Am I right in saying that an IVA is a government backed scheme? Is it therefore better than taking on even more debt to consolidate (Lower my repayments)? and what are the disadvantages of an IVA if any?
An IVA will stay on your credit file for 6 years and you will probably struggle to get credit for a period afterwards. It is a legally binding contact between you and your creditors and they will not be able to take action against you unless the IVA fails.
You can't take out any further credit during the term of the IVA and may have to release equity in the 4th year if you own a property.
Speak to an IP who will advise you of all your options. I doubt any one would advise consolidating your debts. Have a look at the reviews on www.iva.com.
Last edited by LoneRanger on Sun Oct 19, 2008 9:02 am, edited 1 time in total.
I would say any debt plan be it IVA, DMP or BR will be better than borrowing even more to consolidate. I don't think adding to the debt works for anyone, as its tempting to keep using the credit cards etc and building up even more debt.
Steve has covered most points of an IVA, I would add that you may be able to take credit to finance a car for example whilst in an IVA. This has to be done with the IP's permission though.
You will also appear on the insolvency register, but at least you know you will be facing your debts and looking towards a debt free life in 5 or 6 years time.
Look at the website Steve has advised. It really is important you get the best advice and use a company you are confident with.
If you want to post more details maybe an expert can help further.
Good luck xx
Ooops did mean BR - thanks Jan. xx
Last edited by Julie on Sun Oct 19, 2008 9:37 am, edited 1 time in total.
Just to add to the other two - I think Swans girl meant to put BR as one of the options.
It is government backed.
Welcome to the forum by the way.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
A consolidation loan is ok if you are sure you can afford the repayments without leaving yourself short, and you are disciplined enough to cut up you your credit cards. Not many people can do that, so I think that an IVA, BR or DMP is the better choice.
I think thats where the problems start. If I could consolidate I bet i would say I would cut them up but when it came to it i have a feeling they would still be there 'just in case'.
I know someone very close to me who tkaes out loans to pay off Credit cards with intentions of cutting them up, but guess what? They still use them. they manage at the moment but time will tell.
If you do choose to consolidate think carefully about and make sure it is the right thing to do
I took out a consolidation loan - didn't cut my cards up, I was only going to use them for an emergenc!. I seemed to have a lot of those, usually involving clothes and holidays.
It takes a strong person to cut them up and take no further credit, and if you were that strong, you wouldn't be in that position in the first place!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I totally agree, you would have to be very strong willed not to use the credit cards again. Besides, are consolidation loans easily available in the current financial climate?
I think (my opinion) its very dangerous to take out a consolodation loan. The temptation will be still there.
With an IVA, the temptation is removed.
Ok, you have to live on a very strict budget but in some ways thats good. Its like a rehabilitation process and you will quickly learn that if you dont need it you dont buy it.
The IVA will stay on your credit file for a period of 6 years from the date of acceptance and as others have said, if you are a home owner with equity, you will be required to release some of that equity at some point during the term of the IVA for the benefit of your creditors.
If you've got enough equity, I imagine you would be able to do a secured loan reasonably easily.
Ocean Finance still advertise on TV. We did ours with them, and they still send us letters every couple of months inviting us to take out a further loan.
They get consigned to the recycling!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I agree also, you need great discipline to not use cards or credit again, that is how things reached the point they did for us.
The iva has taught us great discipline already, no choice, as mrs says says, the opportunity for credit is removed with an iva. I have found life much more calm and settled... yes there are worrys that something will happen to burst our bubble, but nothing like the previous stress we had with loans and struggling to pay.
All the best. The more opinions and research you do into the best solution will enable you to make an informed decision on the best way forward for you.
I think we have all been there Ang, me included. I personally feel that now that i have lived without credit getting on for near to 2 years and 15 mths into my IVA that when i hopefully am finished in just over 3 years time that credit will not be within my vocabulary. I wish each and everyone of you good luck, good fortune and an uneventful pathway in your IVA.
15 down, 45 to go
Om shanti, namesté, good luck to all who are embarking on the IVA journey, it isn't always an easy one but the outcome is the best.
IVA COMPLETED August 2012, received Completion certificate 18.4.13.
An IVA is not really a government backed scheme - as if often spouted in the glossy advertising used by some debt management companies - however it was created by statute and in the right circumstances can be a very good way of repaying unaffordable debts. Most creditors are amenable to supporting IVAs so long as the very best offer you can afford is being put forward.
