In serious debt - What exactly is an iva? How do you go about things?

[mummytopebs]

Basically we are in debt inc student loans etc of about 35k!!!! We have a credit card which we have been transferring to 0 per cents but now with recession etc we cant get another to transfer to and they have put the interest up to 26 per cent!!!.

We are just about managing to pay but not clearing debt because of interest. What is an iva? Would be this be an option for us? What are the advantages/disadvantages?

Not sure about IVA but I do know that you can't 'write off' student debts...I tried but not allowed.

the student loan debt they might be able to restructure your payments, but banana is right, you can't write them off.

don't pay anyone for debt counselling or advice!

it's free from known charities like CAB, consumer credit counselling and national debt helpline.

I went to CAB. They basically said you wanted to go to Uni, what did you expect. So no help whatsoever.
Don't you have to be earning over £15,000 pa for repayments to start anyway?

only 5k of it is students debt the rest is from when we moved house and just general bills etc. You do have to earn over a certain amount for student loans but mine is a student grant which i have to pay back because didnt finish the course as couldnt afford to

Had a Student Loan( Scotland) and it used to depend when the loan was taken about whether it could be linked to an income level deferement(mines were in the mid 19990's)but the Student Loans will tell you if you call. You should see if your local area has its own not for profit Debt Counselling as they will help you work your way through the minefield. Some Local Authorities have income maximisation advisers and Welfare Rights Officers who can also help. Fingers X'd

Forgot to say Martin Lewis website is really good - takes a bit of time to read through the stuff but gives step by step advice

An IVA is basically when you agree with your credit card provider(s) to pay a lesser amount than would normally be required. They also stop the interest so all payments go towards reducing your debt. This is an official, court approved course of action. You can do it yourself, like an informal IVA and the CAB can provide advice.

Simply work out a budget, income and outgoings. Then what is left is what you can offer to pay to the credit card companies. Write to each provider with your budget and explain what you are proposing and how much you can afford to pay them. You would be permitted a small amount for general spending money, but don't include something like £100 a week for entertainment for example, or a full Sky package.

Unfortunately, it mucks up your credit rating for quite a few years.

Agree with lynnelou, the money saving expert website should be your first port of call.

There is loads of very helpful advice and tools to get you started with in reducing the debts and to help with budgeting etc.

They also have a useful guide to IVAs:

images2.moneysavingexpert.com/attachment/ivaGuide.pdf

You can't set up an IVA without a Legal Mediator. They usually last 5 years, and you need to have about £200 a month to pay into one.

There are other options, too, but I would recommend you go to see somebody and talk through what's available to you.

Look for one of the organisations mentioned already, or try here for an advice centre near you. If you still want to go the IVA route they'll have somebody they work with to refer you to.

I agree with purpleturtle. You cannot simply do an IVA. You need proper money advice before going into anything like that.

What cjlb is talking about is called 'informal agreements' with creditors and they are not legally binding. They are also not obliged to stop adding interest and charges to the account and they are also not obliged to accept your offer, so they can still take you to court to get a CCJ.

How long ago dis the c/card company put your interest rate up? Legally you have got a cooling off period where you can refuse this increase (not sure how long, but I think it's 30 days) and they will keep you on previous interest rate. You will not be able to use the card any more and it will be closed down once the outstanding balance is paid off, but at least this will lower the interest without impacting on your credit rating so may be worth considering.

Please ring consumer credit counselling service or national debtline.

Both free. Dont deal with others who have similar names. They aren't impartial or free!

Be aware that unless you own home that an iva may not be for you.
Bankruptcy may be the better route. Too many people are pushed down the iva route by the debt sharks as they are a way of getting money.

Student debt can't be wiped. You need to put that to one side and just pay repaymnenrs. What is the level of other debt? What is your income and surplus after other bills ( not debt paid)

Cccs have an online debt remedy which is comphrensive.

I second everyone's advice about NOT paying someone for debt advice, you will probably get ripped off, but move quickly if you want free debt advice. The govt are cutting funding for 100s of specialist debt advisers up and down the country from the end of March, so all other services will be seriously overstretched soon.

Do not consider an IVA unless you have at least £100 a month disposable income after paying out for all your essential expenditure, and you need an insolvency practitioner to complete an IVA for you. Other options are bankruptcy, full and final settlements, debt management plans or a more casual repayment arrangement.

Payplan are a national charity who manage IVAs and debt management plans. As an experienced debt adviser I would recommend them.

IVA is only available if you have a regular income. It is a much better solution than bankruptcy as you don't get any of the penalties that comes with bankruptcy.
The IVA stops your creditors from adding on any charges or interest for the duration of 5 years after which you're debt free!
I don't think it's a good idea if you're a home owner as I think you might loose your house.
If you're in rented accommodation, speak to somebody about IVA - it could be the light at the end of the tunnel..

try to ask here:

iva.co.uk/forum/

Just to say that I have been struggling too. If you aren't sorted yet I found the martin lewis moneysaving expert a mine of information! BE VERY CAREFUL OF COMPANIES TRYING TO PUSH YOU INTO IVA's, they make a huge pile of money from setting this up!! This might be the right option for you but best to talk to a charity first off (as they don't make money off you!!) There is Payplan and CCCS, they will advise your best course of action and can usually arrange it for you. Hope this helps

we have a debt management plan with Payplan. They have been great - took the pressure off us. They dealt with all out creditors and worked out how much we could afford to pay etc. Dh hours were cut and we lost a third of our income and things quickley spiralled.

They were really professional and helpful and always responded to emails and phone calls etc - would definately recommend them. Our crdit file is now shot to pieces but we don't want anymore credit. All we pay now are essential bills and the mortgage and the payment to payplan and they sort all the creditors