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!

@KamikazeIdiot would you be willing to explain why you didn't opt for bankruptcy? I'm thinking this might be the easiest and cheapest option for me going ahead, it doesn't seem to be any of a worse option than the IVA in terms of long term effects, I think it definitely has more of a stigma attached to it though

@YorkshirePud1 thank you for your advice it is greatly appreciated. I've just looked into the DRO which sounded like a great option but sadly it would mean selling my car which I really would like to avoid entirely. I bought the car specifically to keep as long as possible and basically run into the ground, selling it would mean I'd need to buy a cheap car and run the risk of expensive repair costs or even losing the car!

Is there no way around it do you know?

@SausageSimon Unfortunately not the insolvency service is very strict about the criteria and you couldn't even apply for a DRO if your car was worth more than £1,000. I do know someone who transferred ownership of their car to a family member while they were in the DRO and they were never found out. But I'm not suggesting you do that - even though it's unlikely, if you did get found out your DRO could be revoked and you could end up with a Debt Relief Restrictions Order.

I guess it's a case of weighing it up. The outcome of a DRO and bankruptcy is the same, except one is £90 and the other is £680. Your debt will be written off at the end of the 12 months either way - I'm guessing from what you've said about your current income you won't have any monthly payments to make in bankruptcy. Just be aware though that if your car is worth a lot (usually more than £3,000), the official receiver in bankruptcy could possibly force you to sell it and buy a cheaper car, unless there's a very good reason for you not to.

I think if you're weighing up the 3 insolvency options, if you can go for one that doesn't involve making payments for 5+ years then go for it. All of them stay on your credit file for 6 years, so why struggle when you don't have to? Get it all over and done with in a year if you can.

If your parents got the loan for the car then transfer ownership to them and get a Dro. There is nothing that says they cannot allow you to use the car full time. Just come to that arrangement and so you fulfil the requirements for a Dro.

@flirtygirl do you know if that is allowed? I'm worried I'll get into trouble legally or even worse my parents get into trouble. Could I be accused of hiding assets?

Bump

I worked in insolvency for many years.

In bankruptcy, your car can be an exempt asset in certain circumstances - how much to do you think it is worth, and what do you use it for? Are there alternative methods of transport you can use for a comparable or lesser cost? That’s the sort of things they will want to know. And it can’t be a “it’s a bit inconvenient to get the bus”, it needs to be genuinely inconvenient. You being unemployed adds an extra hurdle.

Also - is the car on HP, or did your parents take out an unsecured loan to buy it? You won’t be able to repay them or continue the payments towards the car whatever solution you choose, they won’t allow it in your budget.

There is one important difference between DRO and bankruptcy - bankruptcy is final from the day of the order and the provable debts disappear immediately, But a DRO is a moratorium meaning your debts are frozen for a year and then written off. If your financial circumstances change in that year (eg you get a job) it will be reconsidered and possibly revoked.

As far as I’m concerned IVAs are a bit of a con if you don’t have a proper income and proper assets to protect (like a property). A huge chunk of your payments go to the Supervisor’s fees, making it more expensive than you think. No Insolvency Practitioner will entertain an IVA while you are on benefits - and frankly if they do they are conning you and your creditors because the only person who will get anything will be the IP.