IVA

[SausageSimon]

I'm looking to speak to Mumsnetters who have an IVA or have come out the other side of one?

I'm considering it and want to make sure I know exactly what I'm getting into. I've read a lot online about pros and cons and spoken to someone on the phone about it.

I'm considering ringing step change too for additional advice but has anyone here got any real life experience of it?

Thank you!

Bump

I had one a few years ago through Payplan. What would you like to know? It was 6 years of hard work with no credit but relief once completed.

What situation are you in? House owner? Amount of debt?

It might be a good idea to look at money saving expert forums to see what they say.

I don't own a house, I don't know if I want to share details of amounts but it's an amount I won't be able to pay back myself any time soon as I've lost my job.

What I like about it is it's a small amount every month I know I can afford without struggling anymore.

I know how to live within my means as I'm used to budgeting in order to try pay off the debt ASAP, I got into the debt for other reasons and it's been made worse accidentally!

@dingledanglescarecrows I suppose I want to know if there are any other downsides?

I worry about not being able to build my credit score again after the 5 or 6 years?

I found the only downside was lack of options for credit, having to change bank account to one with a basic account not linked to any lenders I owed money too.

I had to reduce my payments at one point which meant an extra year was added.

They go through your income and exp every 12 months so the first figure is not necessary the one you pay throughout. It could go up (or down).

Your name will be on the insolvency register (searchable by all) until a few months after the IVA is complete.

My credit score is now excellent so you can come out the other side.

@dingledanglescarecrows thank you very much for your honest response, being on the register worries me but then I'd like to think nobody I know would be searching for me! Is there a reason they put it on there for all to see? I don't like that aspect

I don't worry so much about the payments they're affordable currently what they have suggested, in a sense they can't drop any lower as my income is 0 because of losing my job. So they have room to increase when I get another job back but I'm not worried as it'll be in relation to my earnings thankfully

@dingledanglescarecrows I'm glad to hear your credit score is now excellent! Was it 0 when the IVA was finished? Or put back to average or something, and how long after did it take to get it excellent again please?

236/700 was the lowest it went, now in the 600s. Different companies use different scores as I'm sure you know! IVA completed early 2018.

I opened a credit building credit card, used it to buy diesel and paid it off in full every month which I assumed helped.

How much is the debt? Do you have any assets?

My car is my only asset, but it is a necessity where I live as public transport is lacking.

It isn't worth enough to sell to reduce debt as I'd have to purchase another cheaper car which could break down etc.

That is fantastic to hear how quickly you have rebuilt your credit score after the IVA @dingledanglescarecrows that's really positive and makes me feel less anxious about the after results

If you have no assets then bankruptcy may be worth considering as it would draw a line under things and provided you co-operated with your trustee be automatically be discharged after a year. I'm being very general here and obviously it really depends on your actual circumstances. Perhaps speak to citizens advice or a debt charity who could steer you in the right direction.

@ineedaholiday11 thank you for your advice, that is something to look into. I'm not sure if bankruptcy would mean I'd need to sell my vehicle, I could be wrong though!

Which I definitely don't want to do as I bought it specifically to keep long term and run into the ground to get the most out of it financially IYSWIM

I think it depends on whether you own it outright. Also the value of it and whether you use it for work. Definitely contact step change and see what they say.

@ineedaholiday11 I did their online questionnaire thing but didn't feel like the result gave me much direction. I think I'd prefer to speak to someone on the phone so I'll give them a call when I'm next child free, it's a lot easier to speak to a human I find!

Thank you for your help and advice it means a lot to me right now, I don't feel I can confide in anyone in RL just yet

Bumping in the hope of a couple more opinions and experiences!

My DH had one; got it in 2013, managed to pay it off early with family help and just bought a house this year as it’s no longer on his credit report although he had to build his credit score up from very low and work very hard at it. It did what it needed to do and I don’t think he could have got out of debt without it.
The downsides were that he couldn’t get a phone contract, we couldn’t have a joint account in case it effected my credit score, he couldn’t get a tenancy without a guarantor, when his car died he couldn’t get a car on finance which then was difficult as he needed a car. The phone contact, car and tenancy were fine for him because I was there and he had family help but if he didn’t then it would have caused him a lot of problems.
Every 6-12 months he had to justify all his outgoings so they wouldn’t increase payments and had to stay with the one basic bank account.

Thank you @user1493413286 it's great to get another perspective!
I'm very fortunate in that it's unlikely I'll need any credit, other than a mobile phone. I'm not sure what I would do there, I'd have to try save up to buy one full price and get a pay as you go sim I think?

My parents took out my car loan as their interest rate was far better than what was offered to me, the car should last me until the end of the IVA. The cost for repairs could be borrowed if necessary!

Like you say with support it's not so bad, I'm lucky I have family to support me although I'm not sure I want to even mention it to anyone else at all.

@user1493413286 please could you tell me more about what happened with the justifying his spends every 6-12 months?

What was it he had to do, send his bank accounts to them and they'd ask why he spent however much on something?

Doubtful you'd be accepted onto an IVA with no income

How would you sry up a payment arrangement with no income?

From memory it was more having to explain what he was paying in bills, rent, fuel etc so when he got a new job costing more fuel he had to explain that to them and if they thought he had extra income they would have increased his payments

They have said they can take benefits into account while I am looking for another job

@user1493413286 thank you for your response!

@SausageSimon I'd recommend getting some advice from a debt charity/ a debt adviser at your local CAB before you go for an IVA. A lot of mis-selling goes on by IVA companies as they're not impartial and will benefit financially from it.

There may be more suitable options depending on your level of debt, disposable income and value of your car.

IVAs do work really well for a some people - I used to work in IVAs a few years ago, but they're not always the best option. The downsides are you're tied in for at least 5 years (could be longer) and if you end up falling behind with payments your IVA will fail and you'll be back to square one. Usually everything/most of what you've paid is taken in fees by the insolvency Practitioner if this happens. If you meet the criteria for a DRO, that would 100% be a better option - if you're not, then bankruptcy may well be. Please get some advice from the CAB or a local charity rather than an IVA company. They'll assess your entire situation and give you all the info, pros and cons of all your options, not just a one-sided hard sell. Good luck!

Sorry, didn't realise you were on benefits. You said your income was 0

I came out of one just under 2 years ago. Actually rebuilt my credit record quite quickly with a credit card that I use and repay in full every month.

Unanticipated problems while in the IVA included twice being asked by work connections to take on roles with financial responsibility (think charity trustee type of thing) that I had to turn down and then found myself feeling obliged to explain why.

YorkshirePud1 is correct that you have to look very carefully at the alternatives. I would have been slightly better off financially declaring bankruptcy but had a few reasons for not wanting to do this.