Interest Rates at 5.25% !

[DebtDummy]

Does this mean my IVA proposal will be increased to account for this? And what if my husband and I can't afford the new amount? Why was it raised with consumer debts at an all time high? Gosh, some people are struggling as is and didn't need this increase. Thank you very much all for answering.

[kezza]

It shouldn't do as interest is frozen while in an IVA. It will make a difference to your balance if your creditors meeting has not yet taken place.

Your disposable income remains the same regardless

[DebtDummy]

Unfortunately, the creditors meeting has not taken place.[:(]

[kezza]

Well depending on how long it takes will depend on how much is added to your total balance and so unfortunately alter the p/£ that you pay into your IVA providing it is accepted

[MelanieGiles]

Hi guys

The interest rate rise is unlikely to affect an Individual Voluntary Arrangement proposal which is in its final stages of preparation, as the banks and credit card companies don't always follow on with an immediate rise.

But if you are a home owner, and are facing larger mortgage payments as a result of today's bad news, this will affect your disposable income which will affect your IVA.

A BIG NOTE TO ALL PROSPECTIVE IVA APPLICANTS - MAKE SURE THAT YOUR IP TAKES INTO ACCOUNT TODAY'S 25% RATE RISE WHEN PROVIDING FOR YOUR MORTGAGE PAYMENTS, AS THIS MAY CAUSE THEM TO BE UNAFFORDABLE FROM DAY ONE. DON'T FORGET THAT YOU, THE DEBTOR, CAN ALSO PUT FORWARD MODIFICATIONS AT CREDITORS MEETINGS TO LOWER PAYMENTS AS A RESULT OF THE RISE, IF NECESSARY.

See more about my comments on today's rise on my Daily IP Update on my blog.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[jamesfalla]

Debt Dummy

Todays interest rate rise will really have very little effect on people who are renting. In these circumstances, your proposal will not be effected as it is based on what you can afford to pay (within certain perameters), not what you owe.

However, a very important point has been highlighted by Melanie. If you are a home owner and paying a mortgage (and you are not on a fixed rate), your payments will increase. You need to rememeber this if you are currently putting together your expenditure budget in preparation for your IVA.

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions, with extensive experience of solving personal debt problems over the past 10 years. I am regularly featured on BBC News, Finance Programs and Radio.

Visit my blog at: http://jamesfalla.blogs.iva.co.uk