Apprehensive about an IVA

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panda_face
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by panda_face » Mon Dec 24, 2018 2:42 pm
Hello all,

Having read a few of the questions on here today and trying to get an understanding of how IVAs work, I've still got one burning question that worries me.

In principle, the whole point of an IVA is to help the debtors strip out some expenses and the creditors to reclaim at least some of the debt owed to them, correct?

With some large expenses (loan repayments etc) freed up, in theory, the debtor could start to save a little? Is the debtor then required to use those savings to pay back the creditors, even if this could then lead to further financial issues?

I don't want to end up entering an IVA with good intentions of actually repaying the debts without constant worry and being able to put money aside for emergencies, if it's then going to be demanded back?

My understanding is, any money you can save during an IVA is yours?

Thanks in advance!!
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kallis3
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by kallis3 » Mon Dec 24, 2018 3:23 pm
Hi,

If you can manage to save, the money is yours. However you need to remember that you have to be frugal and you will have allowances to adhere to and your credit rating will be shot for six years.
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Foggy
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by Foggy » Mon Dec 24, 2018 3:26 pm
Basically, they take your income and allow for agreed expenses per a set of guidelines .... anything left is the IVA payment. They will not fund savings. Any modest savings you manage from expenses (a few quid here and there on shopping etc.) you can save ... if you save too much they will rightly assume that they have set your expenses too high and revise them. You can also save your share of overtime and bonus payments.
panda_face
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by panda_face » Mon Dec 24, 2018 3:50 pm
kallis3 wrote:
Hi,

If you can manage to save, the money is yours. However you need to remember that you have to be frugal and you will have allowances to adhere to and your credit rating will be shot for six years.


Thanks for the reply.

I guess I'm worried that if I save up a decent amount, by trimming out some expenses, they'll take it and then something goes wrong with my car I'll be totally screwed.

I drove an older BMW, therefore if something goes wrong, it's expensive. But then again, things going wrong on any car is expensive. Admittedly I could have a cheaper car to maintain but the costs of changing are just too prohibitive.

I have literally zero savings right now and my debt payments do put a huge strain, so am hoping the IVA will lift some of the burden.
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Foggy
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by Foggy » Mon Dec 24, 2018 3:59 pm
If you "trim out " expenses, you will be expected to pay the "trimmings" over to the IVA: Say if you claim for Sky then cancel the subscription, it would then be added to your disposable income and, therefore, your IVA payment. If you have, say £250 agreed for shopping and spend £200 some months I doubt anyone would notice you stashing the of few quid away, here and there (bearing in mind that some months --- Christmas, for example, that shopping will shoot to £300, to be made up from other months savings (you will not get an increased allowance for the expensive months).

I survived my IVA with "E-Bay Specials" -- almost disposable vehicles, but was lucky most of the time !
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Mrs_Brown
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by Mrs_Brown » Mon Dec 24, 2018 8:22 pm
I have been counting down to Feb / March to stash my council tax money as a bit of a cushion. Last year I saved it but had an unexpected expense which saw me use it. Hoping for none of those now!
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abbiesmum2003
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by abbiesmum2003 » Mon Dec 24, 2018 8:28 pm
I agree with foggy.
Set up your budget with realistic and as true as possible allowances remembering things like dentist, hairdresssers, opticians etc. Things i went years not using as couldnt afford too!
But they all come with an allowance based on your family size.
Like foggy said if you stop using a budgetted allowance such as TVor mobile then that will be added to iva at review. if you have a budget for food, emergencies etc and dont use the full amount you can add thise pounds to savings or be savvy with offers etc.
You shouldnt be able go save significant amounts if budget set correctly but these few pounds will build up during a year.
Wehave survived 5 christmases with three kids and managed by using various means.
It is possible. Ifyou are shown ti be able to save significant amounts they will say budget is wrong and try to increase iva payment so dont make a big thing about having savings. Stixk to your allowancesand be realistic about what you actually have to spend on stuff.
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plasticdaft
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by plasticdaft » Thu Dec 27, 2018 9:29 am
Seem to remember any time we saved up something went wrong and boom went the savings.

Wise to be apprehensive about entering an IVA, it's a massive decision to make and isnt for everyone.

Good that you are asking questions before deciding, so many people only ask question after they have committed themselves!

Paul
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