This is my IVA story, I tell it to hopefully help anyone who is thinking of entering into a voluntary arrangement.
For several years, even though I was earning a large salary, I was aware that we were spending more than we were earning. I had done all the usual things, consolidation loans, zero percent credit cards and even a secured loan. At the end my debt had risen to around £160,000 of unsecured borrowing.
At the time I called an IP (which took several months to pluck up the courage to do) I was still being offered credit and loans and my credit rating with Experian was 999/1000. Banks and credit card companies were sending me almost daily offers of further credit and even though my bank was fully aware of my financial position they were still increasing my overdraft facility and continued to offer more credit.
I knew I was hurtling towards an impossible situation and having researched all the options I knew an IVA was the best solution. Having looked at all the organisations and companies who offer IVA help, I eventually contacted the CCCS and they confirmed that an IVA was the right solution for me.
It has taken almost six months to organise. My first call to the CCCS was September 2008 and my creditors meeting was a week ago (March 3rd 2009). This is in part my own fault - I thought I would have a windfall coming but this never materialised so I stalled until I was certain.
There were 13 separate creditors. £160,000 of unsecured borrowing and at the creditors meeting the only modifications involved changing details for the IP and not for me. The IVA was approved with a return to creditors of 17.9p/£
The only awkward people were Tix (representing M&S Money) – they wanted me to cancel my private medical insurance of £47 per month and put this money into my IVA payments. I argued that this was to provide private medical insurance for my two children, wife and myself and I refused to cancel it – they relented and agreed to vote in favour of my IVA. Eventually 86% of the creditors who voted agreed to the IVA and it was duly passed. My IP rejected the modifications being proposed by American Express as they did not hold the majority vote and the alterations they proposed were unrealistic.
My payments will be £375 per month and I am paying £15,000 in cash from my pension when I turn 50 (in three years time).
Prior to setting up my IVA I didn’t get too much aggressive behaviour from any creditors, just the odd letter demanding payment. I used BT’s fantastic ‘choose to refuse’ service where you dial a code when someone calls and they will no longer be able to get through – they get a rather nice ‘the person you are calling does not want to talk to you’ message!
Although almost all companies said in letters that they would send someone round to my house, in fact only one did – Sky Card (Barclaycard). He arrived and asked for me, I went to the door and told him if he wanted to discuss anything with me to put it in writing – he left politely and I never heard anything else from them – they voted in favour of the IVA.
In trying to decide if an IVA was the right way forward I did some calculations:
• If I went into a DMP – it would take around 29 years to repay everyone – this was a non-starter.
• If I went bankrupt I would have the stigma and embarrassment of family and friends, my employer and others finding out. I preferred not to do this unless it was absolutely the only remaining option.
• I calculated the interest on £160,000 at 12% per annum – the total annual interest would be in the region of £19,200 – over five years this would be £96,000. The total repaid would amount to £256,000. I divided this sum by the 60 payments I would be making and it would be £4,266 per month – compared to my IVA payments of £375! As you can see this became a very attractive proposition. Even IF I could get all my creditors to freeze interest and charges, the monthly payments over 5 years would have been £2,666
I Hope by sharing my IVA story it’s helped someone. Although I’ve not posted on this forum before, I’ve been reading your inspirational stories for about a year and they really helped me. When I thought there was no solution, I was encouraged by other reader’s stories. I only hope this story inspires others.
Finally I would like to say to everyone who is thinking of doing this – there really is no need to pay any company for this advice. My experience of the CCCS was absolutely fantastic. They are always there to answer the phone, their advice has been 100% accurate at all times. They are non-judgmental and helpful. When I read some of the horror stories of people on this site and elsewhere using ‘ambulance chasers’ for this service I ask myself WHY, When there are charitable organisations such as the CCCS would anyone choose to pay a company for the same advice?.
Good luck to everyone else in entering your IVA and if I can be of any help please feel free to post a question for me.
IVA Completed!
