I.V.A what does it mean ??

[Big Marty]

My sister and her husband have found themselves in a bit of trouble with debt since he lost his job..They have been told to apply for a I.V.A but are not sure what it is or does and neither am I..Any help to explain would be great..Thank for now..MARTY..

[marktattoo]

Individual voulantary agreement

 

Basically you agree to pay your creditors £x normally they will freeze the intrest on the amount owed. You make the agreement and basically you have to stick to it as it you fail to pay on the agreement the company can cancel the agreement and demand the lot, and if it goes to court they will bring up the fact they have tried a iva with you, and you have failed on that. The other down side it will basically give you a bad credit record

[Robl]

What the first reply said.

 

As I understand it there’s another side to it too.

A lot of people with bad debt hide from it.

There are lots of petty con men who take on debt then move house, or take on debt in slightly different names.

It gets them quick cash and it takes ages for the credit companies to track them down.

That’s why these debts tend to get sold off to debt collection agencies who then throw on loads of extra charges.

Even if they only manage to recover a few of the bad customers, they extra charges make up the difference.

 

If someone tries an IVA it means they aren’t just trying to avoid repayment.

It shows they are decent people who are trying to do the right thing but have got into trouble.

It means that the creditor doesn’t need to take on a debt collection agency, but instead they can just renegotiate a mutually beneficial result.

 

Sometimes it can be a case of reducing payment to just cover the interest for X months/years until a new job is found and the loan can revert to normal.

Sometimes it might mean changing from 36 months at £200 to 74 months at £105.

[Sprackles]

I would suggest they google Consumer Action Group...all one word and see what it says.

An IVA is in fact more restrictive in a lot of ways than bankruptcy and in a lot of cases reverts to full Bankruptcy half way through as people cannot adhere to its strict terms.

It is a solution for people such as professionals who would lose their jobs through a Bankruptcy but for the ordinary man in the street is far too restrictive and in a lot of cases Bankruptcy is a better solution.

 

All creditors have to agree to an IVA and not all will.

 

I personally would not advocate such a course of action unless circumstances dictate so. Forget all what you are told about being decent and trying to do the right thing because the Debt Purchase companies dont give a damn. They want your money and will do anything to get it.

 

Dont take my word for it, visit the site I said and form your own opinions.

Take it from a man who has been there and experienced them at their worst.

 

Big Marty, who told them to go for an IVA...dont listen to Citizens advice either, they really dont know what the actual laws are and to be honest, unless you find a specialist solicitor, neither do most Law firms.

 

Consumer Action Group.....all the help you will need and all free.

Edited September 11, 2012 by Sprackles

[shaun4860]

Go to the citizens advice

 

They will put you in touch with a debt service who will talk you through everything, help set up payment plans and the like, they will deal with your creditors for you.

 

Best of all its all FREE of charge unlike the sharks on the telly that advertise that they will help you out.

 

Citizens Advice.......you know it makes sense

 

 

Just noticed you are in Northern Ireland, should be the same there

Edited September 11, 2012 by shaun4860

[Sprackles]

Go to the citizens advice

 

They will put you in touch with a debt service who will talk you through everything, help set up payment plans and the like, they will deal with your creditors for you.

 

Best of all its all FREE of charge unlike the sharks on the telly that advertise that they will help you out.

 

Citizens Advice.......you know it makes sense

 

 

Just noticed you are in Northern Ireland, should be the same there

 

Sorry Shaun but they will put you in touch with PayPal and CCC who are not all they are cracked up to be.

They do work for some people but again there are too many horror stories mof payments not being made and creditors not agreeing and going for CCJs halfway through.

[shaun4860]

Sorry Shaun but they will put you in touch with PayPal and CCC who are not all they are cracked up to be.

They do work for some people but again there are too many horror stories mof payments not being made and creditors not agreeing and going for CCJs halfway through.

 

It has worked for 2 people that I know,

 

Might not work for everyone but far far better than one of those companies that advertise that they will sort it for you

 

[Robl]

I guess the best plan would be to speak to as many people as possible and make a decision from there.

 

But, I do think one bit of advice that nobody will disagree with, is to contact the people you owe money to and let them know you’re working on fixing the problem.

So long as you are still on the original companies books then they will often work with you.

