Hi Gibbs,
Welcome to the forum - good advice there from Foggy.
You have provided no indication of your circumstances eg: debt level, your income, amount of assets etc. So this is purely my opinion, speaking as an IVA customer:
Please consider the ramifications before entering an IVA - speak to a few providers to see if it is the right option for you. Remember: It is a form of insolvency, which in turn potentially puts all sorts of restrictions on everything from the ability to open a decent bank account, or even get a mobile phone on contract.
Research other options as well: Debt Management Plans, and bankruptcy as per your financial circumstances.
If you feel the IVA is right for you, go to:
www.iva.com / Google 'Insolvency Practitioner Reviews'. Contrary to what some might have you believe, many don't charge you anything 'up-front'. In any event, their fees are paid out of your monthly IVA payment (and agreed by your creditors).
Speak to 2-3 firms (the IP's that post on this forum are probably a good place to start).
By all means seek advice from the ‘charity’ organisations, but don’t be afraid to approach a private firm if they don't think you are eligible for an IVA.
I have a cynical view of the so-called 'independent' charities (Stepchange, National Debtline etc…) - they are all sponsored/funded by the banks/credit companies, and I can't help feeling that was who’s interests they were looking out for when they advised me. They tried pushing me towards a debt management plan (would have taken 15-20 years to pay off my debt + loads of interest).
Be aware: Stepchange, on the aparently rare occasion that they suggest an IVA, will likely refer your IVA to Grant Thornton anyway - one of the said 'iva factories' that Foggy has eluded to. (Just google 'Grant Thornton Complaints' or have a look at some of the other forum posts here to see why that may not be in your best interests). They are very competent etc. I'm sure (most of the problems seem to be associated with delays in closing the IVA, associated with reclaiming PPI). But with only a handful of IP's to cover their 20,000+ customer portfolio (nearly half the IVA market basically), one-to-one customer service is probably not their strong suit.
Saying all that, I am sure that some private firms will ‘over-sell’ IVA’s to people for whom it may not be the best solution. So be careful to differentiate the sound advice from the sales-patter.
You will have to work out your income and expenditure. Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the Stepchange Budget Guidelines Report here.
https://docs.google.com/file/d/0B7LabJy ... edit?pli=1
(Sorry, have not yet been able to get hold of the latest version that came out in October, but the figures only differ by a couple of quid here and there).
It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc.
If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. Many people underestimate their expenditure and subsequently have difficulty.
Before you get things in motion, it is worth trying to withdraw what you can IN CASH, NOW. This is because many creditors, once they get wind of an IVA application, will freeze your accounts without warning. You may therefore need this cash buffer to tide you over.
Equity release (if applicable): Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage (and in rare cases - secured loan) up to 85% LTV to increase creditor dividend up to 100p in the £. (Subject to reasonable affordability criteria). For most, equity release is not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper). But who knows what the economic climate will be like in 4-5 Years time?
Bank Accounts: If you still are in the pre-approval stage, and any of your debts are with your existing bank, you need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA though (no requirement to volunteer such information).
Important to do this before you are on the insolvency register, as you will then be VERY limited to a handful of basic accounts.
Do not switch to HSBC/First Direct: when they find you on the insolvency register, (which they will), they will make you close your account.
Glad I went the IVA route in the end - can now sleep at night, Hope you get back on track financially soon as well.
Good luck.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
