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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Anyone ever got an IVA?

42 replies

nativitywreck · 13/12/2011 11:52

And if so, is it possible to keep one credit card (the one i am up to date with)
.
I have no CCJ's or anything, and no actual defaults (yet) but I am taking credit counselling advice, and based on my current income/outgoings they have advised me to take an IVA.

I am not sure whether to hang in there another month, try to get more work, and risk a few charges etc from my creditors, or just do the IVA.

Gutted really, as it took me five years to get my credit to a good place-all undone in the last 6 months.
(Thanks George.)

OP posts:
StNicksNackered · 13/12/2011 11:59

You might want to post in money matters to get more replies.

DoesNotGiveAFig · 13/12/2011 12:00

If you can avoid it DON'T get an IVA. Companies make money on IVAs that's why they advise you to get one. You aren't one of these who has ten houses and a boat you don't want to sell to pay off your debt are you?

DoesNotGiveAFig · 13/12/2011 12:01

Remember YOU can contact your creditors to explain that you will pay them xx amount now as that's what you can afford. They can't touch you if you make the arrangement and stick to it - you aren't refusing to pay.

TroublesomeEx · 13/12/2011 12:03

There are other agencies that will help you sort this out free of charge. Avoid an IVA at all costs. Companies run these to make huge profits from customers. Not to help them out.

Original poster
nativitywreck · 13/12/2011 12:11

It's with Payplan, which is free.I do have arrangements with two of my creditors, but the Halifax (bastards bastards bastards) are saying that if I dont pay them more than the £10 a month I am doing now, they will send the account to default.
But I suppose with an IVA my credit would be fucked anyway, right?
I don't have any boats, sadly.

OP posts:
DoesNotGiveAFig · 13/12/2011 12:25

It's "free". I promise it isn't free, they will make money on your IVA, it's something to avoid if you can. Can you do a bit of shuffling and lower payments elsewhere to up the halifax payments? IVA would be worse than default.

Abbicob · 13/12/2011 12:27

You will not be able to keep any credit cards under an iva and it is highly unlikely you will be able to get one for a while afterwards as your credit rating will be non existant

JuliaScurr · 13/12/2011 12:30

What's that free debt advice charity called? Wait there....

JuliaScurr · 13/12/2011 12:33

cccs.co.uk

controlpantsandgladrags · 13/12/2011 15:07

I have experience of IVAs and just wanted to say that you shouldn't disregard the idea if you have serious debt problems. Better to enter into an IVA when you are still in control of the situation than to be forced into bankrupcy at a later date.

You wouldn't be able to keep any credit cards, you would only be allowed to have a basic bank account, and you wouldn't be able to have any credit for 5 or 6 years. You would be expected to stick to a tight budget but at the end of it the slate is wiped clean.

I would highly recommend payplan if you do decide to go down the IVA route.

afishyweddingfairy · 13/12/2011 15:24

An IVA only really makes sense if you have assets to protect - do you own your home? If you don't have a property and the restrictions of bankruptcy aren't going to affect you (ie being a director of a limited company, being a chartered accountant) then bankruptcy makes more sense.

The standard terms of an IVA usually say that the debtor cannot take more credit without the agreement of the supervisor - that is, you need permission from the people running your IVA to take more credit. I assume that the card you want to keep has a balance on it? If it does the cc company will be informed of the IVA as they're a creditor and they will stop your account. I would suggest that it would be unwise to keep one credit card if you're writing off all your debts!

I spent a long time working in the insolvency world before I gave it all up to do something more positive. If you want to PM me I will happily chat through stuff with you - it's hard to help when you don't know the full circumstances (though I get why you don't want to post it all on here).

Original poster
nativitywreck · 13/12/2011 15:24

OK, thank all for advice.

I have spoken to Payplan and told them I will be writing to my creditors personally to offer token payments, keeping one credit card which is healthy (It's cut up-just paying the minimum at the moment) so that I have one line of credit left.
I have the possibility of a few shifts in a pub to top up my income-my mum has agreed to babysit-so I reckon I can scrape thru and hopefully get back to normal payments on my other credit card in a few months by the skin of my teeth.

If my HB hadn't been reduced this would not be happening at all, so I would just like to let the " benefits scroungers" people who sometimes post on here know that my five year old got to witness me almost in tears yesterday when I realised we didn't have enough left this week for a tree and food.

