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Hi - I am in the process of setting up an IVA with CCCS Voluntary Arrangements. They have been great and all of their advice seems to stack up. However, it did just occur to me that before signing anything it would be worth getting a second opinion as to whether this is the right choice. In a nut shell, my situation is:

 

Unsecured debts of £65,000

Disposable income (using CCCS IE sheet) £300 per month

No assets

House has about £55K negative equity (worth £135K, mortgage £112K, secured loan £68K).

 

It seems to me that I have nothing to loose with an IVA (although possibly bankruptcy might be cheaper for me).

 

What do people think? Any advice would be very much appreciated. Thanks in advance.

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Hi Adfax,

 

All I can say is that an IVA is a legal arrangement so you need to be 100% sure that you can afford the repayments not just now, but for the term of the IVA (i.e 5 years I believe).

 

Whilst bankruptcy is an alternative, it does have its advantages and disadvantages.

 

I am sure you have had lots of advice in this matter, but the decision at the end of the day is yours.

 

Alternatively you could contact your lenders to request the documentation/agreements and make a decision based on their replies.

 

Regards


-

PLEASE NOTE - I am not a legal expert, my comments are based on information learnt or

obtained and from my own experiences.

-

Case 1 - C L Finance - Court Case 'Stayed' :-). Stay Lifted - N149 AQ Received & Filed. Case Struck Out :grin:

-

Case 2 - C L Finance - Defence Filed. N150 AQ Received & Filed. Case 'Settled by Consent' :)

-

Case 3 - EOS Solutions - No Agreement - Account Closed ~£3500. :grin:

-

Advice & opinions offered freely but informally, without prejudice & without liability.

Use your own judgment and seek advice from a qualified and insured professional if you have any doubts.

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Thanks for the reply GhostDebt. I am reasonably confident that I will be able to meet the repayments for the duration of the agreement.

 

I did consider a DMP, but the length of time it would take was crazy. Something like 16 or more years ... and that was assuming that all of the creditors froze interest and charges. Also, I don't like the uncertainty of the creditors being able to move the goal posts.

 

For me, the advantage of the IVA seems to be is that it is not only legally binding on me but also on my creditors. I am 'happy' to pay for that peace of mind.

 

I think my concern is that it almost seems too simple ... there has to be a downside. As far as I can see, the only downside for me is that my credit rating will be shot for 6 years ... but then it is already so that is not a worry either.

 

What am I missing? :???:

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the real downside with IVA's is what happens if your income changes. Most IVA's are structured so that the first year mostly pays the costs of the IVA with little going to creditors. So if you lose you job after 1 year then you debts are reinstated fully and of course this can lead to bankruptcy. You are not "safe" so to speak until the final payment. So really it depends on how secure you think your job is. anyway as i always say you have to make the decision yourself and be happy with the decision.

 

feel free to ask if you have any questions about any of the debt solutions

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I think I understand what happens if my income changes for the worse ... I either struggle on, ask the creditors if they would renegotiate, or go bankrupt. To be honest, due to the nature of my work (ie fixed hours, no overtime or bonuses), it is unlikely that my income would reduce - unless I actually lost my job, in which case, to be honest, going bankrupt would be the least of my worries.

 

If my income increases (as it tends to annually - about 2% cost of living), am I allowed to increase my expenditure by a similar percentage - to allow for inflation, increased fuel costs etc ... hence leaving the same disposable income for the IVA?

 

I am 99% certain that the IVA is right for me, but I just have this niggle that I may be better off going bankrupt and getting it all out of the way somewhat quicker.

 

Would anyone else like to share their experiece of making the BR v IVA decission? Do they feel it was the right move for them? Did the IVA pan out as they expected?

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Have a read through some of the threads on here

Formal Solutions: Bankruptcy, Administration Orders and IVAs - The Consumer Forums

 

regards


-

PLEASE NOTE - I am not a legal expert, my comments are based on information learnt or

obtained and from my own experiences.

-

Case 1 - C L Finance - Court Case 'Stayed' :-). Stay Lifted - N149 AQ Received & Filed. Case Struck Out :grin:

-

Case 2 - C L Finance - Defence Filed. N150 AQ Received & Filed. Case 'Settled by Consent' :)

-

Case 3 - EOS Solutions - No Agreement - Account Closed ~£3500. :grin:

-

Advice & opinions offered freely but informally, without prejudice & without liability.

Use your own judgment and seek advice from a qualified and insured professional if you have any doubts.

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Hi there

 

Based on your level of debt and surplus income, an IVA would be a good option for you. The IVA is a legally binding agreement, whereby upon approval of your offer, you would just need to pay in a monthly payment for 5 years and then the remainder of your debt will be written off. It is best to put forward a realistic income and expenditure, however, if once your IVA is approved, your income or expenditure changes, the company will review your IVA as they would annually anyway. The creditors would then look at your offer if changed to see if they are willing to continue with the IVA. If you come out of work or cannot afford your payments, you can apply to either reduce or suspend your payments and put an extension on the end of your IVA. With you having negative equity, there is no chance that you would have to pay this in in the 4th year.

With bankruptcy, it does not just last 12 months, it can take a further 3 years before you are dicharged from this if they ask for you to pay into an income payment order. In bankruptcy it carries a stigma and assets are not protected, therefore it would take you 2 years more to do an IVA with the peace of mind that your assets and future is safe.

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Hi loobyloo,

 

Although a person may be asked to pay an amount for 3 years, this is not the same as not being discharged for a further 3 years. A bankrupt is discharged from their bankruptcy after 12 months, often in less time than that. Properties that are in negative equity and are the family home are protected within a bankruptcy, vehicles that are nessesary for employment and are not of excessive value are also protected in bankruptcy.

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Thanks for clarifying that Debtinfo = I always thought it was 12 months, plus another 3 years if an income payment order was asked for before someone is discharged x

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