www.iva.co.uk

Do I need to be insolvent for an IVA to be accepted? The reason I ask is because I have substantial unsecured debt (about 35K) which I am paying to 5 creditors at the minimum each month (which is all I can afford). At this rate it will be a burden for at least 20 years!
I haven't defaulted on any repayments (ever) but can only just afford to continue, so I am not insolvent nor in arrears. But a minor change in my financial circumstances (which is on the horizon) could result in a debt crisis almost overnight. I would like to rid myself of this burden before its too late but as I'm not in arrears or insolvent would it still be possible to go for an IVA?

Are you using credit for everyday expenses? We didnt miss any payments but were using credit cards for groceries and fuel then making minimum payments then using cards again!!

Paul

Thanks plasticdaft.

We have in the past but not at the moment. I have a variable income so in any one month I might need to use cards but not the next month. Will that make a difference as to whether I could go for an IVA?

You could do worse than phone a few companies listed at www.iva.com and see what they say,the figures often look worse when you write them all down,so make up an accurate income and expenditure before you make a call.

Paul

Chatting to a few IPs is a great idea. It's only once you've spoken about the specifics of your case that someone can advise on the best course of action. If an iva isn't suitable you could always look into a dmp which could get interest and charges stopped and restructure the debt to an affordable level.

You say you are just managing the minimum payments each month ... is this covering the interest charges ? As I recall the minimum payment I was making to MBNA wasn't quite doing that and the debt was still actually increasing month by month [B)]

You don't have to be in arrears to go for an IVA, if you are only just making the minimum payments then you do need to get something sorted out.

Visit the link posted by plasticdaft above and ring one or two companies from there. The advice is free and impartial.

Thanks all for the replies.

I thought an IVA was perhaps like bankruptcy, which wouldn't be granted if you're still solvent. If that's not the case I'll contact some IVA companies and go from there.

You were certainly get some good advice Rod.

Hi
90% of people I talk to are up to date with all payments but the reality is that they are using credit each month to get by and are actually getting further and further into debt.
Filling out an income and expenditure form, excluding debt repayment, will show if you have enough left over each month to meet your contractual payments or not.If there is a shortfall then you may be insolvent and an IVA suitable
Regards

I didn't miss any of my repayments right up to the end, however, was paying for day to day items on credit cards and my minimum repayments accounted for 90% of my income, so decided I was effectively insolvent as I wasn't able to continue to service the high levels of debt. Most of my creditors were surprised about sudden default, however, as it was so sudden and then the IVA was agreed I didn't get any CCJ's (just defaults)

I think perhaps an IVA or Bankruptcy would be the best options (unless you own your home).

Good luck, you are making the rights by exploring all options now, before it goes out of control.

An IVA will not be possible for you if you are still solvent - the definition of insolvency being an inability to service your debts as you fall due (without relying on new credit sources to do so). If you can maintain the minimum monthly repayments to your creditors from your disposable income you are not insolvent at the moment, but if your situation changes it could be a different story of course.

Thanks Melanie.

You've confirmed what I thought. I can service my debts without resorting to further credit, albeit at minimum repayments, so I am still solvent.

However, I have a significant tax bill looming which I won't be able to pay. At that point I will be insolvent so presumably an IVA or bankruptcy would be likely? Can a tax debt be taken into account for an IVA?

Is the tax bill yours, ie do you trade as a sole trader?

Yes - the tax bill can be taken into account, as will all of your tax bill for the current fiscal year as well - ie 2011/2012. If you will be unable to pay the bill - presumably you are talking about your July 2011 instalment, then this may well throw you into insolvency and therefore an IVA could be possible.

Are you compliant with all earlier tax returns?