To IVA or to not IVA - That is the question.

[Jamieoconn]

Hi Folks,

 

I have posted on this forum before, but many moons ago. I have got myself into a bit of a financial mess (again) and am considering the IVA route.

 

In a nutshell, I have no assets having sold my house some months ago and I am now living in rented accomodation.

 

I have the following debts:

 

Personal Loan

Unsecured Personal Loan Bal = £14,479.00 Monthly Payment = £314.78

 

Credit Cards

HFC Bal = £923.00 Monthly Payment = £18.00

Mint Bal = £6,826.00 Monthly payment = £160.00

MBNA Bal = £8,369.00 Monthly Payment = £210.00

First Direct Bal = £7,342.00 Monthly Payment = £220.00

Egg Bal = £4,149.00 Monthly Payment = £100.00

 

Total Debt = £42,088.00 Total Monthly Payments = £1,022.78

 

So far, I have not defaulted on any of the above debts.

 

What do you guys think I should do?

 

Any help/advice would be much appreciated.

 

Many Thanks,

[slick132]

Hi Jamie,

 

As this is still unanswered on the Welcome forum, I'll get you're thread moved to General Debt Issues where you should get the right advice.

 

Slick

[Jamieoconn]

Thanks Slick.

 

Rgds,

[slick132]

I've flagged this up for a response from a team member and thanks for your patience.

[tomterm8]

Personally, I would always be deeply suspicious of IVA as an option for most people. The terms of IVAs seem very harsh to me. They cost a lot of money, and for people without assets (such as a house) to protect, they are very rarely worth it.

 

I view an IVA as having almost as damaging effect on your chances of obtaining credit as bankruptcy. Frankly personally I would generally advise people to go down the BR route over IVA where they have no assets to protect, and they are not in a job such as soliciter / policeman etc where it could cost your job.

 

HOWEVER, looking at those debts, and your good credit rating (I assume?) and assuming that, having not defaulted you haven't incurred penalty charges, I'm really wondering if an option you might not have considered is to investigate whether you can do a fixed rate deal, reducing the interest considerably.

 

How much disposable income do you have?

[The GodMother]

Hi.

 

I personally would not go for an IVA due to personnal reasons.

 

I would persue the the CCA route and then see what is legal and pay that way.

 

If you have nothing then remember that we dont have to pay but you can pay them a pound a month based on no CCA.

 

its up to you really.

 

Chrissi

[bladeboy]

Hi there, just for those police officers that might read this. Bankruptcy does not cost you your job since it's a legal and legitimate way to deal with debt.

 

The code of conduct regs have changed and Bankruptcy is not a misconduct offence. Company Directors, Solicitors and MP's however have a problem.

 

The only way law enforcers can get into trouble is where there are instances of dishonesty, or, misrepresentation of the state of your affairs to the extent that is appears dishonest. Such as lying on a loan application for example. I know of a few police officers that have gone bankrupt and they did not get sacked - after all, what they were doing is a legal option.

[Jamieoconn]

Personally, I would always be deeply suspicious of IVA as an option for most people. The terms of IVAs seem very harsh to me. They cost a lot of money, and for people without assets (such as a house) to protect, they are very rarely worth it.

 

I view an IVA as having almost as damaging effect on your chances of obtaining credit as bankruptcy. Frankly personally I would generally advise people to go down the BR route over IVA where they have no assets to protect, and they are not in a job such as soliciter / policeman etc where it could cost your job.

 

HOWEVER, looking at those debts, and your good credit rating (I assume?) and assuming that, having not defaulted you haven't incurred penalty charges, I'm really wondering if an option you might not have considered is to investigate whether you can do a fixed rate deal, reducing the interest considerably.

 

How much disposable income do you have?

 

I run my own Limited Company, so bankruptcy would not be an option as I would not be able to be a Director etc. In terms of disposable income, I have none. In fact my outgoings exceed my income. Whilst I have not defualted on any of my credit agreements, I am not able to obtain any further credit etc, so a loan would also be out of the question.

 

Hmmm - decisions decsions

 

Thanks for your help.

 

Regards,

[Jamieoconn]

Hi.

 

I personally would not go for an IVA due to personnal reasons.

 

I would persue the the CCA route and then see what is legal and pay that way.

 

If you have nothing then remember that we dont have to pay but you can pay them a pound a month based on no CCA.

 

its up to you really.

 

Chrissi

 

Hi Chrissi,

 

Sorry to sound like a numbskull, but what is "CCA" and how will it help me?

