I've had a proposal from Creditfix to consolidate all my monthly debt payments into one monthly payment of £124. This hasn't been approved by creditors as yet as the initial setup is still underway. My question is, what's the catch? We're looking at a downsize of debt payment outgoings from £400+ to £124. Surely there's a catch somewhere, beyond the 5 years no credit etc (which would be a good thing for me!)
Any equity in your property and which years protocols the IVA is controlled by should be mentioned) also if statutory interest is excluded in the proposal or not.
Read the protocols as well as the agreement to fully understand the process.
My Blog details, the route I took before IVA, how I choose my firm, equity release advice (year 4-5), challenging the CRA's keeping IVA on credit file once gone from insolvency register
IVA ended August 2015. Would recommend McCambridge Duffy
There is really no catch -- but it isn't the bed of roses it first might appear. If your income increases, so will your payments, which includes half of any overtime or bonus payments you might get. Also, if great aunt Muriel pops off and leaves her fortune to you, this will also have to be paid over, up to the amount required to cover the full debt plus fees and possible statutory interest.
Also as mentioned above, if you are a homeowner, you might be required to release equity towards the end of the IVA.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Also if you own your own property there will be a equity release clause. You must read all the proposal thoroughly and be sure you understand the terms. A lot of people get caught out, because they are so relieved to get some help and support that they fail to read the proposal properly then get caught out with a years' extension or the pressure of realising additional funds. Having said that an IVA was a lifeline to me. I went from paying over £800 a month down to £500, but then over the time with wage increases etc...and the completion of a secured loan the last few years I was paying almost £900 per month (must stress we could afford this as when the secured loan was complete those funds became available to the IVA).
If you inherit any money during the lifetime of the IVA this will be payable into it.
For me the IVA was affordable and I had an understanding IP who helped me through a fair few dramas within the IVA Have a good look around the forum, speak to a few companies. An IVA is an excellent debt solution but isn't for everyone, but worked very well for me
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Catches- Windfalls, Equity position, Credit rating affected for 6 years, Payments may increase if disposable income changes.
Benefits - potentially resolved within 5/6 years. Balance not payable is written off. Bankruptcy avoided. Can also settle early if able to do F&F once some time under belt.
Just to be clear, we haven't sought an IVA, it's been proposed to us Over the phone by Creditfix.
We meet our obligations and are not in any danger financially. Our only issue is our overdraft with our bank, it's been our biggest crutch since the first time my wife left work to go onto maternity leave 3 years ago. We haven borrowed above and beyond our incomings. Just that our wages are enough to pay bills and not much else. Every month our wages clear the overdraft balance and leave a small amount left over, but once our DD payments etc start going out, it puts us right back into the overdraft again it's a never ending circle.
An IVA to bring down our monthly repayments sounds great on paper but are we really at the stage where it's our best option?
I don't think an IVA is the option for you at this time. I would speak to some of the experts on here such as Andy Davie or Michael Peoples, I am sure they would be able to advise of the best way forward for yourselves.
I, too, would suggest a chat with Andy / Vincent Bond, as well as Michael from McCambridge Duffy. It is important to chat to a few companies to see which you "gel" with and also get slightly different perspectives.
An IVA is only one solution and others might be better suited to your circumstances and debt level.
Did you initially contact Creditfix, or did they ring you "out of the blue" ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
We did not contact these people at all. They phoned me. Usually I don't answer strange numbers but as I was at home on the 2 week paternity leave I gave it a listen. Sounded good so set up a meeting etc.
Since then though, I'm having doubts as to whether it's for us or not.
Total owed which the IVA covers is £15000. Due to be cleared in roughly 60 months.
You should speak to other companies ! Are you actually insolvent ? Do your outgoings exceed your income and are you relying on credit to survive ?
If not and things are "just a little bit tight" and you want a little more spending money left over each month, an IVA might not be right at all ... and you might find that £124 increases.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
It may be the right option for you if you can only afford £124 per month and your contractual payments are £400. On £15,000 the amount you are repaying would barely cover the interest so you may never be debt free. At least an IVA gives you light at the end of the tunnel and you can plan ahead.
There are downsides which should always be discussed but from the basics you have listed it does seem a reasonable option. By all means get a second opinion to make sure this is the case and best of luck with the meeting of creditors.
It's interesting that your initial post refers to 'consolidating your monthly debt payments' because an IVA is very distinct from a consolidation loan. I'd certainly recommend a review by one of the IP firms who post here on the forum. It may be that an IVA is not the best option under the circumstances but if nothing else it will confirm your options before you decide.
Specialist Mortgage Advisers. Highly Commended at the British Mortgage Awards.
it's a never ending circle. 
