IVA Accepted but did I do the right thing?

[BIG G]

I got word yesterday that my creditors mtg was a success however PP dropped the bombshell that NRAM insisted on 6 years repayment. I had not picked up on the fact that this was a possibility, this is double the term for a bankruptcy repayment? Two niggling doubts in my mind now did I do the right thing by selecting an IVA over bankruptcy. I have negative equity in my property and as it is no longer big enough so have to rent it out and rent another for me and my family to live in. Also did PP negotiate hard enough. After all the creditors were predicted to get 0p in the £ through the alternative route and have walked away increasing an offer of 27p / £ to 41p? Should I really be feeling this way its just so daunting !

[lem]

Only you can answer that Big G, I am surprised Payplan did not inform you that having NRAM as one of your creditors usually means they ask for a 6 year term, however, you have the right to refuse the modification, you don't have to agree to it if you don't want to.

[ginger3232]

BiG -G - welcome to the forum, i agree with Lem, also a little concerned about your entering an IVA , if you feel there are other options, and your still unsure, 6 years is a long time so this option has to work for you individually.
There are doubts before /after/during an IVA - it a big step to take.

[Foggy]

Hmmmm .. maybe this wasn't all explained clearly enough at the start. As said above, you don't need to accept nrams extra year (what percentage of the debt is their's?) ... remember, with an equity question there is a possibility (however small) of another year in lieu of equity!

Another thing to bear in mind, regarding how hard PP played for you, is that they are funded in part by the creditors themselves -- on the other side of the coin PP have already put a lot of work into this proposal, so would rather see it accepted.

In BR you might (might!) lose the house, but it is in negative equity and potentially could be costing you money anyway if it in untenanted for any length of time over the next 6 years or so. So -- could you cut your losses there ?

There is a lot to think about before getting committed to the IVA -- if you are prepared to go BR if needed, call nram's bluff, refuse the amendment. They will either back down (unlikely) or the proposal won't go through.

I am afraid only you can decide which way is best for you, taking into account all of your circumstances -- but think hard before jumping either way.

[footiemad]

From what you have said it does sound as though you did not fully understand the IVA and I am amazed that you were not told that NRAM usually try for 6 years and then if you had to release equity in year 4/5 it could extend by another 12 months. I am not an expert in this but I too would refuse the modification. I think you should seek advice to ensure that you are certain about which route you should take before agreeing to the modification/IVA. The big question is - how would you and your family be affected if you opted for bankruptcy - I know its a horrible word, but in many circumstances it is the best scenario. Good luck x

[footiemad]

Forgot to say that make sure you read your contract of employment thoroughly because some employers take a dim view of bankruptcy (a lot depends on your line of business ie. whether financial services etc) x

[BIG G]

Thanks for the responses. I was certain it was the best solution I guess I'm just having some last minute jitters brought on by the surprise of the extended period. I have read more notes online to try and re-convince myself that the IVA is better than BR. Its comforting to know there are others here with experience of what I'm going through!

[Tonto]

Hi Big G,

Agree with everything said above, it all comes down to personal circumstances and what feels right in the end. I got in a mess and needed help to get out of it but disregarded Bankruptcy because it might have effected my work and actually I wanted to pay more back, take responsibility for my own stupidity, so to speak.

Looking back know, would i do the same, not sure. My IVA payments finished last summer and I was hoping to get a mortgage next year. Historically, you were precluded for a long long time from getting good rates or a mortgage at all if you had been bankrupt. IVA's were less frowned upon (so seemed a better option for this reason too) but following the financial crisis this has changed and they seem to now carry the same stigma. So was my good intention to pay back more worth it, probably not as I could have saved two years of iva payments towards a bigger house deposit. I guess the important lesson is that I will never, ever get in this mess again.

[BIG G]

I guess my concern is keeping the house although we don't live in it anymore it is still a step on the property ladder and by the end of my planned IVA i will be 12 years through a 35 yr repayment period. Will be touch and go as to whether I have any equity extension at the end though although my IP have said all along its highly unlikely. But I wont have to start all over again. The way it was sold to me was it was the best option as i could keep the house and car, equity release is unlikely I just don't remember them saying it could be 6 years! I wish I wasn't bothered I would just go straight for the BR option and get it over and done with but think I have something to loose.

[Foggy]

I think the IP is correct with the equity question -- it's going to take a few years for a recovery at the moment, so, if you want to hang on to the property ( and I can see why) then the IVA would be the way to go. Pity about the extra year, but, you will get used to that idea, and you still have an end in sight.

[footiemad]

Also you have to remember your credit file will be shot for 6 years anyway, from the start of the IVA, and the same would apply in bankruptcy. We all have doubts to start with, I know I have had a few, but at the end of the day you have to do what is best for you. x

[Shining]

We all have 'have I done the right thing?' jitters in the beginning but (and I know it's easy for me to say) I'm 4 years in now and don't regret it, not even the tough times.

You know what's right for you. Wishing you a smooth journey to debt freedom. x

[Broke of London]

Hi Big G! The shock of the exta year may have thrown you a bit! Try to remember why you chose an iva in the first pace and think about whether the extra year has materially changed anything. You can pull out of the iva if yo don't accpt the sixth year.

Good luck with your decision!

[BIG G]

Thanks guys oh well here we go then 0 down 72 to go, or possibly 84 !

[DMB]

Good Luck Big G. Early days of the iva are hard. Some months are easier than others. I think being a member of this forum will prove invaluable to you,as it has to so many.
Dont be afraid to ask any questions or seek advice.
Again Good Luck