 

Please advise.

 

Thanks,

[The GodMother]

A CCA is a consumer credit agreement under the consumer credit act of 1974.

 

Basically it is a piece of paper that says the credoitor is able to chase you for this debt.

 

If you have any personal account with companys like catalogue loans and credit cards then you can CCA them and find out if the acc is legal. If it is not then you dont have to pay them and you cn gain all unfair charges back to the account.

[slick132]

Hi Jamie,

 

Take a look at Letter N here - http://www.consumeractiongroup.co.uk/forum/general-debt-issues/20758-creditors-dcas-letter-templates.html

 

If any of the Credit Card Co's are NOT able to provide a copy of the necessary document setting out the "prescribed terms" in response to your request, the debt may be legally unenforceable.

 

You could therefore opt to repay it at a rate to suit your circumstances. The lender could not demand rep't, nor could they place a Default marker against you for non pay't or late pay't.

 

This would NOT apply to an overdraft.

[tomterm8]

Just be careful to check whether the debt is actually consumer credit regulated (most business debts won't be, BUT personal debts will mostly fall under CCA as long as they were commercial loans )

[The GodMother]

Tom that is why i put personal debt.

 

I guessed that business debt would not be consumer credit regulated.

 

What does business debt fall under and how can the OP find out if the debt is legal for business debts?

[Goldlady]

Hi, as I am currently trying to help some friends get out of an IVA I would not recommend that route at all.

 

I know two other people, one went for an IVA and still has a dodgy credit rating, the other one went bankrupt and was actually barred from being a company director, and yet he has a better credit rating than the one who had the IVA. No-fault bankruptcy can mean you are discharged within as little as six months by the way.

 

As has been suggested you could go down the CCA route. I have done this. 18 months ago I was advised to go BR as I had debts of 80K - mostly due to running business but they were personal debts. Then I discovered CAG. I sent the CCA letter to the ones who were giving me grief and found to my amazement that they could not enforce the debt. Two of them actually wrote and said I would never hear from them again. Others I am paying £1 a month to (£5 a month in total!!) but I have found that 3 of them don't have enforceable agreements either.

 

The down side is that I have loads of defaults on my credit history. But I am not bankrupt, I still run my own business, and I have recently remortgaged (Ok not at the cheapest rate on the block) as mortgage lenders do not bother about credit card/loan defaults too much.

[Jamieoconn]

Thanks for all your help guys. I think I will CCA all of my creditors and see what happens.

 

I really appreciate all of your advice and help.

 

When I do have a few spare pennies, I will make a donation to the site - it really is a great resource.

 

Cheers,

[The GodMother]

YW.

 

I think this is what we are here for.

[debbbbsy]

You need to do what is financially best for you.an iva will last for 5 years & from my own experince is NOT the best route.I can understand your concerns regarding your status as director.Can't you make a partner/family member director during bankrupcy...in some cases you can be disharged after 2 years.Please please don't go into an IVA thinking it is an easier option it isn't? From someone who has been there.

[Goldlady]

Yep, my friends have an IVA and we have just found out that they are probably going to lose their home in the fourth year as there is a ridiculous term that they have to remortgage for 85% of the value and pay the excess above their mortgage into the IVA. If things carry on as they are now they have no chance of remortgaging and will have to sell the house to keep in the terms of the IVA. If they had gone B/r they would be back on their feet by now.

[gizmo111]

They won't lose their house in year 4, if they cannot remortgage to 85% after using their best endeavours to do so, the term will be deleted as impossible to comply with. They may have an extra year added on to compensate....they all difffer, best to talk to the supervisor and ask what are the consequences if they are unable to remortgage.

[Von Greenbach]

Hi

 

Were on a DMP, which calculated will take 18 years to clear, we owe £80.000 in unsecured debts.

 

We do have a mortage, and was considering an IVA, now after reading this thread, we're really confused as to what to do for the best.

 

At present I'm 50 years old, if I stayed on the DMP, this will take me over my retirement, and I have no personal pension to fall back on.

 

We have 20 years left on our mortgage, god, this is all a nightmare, and so confusing, I'm sorry for the rant, I just find it all very stressful.

[Goldlady]

Gizmo I truly hope you are right. I am trying hard to get them out of this IVA.

 

My thread is here if anyone on this thread is interested.

 

http://www.consumeractiongroup.co.uk/forum/formal-solutions/121272-how-get-out-iva.html