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.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.
IVA advice please

Helloadviceplz
Posts: 25 Forumite

in IVA & DRO
Hello everyone,
I am in £40k debt (loan and 2 cc). I earn enough to cover the repayments each month but only just and I am left with not much to live with. If I continue it would all be paid in five years. I'm a shared ownership homeowner (75% share). I live with my partner who owns his own place too which he rents out. We would like to buy a house together probably in less than five years and possibly have a baby (fingers crossed).
I have been advised by Stepchange and others that an IVA is my best option, because even though I am covering the debt repayment, the interest is a lot and I am also only just affording and unable to save a penny each month. Mortgage wise, we could hold out for six years and hope I can get on a mortgage too, or my partner gets the mortgage and my house sale supports until I can go on the mortgage too.
The main advice was, just because I can just about pay the repayments, doesn't mean I am not struggling. And also, my credit rating is so low now anyway because of the amount of debt and the fact I wont be able to get out of it for five years - an IVA would allow me to have more money over the five/ six years and then my credit rating will go up anyway around a similar time anyway if I didnt get it. And thats only IF I can afford to the repayments for five more years.
My concerns are the following:
- If I get an IVA I would be able to save a bit of money each month which is great, but how much is to much savings until they ask for it?
- If we do go for a mortgage will this impact my partner even if I dont go on it?
- Can I sell my house before the IVA is over?
I'm currently leaning towards getting the IVA because I want to live more comfortably for the next five/ six years.
Any advice would be really appropriated.
Thank you!
I am in £40k debt (loan and 2 cc). I earn enough to cover the repayments each month but only just and I am left with not much to live with. If I continue it would all be paid in five years. I'm a shared ownership homeowner (75% share). I live with my partner who owns his own place too which he rents out. We would like to buy a house together probably in less than five years and possibly have a baby (fingers crossed).
I have been advised by Stepchange and others that an IVA is my best option, because even though I am covering the debt repayment, the interest is a lot and I am also only just affording and unable to save a penny each month. Mortgage wise, we could hold out for six years and hope I can get on a mortgage too, or my partner gets the mortgage and my house sale supports until I can go on the mortgage too.
The main advice was, just because I can just about pay the repayments, doesn't mean I am not struggling. And also, my credit rating is so low now anyway because of the amount of debt and the fact I wont be able to get out of it for five years - an IVA would allow me to have more money over the five/ six years and then my credit rating will go up anyway around a similar time anyway if I didnt get it. And thats only IF I can afford to the repayments for five more years.
My concerns are the following:
- If I get an IVA I would be able to save a bit of money each month which is great, but how much is to much savings until they ask for it?
- If we do go for a mortgage will this impact my partner even if I dont go on it?
- Can I sell my house before the IVA is over?
I'm currently leaning towards getting the IVA because I want to live more comfortably for the next five/ six years.
Any advice would be really appropriated.
Thank you!
0
Comments
-
I would urge caution when considering an IVA you say you can manage the payments, so your IVA payment would be a similar amount to what your paying now, also any windfall, bonus, overtime, money from the sale of a house, would have to be paid to your creditors, this means that you would likely repay the full 40k, plus up to 9k in fee`s to the IVA provider, you should also be aware that this is a form of insolvency, and you will appear on the insolvency register for 6 years.
If you can continue to make the current payments, then I would do so, don`t buy into the IVA idea, it will cost you a lot more in the long run, defaults etc don`t ever have to be declared, but insolvency does when applying for a mortgage/insurance whatever it might be.
If things are tight financially, try cutting back elsewhere in your budget, think long and hard about this before you make a decision you may regret.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-letter0 -
Declaring an insolvency will harm your mortgage situation, depending on what the exact question is. Sometimes it's are your currently in an insolvency agreement, sometimes it's have you ever been insolvent? Similar questions are asked for other services and employment vetting.
It will stay on your credit record for 6 years and in your situation, you could well end up paying more than you currently owe. And IVA budgets are tight and get squeaky by year 5.
Much better to head over to the Debt free forum and fill in a Statement of Affairs (SOA), see sourcrates' signature for the link.
If you've have not made a mistake, you've made nothing0 -
Thank you very much for your replies. i'm wondering if my mortgage situation would be harmed by the IVA - will it not be just as harmed by being in so much debt? If there was a way to have breathing space from the debt to recoup some emergency savings I would do that. Or just to move the loan to reduce interest as well but that doesnt seem possible.. I feel very lost and conflicted with what to do.0
-
It does not sound to me that an IVA would be at all sensible. It does sound like someone wants their IP fees.
You are not insolvent, just struggling a bit, and will clear your debts in 5 years
You want to save on the side but an IVA does not allow for this. You would also have to release equity in year 5, or do another year
You want to get a mortgage in less than 5 years. An IVA will be on your file for at least 6 years
But advice above is good - Much better to head over to the Debt free forum and fill in a Statement of Affairs (SOA), see sourcrates' signature for the link.
1 -
@Helloadviceplz
You need to start a new thread on DFW on a separate topic, not rehash the IVA issue. Complete the SOA and post that up there, for advice on clearing these debts.If you've have not made a mistake, you've made nothing1 -
Thank you so much. I think you may have saved me from making a bad decision. The issue I have is clearing the debts and managing my money better. Thank you I will start a new thread topic to ask for advice about the debt.
Thanks again.0 -
Sorry @RAS can I ask where this thread is and do i post my SOA results in the thread? Thanks0
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 348.4K Banking & Borrowing
- 252.1K Reduce Debt & Boost Income
- 452.4K Spending & Discounts
- 241K Work, Benefits & Business
- 617.4K Mortgages, Homes & Bills
- 175.7K Life & Family
- 254.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 15.1K Coronavirus Support Boards