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Iva

27 replies

herbaltea21 · 12/12/2022 20:24

I am just wondering if anyone has had or has an IVA and has any advice for someone considering it?

OP posts:
userxx · 12/12/2022 20:27

My friend in the process of an Iva - I advised her to do it.

How much debt are we talking ?

herbaltea21 · 12/12/2022 20:37

Debt is between £20000-£25000.
I was considering a dmp but it's expected to last over 10 years with my current budget so a IVA has been recommended by step change.
Im a single mum and despite working as much as I possibly can I just can't get my head above water or see a way out :(

OP posts:
stillvicarinatutu · 12/12/2022 20:53

I do .

It almost finished thank god . I couldn't go bankrupt and it was the only option, it's been a long 6 years but it's nearly over and the relief of being debt free is hard to describe!

They told me the mortgage company will let them remortgage and that was true in my case and I've just paid an extra year.

Go to a reputable advice agency though . Mine was organised through Payplan. It does
Ruin your credit rating for 6 years but hopefully I'll be able to raise mine again in a few months.

I've ended up paying my iva and my ex husbands but it's
Kept the house - now just need to finalise the divorce .

stillvicarinatutu · 12/12/2022 20:55

Sorry that should be mortgage company WILL NOT remortgage- because you're credit rating will be shot for the duration.

Payplan have been good and very helpful when my circumstances changed .

userxx · 12/12/2022 20:57

My friend had double the debt.

How has the debt come about. I know someone who is on her third IVA as she didn't change her spending habits at all.

If it's going to get you on the right track then id do it, step change will have talked you through all the pitfalls, I'm assuming you dont have any high value assets which they could ask you to sell.

Itsalldramarama · 12/12/2022 21:03

I had one 9 years ago , over 20k , I used Steps change who were amazing , paid £140 for 6.5 years , it's reviewed yearly and they were very generous with allowances , it's more complicated if you are a home owner rather than a tenant but I found it a positive experience and once completed I built my credit score up within 6 month

herbaltea21 · 12/12/2022 22:13

Thanks all so much for sharing.
I don't own, I have just started renting via the council.
I have a car but I can't sell it as I wouldn't be able to work or get my children to school etc! Tbh it's not of high value anyway.

I'm concerned because when I first spoke to step change they were very much pro dmp and said that if I went through an Iva they may reject my budget and ask me to be more strict. This worries me a lot as I think I'm really scrapping the barrel as it is!

OP posts:
CrazyEgg · 12/12/2022 22:24

IVA is very expensive debt solution and is designed to protect a house you own….so it’s not for you!!! Please don’t do it and listen to Stepachange or other free charities for advice. Anyone who tells you to do an IVA is a salesman on commission as your situation is clearly not fit for an IVA.

herbaltea21 · 12/12/2022 22:40

CrazyEgg · 12/12/2022 22:24

IVA is very expensive debt solution and is designed to protect a house you own….so it’s not for you!!! Please don’t do it and listen to Stepachange or other free charities for advice. Anyone who tells you to do an IVA is a salesman on commission as your situation is clearly not fit for an IVA.

Step change told me this was the best option for me as a dmp wouldn't let me debt free for 10 plus years. I am doing this via step change.
Why is an Iva more expensive?

OP posts:
CrazyEgg · 12/12/2022 22:48

IVA is done via admin companies who take a large cut in fees. Stepchange never recommends IVA for a non home owner. Please try to ignore the number of years in a DMP because it’s an unofficial arrangement that you can change over and over again. IVA is expensive, set in stone, and you must allow your expenditure getting audited. They will even make you pay more if you work overtime or get a small bonus.
A self managed DMP is free because you do it yourself x And in a few years time you can start haggling for partial settlement. MSE forums Debtfreewannabes can talk you through step by step.

PrincessofWellies · 12/12/2022 23:02

Bankruptcy would be a more realistic option for you.

Mumneedshelp82 · 13/12/2022 05:43

CrazyEgg · 12/12/2022 22:48

IVA is done via admin companies who take a large cut in fees. Stepchange never recommends IVA for a non home owner. Please try to ignore the number of years in a DMP because it’s an unofficial arrangement that you can change over and over again. IVA is expensive, set in stone, and you must allow your expenditure getting audited. They will even make you pay more if you work overtime or get a small bonus.
A self managed DMP is free because you do it yourself x And in a few years time you can start haggling for partial settlement. MSE forums Debtfreewannabes can talk you through step by step.

I’m not a home owner and I have a IVA with stepchange. They made sure that everything was in my budget and have been really good! They do take 50% if extra earrings/overtime if it goes over your annual allowance! This has never happened to me yet. And I only have a year left.

CrazyEgg · 13/12/2022 06:55

Are you 100% in the same circumstances as the OP - same income, same outgoings, same health, same age kids, same debt? Probably not so the reason why an IVA was suggested to you was different to the OP. From money management point of view an IVA is a horrendous waste of money that chains you up for 6 years with no flexibility and it takes your overtime/bonus. Shocking!
IVA can fail and then you are back to day 1.
A bankruptcy is a clean slate and could work for OP.
IVA and bankruptcy need to be declared if ever asked.
A DMP is a fees free flexible unofficial arrangement that you can change as your circumstances change. Nobody will ever know or care you are in a DMP x

BarbaraofSeville · 13/12/2022 07:11

From the information you look like a candidate for a Debt Relief Order, Bankruptcy or an IVA in that order and the latter would only be appropriate if your job would be affected by bankruptcy and your car is worth too much for the first two options. Has Stepchange explained why a DRO is not suitable and that you should pursue an IVA?