But, you know, whatever I can do to reduce the deficit Hmm

OP posts:
Original poster
nativitywreck · 13/12/2011 15:26

x-post a fishy-thanks for that. I may well pm you if it all falls thru!

OP posts:
Original poster
nativitywreck · 13/12/2011 15:27

The thing is, even though I rent, it does really affect you going bankrupt, because you can basically never move again-agencies run credit checks on prospective tenants.

OP posts:
sleepevader · 13/12/2011 15:33

Wouldnt an IVA accept the agency credit check as much as a bankruptcy? I totally understand where you are coming from though. Renting is a tricky business at the best of times

afishyweddingfairy · 13/12/2011 15:38

An IVA will affect your credit rating in the same way as a bankruptcy - you are effectively defaulting on your debts, so either will be problematic for you. You can put a note on your credit file explaining why you have gone bankrupt, which does help. Also, most people don't default on the rent - if you haven't defaulted that will help with moving even if you have a black mark on your file.

One more thing - bankruptcy lasts one year maximum, then stays on your file for 6 years (as everything does). IVAs last up to five years, then stay on your file for 6 years - so up to 4 years longer!

Both IVAs and bankruptcies will really affect you, but one isn't worse than the other in terms of credit history. An IVA is an alternative to bankruptcy, not a step away from bankruptcy. They are both formal insolvency procedures.

Original poster
nativitywreck · 13/12/2011 15:41

If I agree token payments with my creditors for say, a six month period, to be re-assessed, is that as bad as declaring bankruptcy?
Is it technically defaulting if I have an arrangement with them before actually missing payments/incurring charges?

OP posts:
afishyweddingfairy · 13/12/2011 15:44

No, according to credit ratings it won't be "as bad" but if someone doesn't want to give you credit in the future they will use it as the reason. Token payments until you get back on your feet are better than going into a formal procedure if you can afford to do so, and can afford to start paying back at the agreed amounts at a future date. If you're going to be paying off token amounts forever it might be best, if you are really struggling, to consider bankruptcy/IVA or a Debt Relief Order (like bankruptcy, but for smaller amounts).

If you have an arrangement with your creditors it shouldn't show up as defaulting as effectively you are restructuring your agreement. It is possible that someone will get it wrong on the computers and it will show as a default (but this can be corrected).

Original poster
nativitywreck · 13/12/2011 17:25

Hmmm. According to my bank, there is a "mark" next to my name, as if I have defaulted on somethign, and I think it is because of the Halifax (bastards bastards bastards) saying I have defaulted when they told me that the account hadn't gone into default.
How can I correct it?

OP posts:
afishyweddingfairy · 13/12/2011 17:54

You need to get hold of a copy of your credit report from Experian or Equifax - there is a nominal charge for this or you can get it free from Credit Expert website but you need to cancel your membership as soon as you have it. Once you've seen the report you can write to both credit agencies and have the matter corrected, also notifying Halifax (bastards bastards bastards) that they need to correct it too.

Original poster
nativitywreck · 13/12/2011 19:09

I will do this. You are a mine of good info afishy!
I also like that you are perpetuating the truth about Halifax Grin

OP posts:
FabbyChic · 13/12/2011 19:14

Remember that if you earn extra money to pay your debts you have to advise the Housing Benefit office and they take 65% of any excess income.

FabbyChic · 13/12/2011 19:15

Bankruptcy is the last option. It clears your debts but you are fucked for six years after as with an IVA you pay your debts but you still fucked for six years after.

You have defaulted with the Halifax becauase you are not paying what you are supposed to you are paying less.

MelodyPondering · 13/12/2011 19:19

Sorry afishyweddingfairy but that's not true. An iva would fall off your credit file 6 years from the date of the creditors meeting and therefore one year after the end of the iva.

Cccs helped us with ours and they were great. My monthly payments reduced from over £1000 to £200 a month. But we owe a lot.

Robins · 13/12/2011 20:18

We have just finished our IVA after five and a half years and to be honest we found it preferable to never ending debt management plans. We learnt to live within our means and knew there would be an end. We used Freeman Jones in Manchester and were more than happy with them. You cannot keep any credit cards at all. Struggling on or getting an IVA is far preferable to debt plans in my opinion. But when we desperately needed a new washing machine, we used a company called Payperview, where they link your tv into a coin machine so you put pounds in to pay for the washing machine. In other words though you cannot get credit, there are other companies that sort of give you credit for stuff you really need BUT DON'T TELL THE IVA COMPANIES!