Recommended IVA

Financefairy

Good morning, 
Firstly I would ask that you don't judge, I am fully aware I have made some very silly mistakes when it comes to my money and I am now trying to get on top of them. 

I have just had a call with Nationwide Partners who after going through my debts with me have recommended an IVA.  I currently owe £15k in unsecured debts across loans, credit cards and store accounts.  I live in a rented property and earn a very good wage but due to a never ending cycle of overspending and not budgeting I've always ended up with more month left than wages. 

I wasn't raised in a household that budgeted and was actively encouraged to take credit cards and loans, its only been the last few years that I've realised that this isn't the way everyone lives and being in constant debt isn't normal. 

The lady I spoke to on the phone was really nice and not judgemental at all, but after doing some research myself I'm still unsure if an IVA is the way to go.  She assured me that I would only be paying back what I owe and there are no hidden fees (I've read some horror stories about this).

Can anyone give any advice or has dealt with this company before and can assure me they are all above board or have some positive stories about IVA's.  Currently with juggling all my debts I'm borrowing what I clear each month and can't really see an end to it. 

I've already downloaded a budgeting spreadsheet and added in my salary and outgoings, so I feel in a slightly better position today, than I did yesterday.  I've also ready that many money splitting into envelopes helps!

At this moment in time I'm looking for any advice that can help!

Grumpelstiltskin

Two quick words barge and pole.

The lady would be nice she is a salesperson and will probably get a commission, she has lied to you about fees, the IVA company take their fees ( could be £10K ) before any debt payments are made.

Go across to the Debt Free Wannabe board for the best advice about your situation.

Financefairy

Thanks for your reply, I will repost on the other board. 

The response I got when I asked about fees for setting up the IVA was below:

"No there is no charge at all in addition to your monthly payment - you don't pay any fees at all - the creditors agree to pay them as part of your IVA"

Is this not correct then? I ask as I don't want to end up owing more than I already do.

RAS

You could phrase it that way, weasel words.

The creditors agree a reduced settlement for which you pay a monthly figure.  The IVA provider takes their fee out of your monthly payments, sometime until they've got their full whack, and then they send the remnants to your creditors. Fees are £4k (Step change) to £10k and most involve a kickback to the introducer.

If you've responded to an advert or social media, then you've spoken to the sales person who gets their commission. 

A third of IVAs fail and you'd end up owing as much as you did in the beginning because all you've paid off are the fees. They are inflexible and if you end up on a higher salary, get an inheritance or redundancy etc, you pay your full debt and the fees.

An IVA can be good for someone owing more than £50k owning a house with a stable income. It also has to be declared if you are asked if you've ever been insolvent.

Go over to the debt forum, look at DMPs and affordability payments. The last of the stickies has a link to the SOA, so we can help you.

Financefairy

Thank you so much, that makes much more sense to me now as something didn't quite sit right with the reply from them.  I'm fully aware you don't get something for nothing so thought there had to be a catch. I'm so glad I've not actually signed anything yet and wanted a bit of thinking time. 

I'd read a few reports of people wanting to settle early and ending up paying back more than they owed to start with and couldn't work out why. I now see this would be because you owe your debt plus the fees owed. I'm trying to get out of debt not add more to it! 

I'll hop over to the DMP board and take it from there. 

Thanks so much for your help!