IVA advise

[Cantthinkofonenow]

Hi all, I wasn’t sure where to post this.
I rang step change today, I have 6k debt and don’t have a lot of money so I’ve been struggling for a long time so finally gave them a call. They advised me to get an IVA, there were other options but they weren’t appropriate. Has anyone got any experience with an IVA? I was on the phone to them for a good 2 hours going through everything and they gave me lots of information but I’ve read other threads on here about people being against them.
I’ll have to pay £100 a month for 6 years, this is a much more manageable option for me and my credit score is ridiculously low at the minute anyway so I’m not worried about that. What have your experiences been like?

Hi OP, aside from the credit score issues that come with an IVA (which last 6 years, so worth considering seriously), there’s the fact that with an IVA your non-essential spending is restricted so that means no holidays, no eating out, no buying luxuries, you need to ask permission if you want to buy something and have regular meetings with full financial disclosure- it’s really very invasive and restrictive.

Really? This was never mentioned

Have a google and do some research yourself before you make any decisions. It’s certainly not something to go into blindly, if it’s your best option then that’s what you will have to do but it is very invasive and entering an IVA means agreeing to a strict set of rules on spending.

You also have to pay to enter an IVA, on average that costs about £5000ish. Some practitioners you have to pay upfront, some will deduct from your monthly payment (but means payment will be higher), you can get quotes on prices for your situation.

Most IVA’s have a windfall clause so if you got a bonus at work, an unexpected inheritance, you’d have to pay that amount, you can’t keep it. If your income increases then you have to declare that, and your payments will be adjusted.

You’re not able to just apply for further credit during your IVA either, again, you need permission. Whether that’s for a sofa or a car, you need permission.

Details of your IVA are also on a public register.

As I say if it’s your only and best option then go for it, but make sure you understand fully what it is first.

Are you sure? I had never heard of that when I looked into it.

Yes, positive, have a look online and you can read over the info.

Op I’m surprised they suggested that. An IVA is really a form of bankruptcy if you have an asset such as a house to protect. However whatever debt solution you go for will involve you in not taking any more credit until the situation is resolved. I would give national debt line a call to see what they recommend and also read up your self on debt solutions from the citizens advice website.

Look into a debt management plan if you really can't afford the payments. This is less destructive than an IVA

I spoke to them and they said that as this is a voluntary IVA they do not do things like look at what you’re spending or anything like that. They only have a yearly review to see if circumstances have changed. It’s not like bankruptcy.
he said as long as I’m paying each month it’s fine. You can’t gamble or anything otherwise the plan ends.

OP was it definitely Step Change? Some other debt companies can be sneaky and have very similar sounding names so you think you're on the phone to Step Change but you're not.

I think you’re misunderstanding. IVA literally stands for “Individual Voluntary Arrangement”, they are all voluntary.

They don’t track things like spending though, is that your experience? He said you could go on holiday as long as the payments are being made.

I signed a form for a call back from step change and then someone called me back.

I work in insolvency. This is absolutely not true. You have completed a budget and will make a payment as agreed per the budget and do annual reviews. Obviously if your income changes considerably your payment might become higher but you can still eat out etc, they have no control on what you spend your money on if you have budgeted for it.

it is true you can't apply for extra credit while in an Iva but the whole point is that you are trying to get out of the cycle of having credit so that shouldn't be an issue

OP was the form online? Do you have a link to the website you visited when you searched? I’d be concerned that you weren’t talking to Step Change as per the PP.

This is accurate. If you have been advised this is the correct solution for you, I'm assuming you have an asset such as a vehicle over 3k, a property or a car on finance. Or a job that disallows bankruptcy. If so, it is likely your best bet and fastest way to become debt free.

if you didn't have any assets you would have been advised to go down the bankruptcy route

This was the number that called 138 1111 0800 138 1111

Sorry sent the number twice

Good, that is the ‘real’ Step Change contact number.

£100 per month for 6 years is £7200. If you owe £6000 this isn’t an IVA. It sounds like a debt management plan with frozen interest. An IVA you normally have a lot more debt (£15k+) and you write a lot of it off after making manageable payments. Eg 70% written off. I’m an insolvency practitioner

So I ended up hanging up on step change because I wasn’t sure about it and they called me back on this number 0800 680 0079

Okay, he kept using the word IVA and said that that my total debts are £6,824 I have to pay everything on my credit file

If you are feeling unsure of the advice you have been given, get a second opinion from National Debtline. Don't call any of the random IVA companies advertised online, they often have higher fees and poor aftercare.

That seems to be an American credit checking firm called TransUnion.

Not sure this is all making sense any more.

Yes this happened to me once. I had a call back after filling out an online form. It then dawned on me as the conversation went on that it wasn't actually Step Change so I ended the call.

I'm in a iva and it's the best thing I ever did, but my debt was much more and I pay £90 a month. I'm not sure I'd get one for 6k though