How come if you go BR you have bad credit for less time than you do if you take out an IVA? I've been told that IVA will mean no credit for 5 years whilst paying and another 6 after the payments have finished. With BR I've been told it's only 1 year plus 6. Is this correct? Surely the fact that you're trying to pay back your debts should stand you in better position that not being able to pay back anything. I may have got my wires crossed as it's all a bit new to me. Any advice would be much appreciated. I'm currently looking into an IVA. Many Thanks
Thanks for getting back so quickly!! I must have had my wires crossed. I thought I'd be paying my IVA for 5 years then an additonaly 6 years after I'd still have the IVA on my credit where as BR would be one year in BR then an additional 6 years.
I really don't want to go BR and the IVA route would be my preference so much appreciated Skippy13!!
Any defaults on your credit rating must be dated no later than the date the iva is agreed by creditors therefore will drop off 6 years after your creditors meeting date.
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
The one's placed on there after the IVA won't drop off though once the six years from the date of approval though - you have to write to the creditors and get them to remove them.
Some creditors will continue to default.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
The "advantage" bankruptcy has is that you can start taking modest amounts of credit and rehabiliting your credit file even during bankruptcy. After bankruptcy you can do a lot of good work rebuilding your record and learning to cope with credit.
In an IVA, after 5 years you have no debt and therefore not much of a credit record and you have to start from scratch. The ex bankrupt has 4 years on you.
We spoke to an academic who was writing about "debtor isolation" and recommended limited amounts of credit (as with bankruptcy £500) be allowed as part of the rehabilitation process.
Last edited by johnnybriggs on Thu Jul 16, 2009 9:51 am, edited 1 time in total.
No idea about lenders, not sure we considered that [:D]. We were talking about debtor isolation with Michael Green who is/was a University of Wales academic.
So many people I read about are concerned about not being able to order tickets or use the all night fuel pumps and live a "normal life". People tell me solo/electron cards don't do the job.
For the sake of not being allowed to keep a card open with a low limit some choose not to deal with their debts, others fret and wait for the day they can be "normal" again.
If you are allowed limited credit in bankruptcy and can begin to repair your credit rating sooner - that seems unfair and contradictory given the purpose of IVAs.
Surely the point of any debt solution is essentially that you avoid credit? If that is true, then what is wrong with living on cash? I accept that in this age it is advisable to have access to a card that is widely accepted, but that does not mean that it has to be visa/mastercard. I run a Co-Op Cashminder with an Electron card as one of my accounts and it has never been refused anywhere, whether that be online, in Europe on holiday or America on holiday. My own view is that if people are encouraged to live so called "normal lives" by having access to facilities that have the potential to spiral out of control again then potentially no lessons will be learned at all.
This debate may run and run, but if you enter BR/IVA then you are insolvent by definition and the last thing you should be worrying about is access to credit in any way shape or form, I am afraid that I disagree very strongly with your academic contact.
I accept that others may hold differing views but I am definitely seeing a gradual but undeniable increase in "2nd IVA" scenarios.
Regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
I agree Size5. I'm not going to say I'll never have credit again as who knows what will happen in the future - I may need car finance, mortgage etc.
Dave has got 3 credit cards with fairly small balances on and the other day he was working out what card would be the best to combine the balances onto so he was paying the least interest. It really hit home how I don't miss all that!
I presume the £500 'credit limit' in BR is meant for businesses to enable them to trade? If so perhaps maybe it should only apply to businesses and not personal BRs?
hi i have just come back from court after going bankrupt and what i would like to say is i never want credit again and anything i want in future i will wait till i can afford it.
And all those are excellent points. I don't have any answers, only questions. He was/is very influential in the idea of SIVAs although he called them CIVAs.
You're speaking to someone with credit union accounts and a jar of pennies on my desk. I've never been in an IVA but we were interested to know from those who are - what would make IVAs better?
My IVA proposal states " i will not seek to obtain credit of more than £500 during the course of the arrangement other than utility bills without the consent of the supervisor"
Not that i want to but clearly i can
I know Michael Green and worked with him on some research carried out in 2000 which led to the reform of IVAs - initially geared towards SIVAs but which has now ended up largely as the IVA protcol.
He is a much respected academic, whose early views focused on debtor fairness and rehabilitation. I completely concur that temptation to seek credit has little place whilst one is subject to insolvency proceedings, and this view is generally shared by the banking industry. But everyone deserves a second chance, it is just about getting the right balance.
