how much chance do you think i have for an iva ?

[leslie]

hi, i have debts(credits and loans) of 42k, my salary after tax is 1750 per month and monthly arround 1150, disposable income 650, i want to go for iva, how much chance do you think i have? and how much will i need to pay every month?

thanks!

[MelanieGiles]

Hi leslie and welcome to the forum

As you would be paying over £39k over a five year period, against debts of £42k, I suspect that your creditors would be more mindful to accept a DMP rather than an IVA, but you should get your circumstances checked by an insolvency practitioner to ensure that £450 is really affordable. It is important to ensure that you leave sufficient allowance for contingencies such as house and car maintenance, medical expenses, sports and leisure and sundries and emergencies. All of this could add up to more than £100 per month depending on the size of your family.

[abc]

If you have disposable income of £650 per month this will give you £39,000 over five years which would pay your creditors in full, subject to interest and charges.

I guess that your current monthly repayments to your creditors is more than £650. Might be worth looking at speaking to some of your creditors that you have loans with and asking if they will reduce the interest rate and/or extend the loan over a slightly longer time. You will probably find that you will be able to get some of your creditors to reduce the monthly repayments by the above methods and you will be able to pay your creditors in full without the need of a formal procedure like an IVA.

[aguise]

Hi leslie
Just came to say hello and welcome to the forum.
You will get great support and advice as you have already. Good luck with finding the right solution.

Ang

[leslie]

thank you very much for your help!

[leslie]

i prefer iva because the interest is frozen, not like
DMP, only the minority creditors will decrease the interest and it is informal.

will they say no to my proposal because i have large disposalble income?

in the meantime, i will recalculate my expenditure sheet, thanks!

[Viki.W]

Hey Leslie, welcome to the forum. I suggest you give Melanie a call as her team will be able to go through your expenditure with you to make sure you have included EVERYTHING, they can then go through all your options with you. Good luck, Viki X

[aguise]

Hi again Leslie.
I think that creditors would not be likely to accept an iva when they could see the debt paid in full over just a while longer.
wait for other answers though as I am not a technical expert.

Ang

[pbeck]

Leslie

Yes, unfortunately creditors have seen too many IVA proposals and they are writing off an awful lot of debt this way. If your debt can be paid off in full in under 6 years with a DMP they are going to want you to at least try a DMP first, only then if some of your creditors refuse to stop charging interest or accept the DMP payments would they consider an IVA.

I had one of my IVA clients rejected because the creditor said they wanted people who could repay their debts in under 10 years to go for DMP rather than IVA.

Thees days creditors are being increasingly commercial and want to get back as much as possible, they know that many people who are rejected for IVAs still go on for DMPs anyway.

[MelanieGiles]

Which creditor was that Philip - e-mail me if you don't want to publicise this. What a strange attitude! I have had a few creditors saying lately that they would like to see the 5 year period extended under IVAs, but it makes you wonder where this will all end up!

[pbeck]

It was MBNA, I forget whether that was in relation to an MBNA branded debt or one they manage on behalf of another company or indeed whether that makes any difference. Possibly also depends on whose looking at the papers that day.

[leslie]

just called an IP's office in london, his assistant says never find this is a problem, only have problem with people do not have enough disposable income, she also says, DMP takes longer with increased interest which is more risky in the creditors' point of view.

anyway, i booked an interview this Thursday to talk to an IP in london face to face, then decide how to do?

i am worrying DMP is informal, how much likely i will be approved through DMP process?

thanks for all the replys here. i will update my case soon.

[plasticdaft]

Melanie,would creditors not prefer to get their money in an iva over 5 years(if they are getting almost a full 100p/£ return),rather than pushing for a dmp which due to interest and charges not disappearing may well fail during its course??

If a dmp is started the debt could well go up before it starts coming down.

Just wondered.

[pbeck]

What it is is that they want to see people in such situations trying a DMP first then only going into IVA if some of the creditors refuse to stop interest and charges.

Don't forget, IVAs are expensive, and if a creditor sees a dividend forecast of 90p under the IVA, then they will think if the debtor goes to a provider who doesn't charge the debtor fees for DMPs, then under a DMP they should get 100 p in under 5 years.

Also, if a DMP fails, it's no big deal as they don't have any legal basis anyway, another one can be arranged or the payments varied if the creditors agree.

[leslie]

shall i try DMP instead? how much chance do creditors accept to stop interest and other charges? i still prefer iva, for it is formal.

thanks!