amount to repay on iva

[mumoftwo]

hi , i have worked out i can afford to repay 400 a month on a 60 k debt this equates to 40 % ( i think) would anyone be able to share with me debt to payment ratio, how is it worked out do you think this would be accepted ? in your experinces what was the total debt and what wasthe amount required to pay? thanks for help.

[iva experts]

Hello,

An IVA stands for Individual Voluntary Arrangement, which means each IVA case is different as it relies on the circumstances of the individual.

The level of contributions to the IVA would depend on how much you can afford, taking into account your monthly expenditure.

In your case £400p/m may be enough, however it all depends on factors like what you spend your money on, who your creditors are etc.

The amount you pay back is called disposable income and is calculated as follows:

Your monthly income -
Your monthly general living expenses (i.e.: rent, bills etc)
=
Your monthly disposable income.

In an IVA process it must be shown clearly that proposing an IVA is better than the option of bankruptcy. I suggest that you call us for more advice on Ph: 0800-072-5988.


Hope this information is of use

Regards. IVA Experts

[mumoftwo]

i took into account all our direct debits gas elec council tax etc then took into account reasonable costs for petrol childcare tax ins etc, a moderate amount towards xmas and emergency and that is what we had left 415 per month to pay our loans etc, the problem i have is that one of the loans is with our mortgage company so i think they may say no.

[neverending]

Hi
I will deal with your first question relating to debt to payment ratio.
You are correct in stating that £400 per month over 5 years equates to 40% of your debt [60 x £400 = £24,000 and this is indeed 40% of 60,000]However the return to your creditors will be much lower due to your IP fees,typically £2500 to set up your IVA and £1200 per year to administrate it.This totals £8500 plus vat,so total is approx £10k.
This is taken from your total payments of 24k,leaving 14k to go to your creditors.This equates to a return of just under 25%,the minimum that is generally accepted.However it depends on your exact debt,your actual monthly payment and your IP fees.
If it helps my IVA total is just above £60k and I am paying £450 per month so you are not a million miles away.
The debt you have with your mortgage co I presume is an unsecured debt ?,if it is secured then you will not be able to include it in your IVA.If it is unsecured then it is possible that they will accept your IVA,even if they do not it may not matter as long as 75% of your creditors do accept it.
As you are a homeowner please make sure that you fully understand the equity release clause put in to your IVA.
IF AT ALL IN DOUBT ASK THE QUESTION
Regards

[mumoftwo]

hi thanks for that, yes the debt withthe mortgage company is an unsecured loan, i dont mind the equity release at the end if the day that is just a remortgage isint it.
i could probably stretch to 450 as i will recieve a minimum pay rise soon which i had forgotten to take into account.
so if my mortgage company agree to the iva for the loan am i right in saying they cantaffect my mortgage?
i havent defaulted on anuthing yet.

[neverending]

Hi
Yes,I do not think that you will have a problem with the mortgage but when you consult an IP then they will be able to confirm this.
Regards

[iva experts]

All unsecured debts must be included in the IVA. As long as you offer your Mortgage provider a reasonable return on the unsecured loan that they have offered you then they are likely to accept this.

This will have no affect on your Mortgage which you MUST continue to pay as normal.

Hope this information is of use

Regards. IVA Experts