How bad is an IVA?

deltofe93

My creditors have a meeting at the end of the month to discuss my potential IVA.. I've used Creditfix but I hear others prefer stepchange? 

I owe around £13k on credit cards. I have been paying min. payments to my cards but interest / transfer charges were bringing me down and feel like money is constantly flying out of my account. I've just turned 30 so as I enter a new decade and almost new year I want to get myself straight. 

I'm in no position to be buying a house - not sure if I ever will tbh.  

Is the IVA on the credit file 6 years after it has been 'completed', so 11 years in total or is it from the date it starts? (i.e. 1st Jan 2024-1st Jan 2030). 

I am currently single, but I do worry about meeting someone, getting in a relationship and eventually having to discuss our credit history and I already feel so embarrassed I've allowed myself to get in this situation. Has anyone else experienced this? I know how important financials are in a relationship when you get serious. 

I was so good financially during covid - I really have difficulty saying no to social situations, plus car problems and now I have landed in this mess. 

Any help / advice / similar experiences welcome. 

caprikid1

Sorry but how have you managed to go from 8K in savings to 12k in debt in 12 months?

deltofe93

I paid off my debts from last year, and was charged withdrawal from my ISA. 

I was living with my ex's parents so had more disposable to save. We had a rough break up (DA) and had to move back home (to London) and finances were the last thing on my mind. :-( 

Plus - getting credit became too easy.. 

Brie

Have you looked into doing a Debt Relief Order instead?  If you have just the £13k of debts that's one box ticked (must be less than £30k), not a home owner (tick) and that just leaves not having assets over £2k and the same again for your car (a separate £2k max).  And not having enough money left at the end of the month to make payments to your creditors.  

With a DRO you just have to tick along for 12 months and it drops off your credit history 6 years after that (so 7 years total)

When I'm talking to someone in your situation they often express concern about how the debt affects their children in particular.  I always point out that they are setting a good example if they face up to their situation and work to get out of it.  Children (& new partners) should be kept in the loop so they can provide support and understand that there's a good reason why that new whatever, that holiday isn't possible.  Any new partner that might make fun or otherwise not be supportive and understanding of the struggle aren't someone to hang around with.  

fatbelly

I think it's ridiculous to do an IVA for 13k of non- priority debt. Particularly when you are not a homeowner.

You are nearly too late to back out now. The end of the month is 12 days away

If you do us a statement of affairs we can advise

https://www.lemonfool.co.uk/financecalculators/soa.php

Martico

Have a read of this thread, which outlines why an IVA is almost certainly the wrong option for someone with <30K in non-priority debts (and without significant assets to protect)

deltofe93

Brie said:

Have you looked into doing a Debt Relief Order instead?  If you have just the £13k of debts that's one box ticked (must be less than £30k), not a home owner (tick) and that just leaves not having assets over £2k and the same again for your car (a separate £2k max).  And not having enough money left at the end of the month to make payments to your creditors.  

With a DRO you just have to tick along for 12 months and it drops off your credit history 6 years after that (so 7 years total)

When I'm talking to someone in your situation they often express concern about how the debt affects their children in particular.  I always point out that they are setting a good example if they face up to their situation and work to get out of it.  Children (& new partners) should be kept in the loop so they can provide support and understand that there's a good reason why that new whatever, that holiday isn't possible.  Any new partner that might make fun or otherwise not be supportive and understanding of the struggle aren't someone to hang around with.  

Re the DRO - my car is worth just over £2k according to online vehicles of similar makes and models so I wouldn't be eligible.  

And I do have a horse. She's not worth much but her monthly expenditure is. I tried putting her up for 'loan' but no one was interested. I know I sound ridiculous as a horse is a luxury, but selling is not an option, she has dragged me through the hardest moments this year and I would be severely depressed without. 

sammyjammy

I understand the horse situation, have you considered a DMP?  You really shouldn't go for an IVA.

Grumpelstiltskin

How did you find Creditfix?  An advert on social media? They promised the earth?

You need to back out NOW They wouldn't tell you an IVA would be the worse thing to do in your circumstances, why?  Because f the fees they would get for an IVA would be the only thing they were looking at, no consideration of what would be best for you.

A DRO if possible or failing that a DMP are much better ways forward

deltofe93

The reason they suggested an IVA was because lenders weren't guaranteed to agree to a DMP, and can still add interest charges over the course, and that they can still come after you legally even with the DMP in place. 

Grumpelstiltskin

deltofe93 said:

The reason they suggested an IVA was because lenders weren't guaranteed to agree to a DMP, and can still add interest charges over the course, and that they can still come after you legally even with the DMP in place. 

Of course they would say that, like I said all they are interested in is their fees.

I mean pigs might fly, just about the same chance of a creditor not agreeing to a DMP and in fact they would easily accept what you can pay them, they are not going to refuse money.

Please don't fall for this carp they try and spin.