 

If you keep ignoring their letters they will sell the debt and you’ll end up getting hounded by debt collection agencies with ever increasing charges.

Eventually they’ll get the money or sell it to an even worse company.

Edited September 11, 2012 by Robl

[four-wheel-drive]

Many years ago I had some problems when I was out of work and found the citizens advice to be of great help the credit card people and banks do listen to them I found them to be very good. My neighbour however would not listen to me and went to one of those places you see advertised on TV and 18 months later after paying them lots of money to do virtually nothing he went bankrupt and is now getting back on his feet again. Citizens advice is good for small debts but if you are really in the **** go bankrupt that is the only way to get a new start.

[Mungler]

"IVA" means "Death of a thousand cuts and screwed credit rating".

 

It's just like bankruptcy, but whereas you can be in and out of bankruptcy in under 1 year (but with a perma screwed credit rating) you can be in an IVA for upto 5 years (with an equally screwed credit rating).

 

Worst I saw was a modest amount of financial trouble - bloke went into an IVA with total debts of £17k, came out of the IVA 5 years later having repaid the £17k debt and about £22k in professional administrator fees.

 

I do wonder how some people get themselves into such a muddle.

Edited September 11, 2012 by Mungler

[al4x]

by believing the ads they see on daytime telly at a guess,

[Paddy Galore!]

so what are the regs on bankruptcy now? i seem to remember it costing around £300 ish aswell.

[Muggins.]

"IVA" means "Death of a thousand cuts and screwed credit rating".

 

It's just like bankruptcy, but whereas you can be in and out of bankruptcy in under 1 year (but with a perma screwed credit rating) you can be in an IVA for upto 5 years (with an equally screwed credit rating).

 

Worst I saw was a modest amount of financial trouble - bloke went into an IVA with total debts of £17k, came out of the IVA 5 years later having repaid the £17k debt and about £22k in professional administrator fees.

 

I do wonder how some people get themselves into such a muddle.

Because the cost of everything has risen more than their earnings have. I`ll bet more than half the families in the country are now living with spiralling debts.

[al4x]

Risen faster than earnings or living beyond their means. It's easy to do and very hard to stop and get out of

[Vipa]

An iva is still a statement of insolvency but rather than your possessions and home being seized to repay at least something to your creditors, you get to keep your stuff.

 

As Mungler says, with the big 'B' you can be in and out in a year, with an iva you re in and out in 5 years.

 

with an IVA, 'most' of your creditors must agree to accept normally a 25% satisfacton. I.e. if you owe 100k, they will normally want at least 25k back to agree to it, they rarely don't.

 

For 5 years, your financial affairs will be scrutinised by an insolvency practitioner who will work out a budget for you and give you a weekly/monthly subsistence allowance with everything else going to your creditors. Any changes to your income etc must be notified... When I say subsistence, I mean subsistence.

 

if you fail to adhere to the terms of your iva you are usually automatically declared bankrupt and your possessions can then be seized.

 

I personally know a couple of people who have done it and their lives have been hell for 5 years. The stupid thing is, if they had just called their creditors they would have frozen the interest and given them drastically reduced payments. They would have probably ended up showing as a default but after 6 years that disappears off your record, satisfied or not! If you look at a mortgage or loan application, the question is.. Have you 'ever' been declared bankrupt or entered into an arrangement with your creditors (IVA)... So, your credit file is screwed, technically for life!

 

There is significant money to be earned in every layer, so there is a real incentive to persuade people to enter into IVAs. If I go and see a client who is in financial difficulty, I get them to agree to do an IVA, make a phone call, and then earn 1k! It's that simple! So there are hundreds if not thousands of people being talked into entering into IVAs when really it was not necessary and their credit file is screwed for life!

Edited September 11, 2012 by Vipa

[dazza]

My sister and her husband have found themselves in a bit of trouble with debt since he lost his job..They have been told to apply for a I.V.A but are not sure what it is or does and neither am I..Any help to explain would be great..Thank for now..MARTY..

 

Phone Ally McCoist he knows all about IVA's

[vole]

Paypal mentioned as a debt company ?

Edited September 11, 2012 by vole

[Mungler]

Because the cost of everything has risen more than their earnings have. I`ll bet more than half the families in the country are now living with spiralling debts.

 

No I get that bit. That's unfortunate and it happens.

