Considering an IVA

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mark343

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Post by mark343 » Wed Sep 11, 2019 6:53 am
Hi,
I have been considering an Iva for a while as me and my wife have racked up a lot of debt. There is just a few questions I would like to know how quick after entering an Iva can you offer a lump sum payment to end the Iva?

I have a bank account at the moment which has an overdraft on I don’t owe any money to this account and don’t really use it, if i enter an Iva I would have my wages paid in there but as it has an overdraft facility would the Iva have this removed or do they only look at all your accounts with debt?

Foggy

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Post by Foggy » Wed Sep 11, 2019 7:00 am
The bank will remove any overdraft facility. You can pay a lump sum offer at any time, but, if available to you now you could do a lump sum IVA, where you literally make one agreed payment. However the credit files will still be trashed for 6 years, regardless of early completion.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

mark343

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Post by mark343 » Wed Sep 11, 2019 8:07 am
Hi,
I understand that my credit file will be bad for 6 years and as I am nearly 36 this is why I have been trying not to enter an Iva as I would like to own a home one day. The thing is I owe roughly 50,000 and I make the minimum payments but just feel depressed all the time as I’m not getting any further with the debt. On a debt of this amount what is likely to be accepted for a lump sum? I don’t have any assets have two kids and only earn an average wage.

Lisa Thomas

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Post by Lisa Thomas » Wed Sep 11, 2019 8:40 am
Where will the funds be coming from for the lump sum?

What is the split of the £50k debt between you and your wife - is it all joint or sole or a mixture of the two?
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk

Foggy

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Post by Foggy » Wed Sep 11, 2019 9:05 am
If, for instance, you entered a "normal" IVA you would be basing a full and final offer on the agreed monthly payment multiplied by the number of remaining payments, plus 12 in lieu of equity release. This can be rounded down a little. Of course, in your case, you would not need that extra 12 months.

What would be acceptable as a lump sum IVA has to be looked at in conjunction with your own particular circumstances as well as the source of the lump sum and the amount available --- but should be based on the best you can manage. Just thinking out loud, a great proportion of standard IVA's offer, in repayment, something of the order of 35% of the original debt --- but I have seen as low as 9% (on a large debt) and it goes as high as 100%, based on the ability to repay. But ... working on 35% as seemingly 'acceptable', a lump sum at the outset of around £18k might (might) do it. How such a lump sum would be handled depends, among other things, on the split of debt between you and your wife. There is no 'black and white' and I would strongly suggest a chat with an IP.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

mark343

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Post by mark343 » Wed Sep 11, 2019 10:06 am
The debt is split I owe roughly 35 and my wife 15. The reason I want to end the Iva as soon as possible I’d because we owe her parents money as well. I spoke to step change a while ago and they said I can’t be seen to prefer payments to her parents and that it will be difficult to make the budget allow the £350 per month roughly we pay her parents.

kallis3

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Post by kallis3 » Wed Sep 11, 2019 10:11 am
You can't prefer them over your other creditors. They can either be included or agree to hang fire until the end of your IVA.

Where would the money be coming from?
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

Foggy

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Post by Foggy » Wed Sep 11, 2019 10:16 am
As said, you cannot prefer your parents and, I suspect, creditors might ask them to step aside and wait until after the IVA has concluded. Where would you be getting a lump sum from ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

mark343

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Post by mark343 » Wed Sep 11, 2019 10:35 am
I don’t have a lump sum I was just enquiring to see what the amount needed would roughly be. When we spoke to stepchange a while ago they said for the amount we owe we would probably make an offer of £5000 as it’s 10% of the debt this was once we are in an Iva. This is completely different sum to the £18000 quoted on here I am just thinking I don’t want friends and family knowing my situation but I could ask to borrow £5000 down the line and then pay them back but not £18000

kallis3

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Post by kallis3 » Wed Sep 11, 2019 10:40 am
I think you would be struggling.
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

mark343

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Post by mark343 » Wed Sep 11, 2019 11:28 am
Ok that’s not good news for me then. Does anyone on here know how you stand of your a director of a ltd company, the company hasn’t started trading yet. If the company started trading and making money can the Iva take money from this?

Foggy

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Post by Foggy » Wed Sep 11, 2019 11:29 am
Wed Sep 11, 2019 10:35 ammark343 wrote:
I don’t have a lump sum I was just enquiring to see what the amount needed would roughly be. When we spoke to stepchange a while ago they said for the amount we owe we would probably make an offer of £5000 as it’s 10% of the debt this was once we are in an Iva. This is completely different sum to the £18000 quoted on here I am just thinking I don’t want friends and family knowing my situation but I could ask to borrow £5000 down the line and then pay them back but not £18000
Stepchange are getting somewhat ahead of themselves in that the amount of an acceptable offer to be made while in an IVA cannot be guessed until your disposable income and, therefore, the IVA payments, has been calculated properly.

If you go for an IVA, or both go for IVAs, then it is best to go in with the thought that you are going to be in the arrangement(s) for the full term --- then, if an opportunity to make an offer arises at some point, it would be a bonus.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

Foggy

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Post by Foggy » Wed Sep 11, 2019 11:33 am
Wed Sep 11, 2019 11:28 ammark343 wrote:
Ok that’s not good news for me then. Does anyone on here know how you stand of your a director of a ltd company, the company hasn’t started trading yet. If the company started trading and making money can the Iva take money from this?
The IVA will have a call on any salary the company pays you as well as any dividend, in as far as it forms part of your overall income. Your IP will also need to see the companies returns to ensure that you are paying yourselves a fair dividend and not 'storing up' assets in the form of unpaid dividends in the company coffers.

Whilst I was in my IVA, as well as the PAYE job, I operated a partnership and the income from that was divide three ways: third for HMRC, third for the creditors and a third for me.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

mark343

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Post by mark343 » Wed Sep 11, 2019 11:46 am
Ok, so the only pros of the Iva are making the debt more manageable but lower repayments. The budget won’t allow for you to have hardly any spare income and if you can make any extra money then it will be accounted for and taken away. I wish I could just turn back time.

kallis3

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Post by kallis3 » Wed Sep 11, 2019 12:14 pm
Don't we all!

If you can save money from your allowances it will be yours to spend as you wish. Any extra earnings will be taken into account but I doubt they will take all of it.
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
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