1)How does equity released from my property affect my mortgage repayments?
2)Does taking out an IVA mean I have to become insolvent?
3)Does taking out an IVA have any affect on pensions?
4)How much do Debt Management Companies normally charge for setting up IVAs and what kind of payment terms do they usually offer?
5)Will I be restricted from taking out any more credit during the term of the IVA?
Hi Janette and welcome to the Forum.
1. If you are able remortgage in the final year and release equity your mortgage payments are not expected to increase by more than 50% of your IVA payment irrespective of the amount of equity. However, very few people can raise equity and most IVAs are being extended by twelve months and then closed down.
2. If you are unable to repay your debts as they fall due and do not have sufficient assets to sell and repay creditors, you are insolvent whether you go bankrupt or enter an IVA or a DMP. An IVA is a formal insolvency but this does not mean a DMP does not make you insolvent.
3. Ypu can remain in a pension scheme provided you pay the minimum contractually payable to stay in the scheme. You will not be allowed to make additional voluntary contributions [AVCs]. This is not set in stone and does depend on factors such as age but your IP will discuss all the details.
4. Only licensed insolvency practitioners can set up an IVA. Debt management companies can act as introducers or set up a debt management plan and their charges vary.
5.You cannot obtain credit during the IVA without the consent of the IP. The reasons for the credit and the availability are factors that would be discussed.
Hope this answers your questions but anything else and contact an IP for a free chat.
1) You will often be asked to get a remortgage, which is likely to increase the amount or duration of your repayments.
3) You must talk to your IP about this when you are drafting your proposal.
4) Debt Management Companies don't set up IVAs, they are set up by Insolvency Practices. There are fees associated, but these are included in your monthly payments and will generally not affect the amount that you repay or the duration of the agreement. They vary on a case by case basis, and will be discussed in full by your IP. You should not have to pay an up-front fee for their services.
5) Talk to your IP about this and assume not unless told otherwise. In some modern proposals there is occasionally a small amount of flexibility, but in many proposals you will breach the IVA if you obtain any further credit, and your IVA may fail.
I recommend that you speak to an Insolvency Practitioner to discuss your problems.
Visit www.iva.com for a list of companies and reviews and give one r two a ring. The advice is free and impartial.
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