6 years after the default.

ryan008

Ok thanks makes sense, I’ll setup each one once defaulted and make sure all frozen then maybe in year or 2 I’ll ring each one and make some offers. Glad I came here!

RAS

And once you stop paying, you need to transfer the money you would have paid into the DMP into an emergency fund until you start re-paying. You can't get credit and you need a backstop in case you have a real emergency, like illness or job loss. 

Even IVAs and DMPs allow a small emergency fund payment each month, so keep it topped up.

ryan008

Ok thanks, so really setting up individual payment plans with the debt collection agency once default is most less restrictive way? Then I take it most creditors will accept an offer for a final payment.

sourcrates

If you do it yourself there are no rules whatsoever.

It`s only if you opt for a debt charity to run it for you, that some slight restrictions will apply.

ryan008

Just becuwse payplan are saying I’ll be made
bankrupt however I have previously been woth
moordroft for 4 different debts around 11k paying a re payment each month with no issue!

sourcrates

ryan008 said:

Just becuwse payplan are saying I’ll be made
bankrupt however I have previously been woth
moordroft for 4 different debts around 11k paying a re payment each month with no issue!

You "could" be made bankrupt, you "could" also win the lotto.

It`s possible, but very unlikely, creditors cannot act as a whole, any debt required for bankruptcy must be 5k or over, PayPlan are just warning you of what could happen, not what will happen.

99.9% of the time, accounts simply return to collection activity, after all you have no assets, a creditor can realise, so why waste another £680 relieving you of your debts, not going to happen.