IVA.....any good?

Question

I have seen a lot of adverts for I.V.A's on telly (UK only i think). like most other 30 somethings have a certain amount of debt. This sounds good but does anyone know the downside to this? There must be a catch, or somthing the ad's are not mentioning.

Answer 1

The answer above is correct. For the right situation an iva is a good thing , not quite as damaging as bankrupcy, no loss of home car etc, but no credit , and could take up to eleven years to get it back, but then if you reach the point of wanting an iva you should not want any credit.
I am in one and it is the best thing I ever did, dont go with the ones on the telly they are iva factories and are looking to make money and an iva needs to be proposed by a good insolvency practioner. Look at iva.com they give reviews on companys and ones in your areas look at iva.ukorg I think the forum answers any questions you ask and some are IP,s on there. You do need £15,000 debt at least and best to have more than four creditors, if you look for the info you will understand why , it depends on a creditor vote and you need 75% acceptance if you have only a couple they can each scuttle the iva , as they hold majority vote.
If you have no assets bankrupcy is also an option, you would normally be discharged within a year, and may have to make some payments for up to three years , but are given a reasonable living allowance before this is decided, also depends on your job, some are not allowed bankrupcy, check your contract. Bankrupcy will cost you £485 to file and the forms can be got online . Look carefully at your situation and decide your best route. In either case you need to be insolvent, have more going out than you have coming in after reasonable living costs. Both will protect you from creditors they cannot contact you once either is in force.

The final option a dmp debt management plan, but you need to be able to pay the debts in a reasonable amount of time but can be useful if going through a bad patch money wise.





Hope that helps.

Answer 2

Some of the answers already given seem to mix up IVA's and debt management plans. Although there are similarities they also have a number of differencies. For example its not possible that an IVA will last ten years as has been suggested.

An IVA can be a good solution to your debt problems providing you fit the qualifying criteria. Generally to qualify you will need to owe a large amount of money (greater than £15000) divided between more than one creditor and you must have a regular income.

Under an IVA you commit to making one monthly payment for a fixed period of time at the end of which all remaining unpaid debt is written off. The size of your monthly payment will be based on what you can reasonably afford on you current income. The maximum length of time of an IVA is seven years although in the majority of cases they will last five years or less.

An IVA is beneficial to you as up to two thirds of your debt may be written off. It is also good for your creditors as the returns are often greater than would be the case if you were to be made bankrupt.

Your other options are bankruptcy or a debt management programme. However these options have both good and bad points.

The first thing you should do is speak to a professional advisor either at the CAB or at one of the many other organisations that offer free debt advice. If the people you speak to start talking about paying any fees upfront just put the phone down and call someone else.

Answer 3

An IVA is a formal County Court Judgement, you would not be able to take any further credit whilst the IVA was in force without approval from the IVA supervisor, also it would stay on your credit file for upto 5 years after final completion.

If you are a homeowner and there is sufficient equity in your property even to offer part settlements to your creditors then you might wish to consider settling yourself before going down the iva route.

Answer 4

IVA's go on your credit file and will be seen by creditors even after the arrangement has finished and will affect your ability to get credit in the future. Also be careful as most companies offering this service exploit people by taking fees out of your payments to them!

I would recommend trying a debt management plan instead, contact payplan www.payplan.co.uk. They do not charge for their services and write to all your creditors for you. I have been with them for a year, it has made such a difference!

Answer 5

There a number of 'not for profit' (aka 'free') advise ones you should check out first .. get some good advise on how to do most of the work yourself.... but be warned 'not for profit' does NOT mean they won't charge you !

Try your loacl CAB (Citizens Advise) .. they should be able to put you in contact with the Government IVA advise line ..

ALL the ones on TV etc. charge you an arm & a leg ...
TV ads are not cheap - nor are the armies of employees you see working away in the background .. 'we have XXX (number) of Legal Experts to handle your case' ... yes, and qualified Solicitors who are recognised Legal Experts charge up to £250 PER HOUR for their work !

HOWEVER some of the more 'professional' ones will be able to convince Debtors to accept a lot LESS than you might be able to on your own

Watch out for the cowboys == they focus on 'reducing your payments' but never mention what the final cost is going to be = all they do is EXTEND the length of time you are paying back... so your payments might be "reduced" from £1000 a month for 3 years (total cost £36,000) to £500 a month for 10 years (total cost £60,000)

If you have good negotiation skills == do it yourself !

If not, then you have to make a judgement call =
= first have you found a professional IVA company or have you been sucked in by the cowboys with the best adverts ? and
= second, will they be able to save you enough money to cover the costs ?

Answer 6

I actually set up an IVA.The company said they would contact all of my creditors to stop them hassling me for money.

I paid the IVA Company for about 4 months and they did absolutley nothing,they did not contact 1 company.I have now been advised by a friend to try the ne run by the government