Will an IVA help me become debt clear?
I was wondering if people reading this have had any experience of being in an IVA and could answer some questions i have.
Im 24 years old, and im a private tenant and live alone, i work full time and earn just over a grand a month. Since my partner left me 4 months ago i am struggling more and more to pay of the debts i have, i should add i have a loan through Halifax, a credit card, two catalogue accounts, a small overdraft and sofas on credit which are due to start being paid back in June.
I have spoke to a compnay who have informed me i am eligible for an IVA as my debt in total is over £15,000 and i would be able to pay more than £170 a month into an IVA, the compnay is arranging for an financial advisor to caontact me later today to speak to.
I was hoping if anyone has had an IVA in the past if you could give me some advice that would be useful.
The debt i have is like a burden, ive lost my partners wages and the share i was getting of him for utility bills every month. I really need to enter some sort of agreement but dont know if an IVA would be best.
Further on, I have now scrapped the idea of an IVA as the company who contacted me lied to me about how much debt im actually in! Not happy, but i have contacted the CCCS who are a free debt charity who have agredd to set me up on a DMP, they have sent me all the details i just need to get proof of each debt, complete the forms and send them back. I also have a template letter to send to my creditors in which ill say im entering into a DMP with the CCCS and i can not afford to pay the full amounts being asked each month, and i am planning on offering each of my creditors £5 each month untill the DMP comes into affect. This is a very scary time for me as ive never had problems with debt before, I know my creditors are very unlikely to be happy about this and will hassle me for more money etc and properly will try and take legal action againsed me, which is daft if they do as any court in the UK will see my incomings is not enough to cover my outgoings, so i think the next few months are
- BrendanLv 79 years agoFavorite Answer
An IVA is an alternative to bankruptcy. It damages your credit and is not something to be entered into lightly. Also it has to be supervised by an insolvency practitioner, who don't generally come cheap. Before jumping on the bandwagon with this company (who at the end of the day are selling you a product for profit) I would make every attempt to handle this debt yourself. There is noting magical about it and it happens each and everyday. Make a list of your debts and where applicable note the rate of interest being charged on each. Then add up what you need to live, rent, council tax, travel, food etc. Subtract this list from the debts and that gives you what is called your disposable income.
With this information you can decide what you can afford to pay each of your creditors each month.
Write to them all, enclosing your two lists and make your offer. All they can do is refuse, but in the current economic climate that is unlikely,because when they see your financial state they will realise that there is nothing to be gained by bringing you to court. If any of them make a counter offer, consider it, but don't rob Peter to pay Paul. Ask them to freeze the interest charged until you are back on your feet and say that you will review it in a year to see have your circumstances changed.
This way you avoid the costs of an IVA and/or bankruptcy and you also prove to your creditors that you are responsible and ethical enough to face your responsibilities and deal with them. I have advised many clients on this form of action over the years and it has always worked out in the end.
If you need help e-mail me