Considering IVA

10past6

Hi

I subscribe to the DMP thread within this site, however, if it's possible can someone explain the pros and cons of an IVA.

I'm on a DMP via Payplan, and have been advised by them to consider an IVA, I've looked at the information available but just cannot get my head round it.

Any information will be greatly appreciated.

dalip

I will try but i am no expert!With an IVA they(cab,ip's ect)look at any excess income and offer all your creditors a % in the pound back over a 5 year period.At the end of the 5 years whatever is still owed is written off.In order for an IPA proposal to be accepted 75%(i think but the law is changing soon to a lower %)of your creditors must accept it.The usual % offered is about 25% but have seen articles reporting that creditors are getting tough on this and upping the %. As far as allowances are concerned bc(or the OR to be precise)is far more generous allowing for things such as haircuts,xmas ect than an IVA. Hope that is of some help. I was going to do an IVA but did not earn enough(for my amount of debt)for it to be accepted so went bc and so glad i did now!:D Dalip

debt_doctor

Hi,

The DMP you are on at the moment is a method of paying back your debts at a reduced monthly amounts over a longer period. It is designed to pay all of the debt back. A DMP is binding in " honour only", any creditor can take further action against you at any time.

An IVA is a legally binding agreement with your creditors to pay some or all of your debt back, usually over 5 years. If you are a property owner you may well be required to release equity in your property in the final year ( 75% of the equity when you start the IVA )
If the IVA fails then you may be declared BR by your IP but this is unlikely.

Bankruptcy is often a better and far cheaper option.

You need to go to a debt charity to consider your options. Do not take the advice of Payplan alone.

Best,

DD

10past6

debt_doctor wrote: »

You need to go to a debt charity to consider your options. Do not take the advice of Payplan alone.

Best,

DD

Hi DD

Interesting how you mention about seeking further advice, I was going to take Pay plan's advice.

tbh, I suffered a nervous breakdown previously, I find all this quite stressful, one of my creditors has stated they are seeking legal action re a charging order, as the length of time to repay back my debt is unacceptable, i.e. 15 years, they have also refused the monthly offer from Pay plan.

Dalip, thank you for your advice.

fermi

I agree that a second opinion is a must.

An IVA is a serious undertaking, and you really need to get confirmation from another advisor/agency that it is youy best option.

PayPlan [strike]were[/strike] are normally good, but for my own peace of mind I would want that advice backed up from somewhere else.

Also have a look at Martin's guide to IVA's: Guide to IVA's - Are they worth it?

10past6

fermi wrote: »

IAlso have a look at Martin's guide to IVA's: Guide to IVA's - Are they worth it?

Thanks fermi, that's a great start.

Toon_Dave

hi 10past6.

good luck with what ever you decide. but certainly getting as much advice from differnent non-profitable organisations like the CAB or CCCS is a must as they are looking at whats best for you and not the creditors - which i expect may be some of what pay plan could be doing.

I also believe that even after an IVA, the Creditor can ask for it to be extended and can even then force a BR order if they arent happy at the terms so they get more back (this isnt as common) but as Fermi said look at martins guide it is a great source of advice.

Good luck and hope all goes well.

Dave. X

svrider28

Hi 10past6,

If I were you I would do some serious research first to see if an IVA is the right option for you. My OH and me took out an IVA in October last year without looking into it properly (we panicked really) and we are still finding it almost impossible to keep up the monthly payments. Our joint debts were £62K ( I know........I'm not proud of it!) and our monthly repayments are still £540. We are even now considering BR as a more viable option, the company we went through take £50 a month out of the repayment as a fee and we only found out when it was set up that IVAs are available as a free service elsewhere.

Look into it and consider all the options!!!

Best of luck

Toon_Dave

svrider28 wrote: »

Hi 10past6,

If I were you I would do some serious research first to see if an IVA is the right option for you. My OH and me took out an IVA in October last year without looking into it properly (we panicked really) and we are still finding it almost impossible to keep up the monthly payments. Our joint debts were £62K ( I know........I'm not proud of it!) and our monthly repayments are still £540. We are even now considering BR as a more viable option, the company we went through take £50 a month out of the repayment as a fee and we only found out when it was set up that IVAs are available as a free service elsewhere.

Look into it and consider all the options!!!

Best of luck



Thanks for the post SVrider.

i too have been looking at the options of IVA's V BR. i think your comments may help many make a decision as the IVA system is designed to assist people but it does appear that most who take one out are unhappy and in a worse situation. Ultimately many i have spoken to have then been forced in BR or decided on it a short time after.

The £50 pm charge seems to be common, some actually require full payment upfront 4-6K in some cases before will instigate the IVA - if i had those funds wouldnt i have paid the creditors myself before now!??

Im sure it works for some people and everyones situation is different.

Thanks again for putting your comments on screen for 10PAST6.

Dave.:T

bentalls

As above! I entered into an IVA with a fee-based company - biggest mistake I could have made... IVAs are not suitable for everyone, I don't think I should have been on one, I don't have any property or assets, but that is indeed another story! If you decide that that IS the way you want to go, please please please go to one of the FREE companies. That way, you will be paying more to your creditors...My first year's payments have all gone on the IVA company's fees - a total waste of time and money. Keep your options open, don't limit yourself, and do your research - I wish I had...
Good luck!

fermi

bentalls wrote: »

If you decide that that IS the way you want to go, please please please go to one of the FREE companies. That way, you will be paying more to your creditors...My first year's payments have all gone on the IVA company's fees - a total waste of time and money.

They still have to charge fees as you cannot offer an IVA without a licensed Insolvency Practitioner overseeing it.

However, companies like CCCS will only recommend one if it is in your interests, and they will not take the proverbial p*** with the fees in the way that many of the big IVA "factories" do.