How sustainable is your budget? Be aware that, whatever option you choose, you have to be able to afford to live without credit for 6 years so need to account for all annual and irregular expenses including things like washing machine replacement, car repairs, presents for DC, school uniforms etc etc. Also small sundries like batteries, light bulbs etc, which can be part of your grocery budget, which can be reasonably generous - if you've struggled with debt for a while, chances are that you've cut right down on food to try and keep up with debt repayments, so will probably be allowed to spend far more on groceries than you're used to.

Have a look at this forum:

forums.moneysavingexpert.com/categories/iva-dro

Look out for the threads where people post their budgets and people advise on tweaking them before submitting them officially. Yes, there is an element of 'how much can I get away with' but as indicated above, you have to live without credit for 6 years and you aren't expected to live like a church mouse, you're allowed reasonably normal expenditure. Don't forget that food and energy has increased a lot over the past year.

Mindymomo · 13/12/2022 07:11

An IVA usually costs a lot to set it up and then whoever is dealing with the IVA charges a sum each year, which is taken out of the money you have paid in, so not all your money goes to your creditors. Have you tried contacting your creditors yourself to sort out a payment plan with them direct, as this will cut out the need for an IVA. Also if your only asset is a car, you may be better going bankrupt.

herbaltea21 · 13/12/2022 07:22

Thanks all sorry I should have said I can't go bankrupt because of my job.
I don't think I'm impacted by an Iva.
My budget recommends £147 payment a month so this outrules a DRO.
I do think my budget is tight but the advisor I spoke to at step change indirectly said that I was on the high end for food etc and may not get accepted ££80 for a family of three 😕)

OP posts:
uggmum · 13/12/2022 07:44

You have too much disposable income for a DRO.
SCDC are reputable and if they feel an IVA is the best option for you then I would trust their advice.

PritiPatelsMaker · 13/12/2022 07:50

I was wondering why they hadn't advised a DRO but that explains it. As the PP said, Stepchange are very reputable, I'd go with what they say.

sacksanta · 13/12/2022 11:54

herbaltea21 · 13/12/2022 07:22

Thanks all sorry I should have said I can't go bankrupt because of my job.
I don't think I'm impacted by an Iva.
My budget recommends £147 payment a month so this outrules a DRO.
I do think my budget is tight but the advisor I spoke to at step change indirectly said that I was on the high end for food etc and may not get accepted ££80 for a family of three 😕)

Is this £80 per week or £80 per month?

PrincessofWellies · 14/12/2022 22:37

Your budget is very low. In 2018 the trigger figure for housekeeping for two adults and one child was £132 per week, so you are well below that and as I said that is a 2018 figure. Personally I do not think £80 a week is sustainable long term for housekeeping, particularly during a period of high inflation.

PritiPatelsMaker · 15/12/2022 07:59

Your budget is very low. In 2018 the trigger figure for housekeeping for two adults and one child was £132 per week, so you are well below that and as I said that is a 2018 figure. Personally I do not think £80 a week is sustainable long term for housekeeping, particularly during a period of high inflation

Totally agree with this. £80 for two adults is not sustainable long term with the inflation we have now.

abblie · 15/12/2022 08:05

I have an iva now and it has saved my life even though my credit rating is 0 I don't care I tried to consolidate all my finances with bank and they refused. The iva company done everything for me

abblie · 15/12/2022 08:09

Mindymomo · 13/12/2022 07:11

An IVA usually costs a lot to set it up and then whoever is dealing with the IVA charges a sum each year, which is taken out of the money you have paid in, so not all your money goes to your creditors. Have you tried contacting your creditors yourself to sort out a payment plan with them direct, as this will cut out the need for an IVA. Also if your only asset is a car, you may be better going bankrupt.

I didn't pay anything to set up my iva and yes they do charge a fee. I took mine out for 5 years where if I continued just paying debts with interest going on each month was never going to be cleared it was honestly one of the best decisions I made

herbaltea21 · 15/12/2022 11:05

abblie · 15/12/2022 08:05

I have an iva now and it has saved my life even though my credit rating is 0 I don't care I tried to consolidate all my finances with bank and they refused. The iva company done everything for me

Thank you for sharing!
I am just worried about the budget side of thjngs as the person at step change said that with the Iva they are much more tighter on the budget side of thjngs. I worry about not having any money to put aside for emergencies etc and with the costs of thjngs going up.
I guess I need to give them a ring today to talk this through.

OP posts:
abblie · 15/12/2022 14:46

herbaltea21 · 15/12/2022 11:05

Thank you for sharing!
I am just worried about the budget side of thjngs as the person at step change said that with the Iva they are much more tighter on the budget side of thjngs. I worry about not having any money to put aside for emergencies etc and with the costs of thjngs going up.
I guess I need to give them a ring today to talk this through.

Personally I tried with step change and they where awful I then contacted the insolvency group and they where amazing I hope you get sorted out soon