 

It's the signing up to these debt restructuring monkeys and turning a bad situation in a terrible situation.

[four-wheel-drive]

I think that someone said on the radio the other day that it cost £500 to go bankrupt this person was saying that the problem is some people cannot even afford to do it if you are in a lot of debt and have neither friends or family willing to lend you the £500 then you are in real trouble.

[Vipa]

I think that someone said on the radio the other day that it cost £500 to go bankrupt this person was saying that the problem is some people cannot even afford to do it if you are in a lot of debt and have neither friends or family willing to lend you the £500 then you are in real trouble.

 

Yep.. I have always found that part od the process slightly 'odd!'

[Brown Sauce]

Can't see if it's been mentioned, but for an IVA to setup 75% of the creditor must agree for it to be entered into. Listen to what Vipa has said, IVA's definately aren't the easy way out.

[Cottonseed]

so what are the regs on bankruptcy now? i seem to remember it costing around £300 ish aswell.

 

The fees for bankruptcy can go into the tens of thousands.Both the Government and Receiver have to be paid pro-rata to the debts involved. An IVA through a member of the Insolvency Practitioners Association will be nowhere near the same amount.

[Sprackles]

The fees for bankruptcy can go into the tens of thousands.Both the Government and Receiver have to be paid pro-rata to the debts involved. An IVA through a member of the Insolvency Practitioners Association will be nowhere near the same amount.

 

In an IVA if there are assets suh as property then usually a remortgage at the end of the IVA is required to help pay off costs and as such the unfortunate may find themselves out of the frying pan and into the fire with a total outlay of many more thousands than the original debt.

An IVA is suitable only for a very tiny proportion of those unfortunate to find themselves in the mire.

 

Contacting creditors is essential and usually they will help with smaller payments but this will not last long before they re-evaluate and sell it on if you cant pay up.

They get tax breaks for doing so and also money for the debt and its cheaper in the long run for them too.

Enter the Debt purchase companies who will lie and threaten and add extra charges on to get your money...or at least attempt to.

There are ways to fend them off but again as I said previously, visit Consumer Action group for all the help you will need...FREE..

[Vipa]

In an IVA if there are assets suh as property then usually a remortgage at the end of the IVA is required to help pay off costs and as such the unfortunate may find themselves out of the frying pan and into the fire with a total outlay of many more thousands than the original debt.

An IVA is suitable only for a very tiny proportion of those unfortunate to find themselves in the mire.

 

Contacting creditors is essential and usually they will help with smaller payments but this will not last long before they re-evaluate and sell it on if you cant pay up.

They get tax breaks for doing so and also money for the debt and its cheaper in the long run for them too.

Enter the Debt purchase companies who will lie and threaten and add extra charges on to get your money...or at least attempt to.

There are ways to fend them off but again as I said previously, visit Consumer Action group for all the help you will need...FREE..

 

However... no one, fresh out of an IVA would be able to get a mortgage. Maybe 5 years ago but not any more, so that kind of blows that requirement out of the window!

 

I also take exception to your statement:

 

"Enter the Debt purchase companies who will lie and threaten and add extra charges on to get your money...or at least attempt to."

 

Most of the DCAs I deal with (and it's a lot, I also used to be a senior manager for one of the biggest) are sensible and not overly threatening. I haven't come accross any (other than doorstep services) that have added on excessive fees. They call and demand more money, but as long as you can satisfy them that you are paying what you can and that all creditors are being treated the same and in proportion, they will (have to) back off. At the end of the day, it benefits no one to force you into bankruptcy. Also, let's not forget that it's not YOUR money they are trying to get.... It's THEIR money they are trying to get back!

Edited September 12, 2012 by Vipa

[Sprackles]

Vipa, you may state your view and I mine.

Both my experience and TV exposees would indicate mine are more accurate.

Lowells, 1st credit, Cabot, Mackenzie Hall, I have experienced them all.

 

They are lying scum, they will attempt such tricks as obtaining CCJS at a last known address by default and then miraculously finding your new address on obtaining judgement.

 

Secondly regardless of the law, buying someone's debt is immoral especially when pennies are paid for pounds....I will never pay a DCA a penny since I never had any contract with them so its not their money that was lent out.

 

Again good folks of PW....Consumer action group and search the above companies.

Edited September 12, 2012 by Sprackles