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Is an IVA a good idea if you are in a fair amount of debt?

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  • Is an IVA a good idea if you are in a fair amount of debt?

    Hi,


    Ok so I'm currently in £13, 000 of debt with Barclays I have been in debt with them for over 6 years and I have finally started a debt management plan. They have now offered me an IVA and have said it will get my debt down to £7, 000. I just want to know what the best option is.....do I save up and approach barclays directly with some money say £8, 000 or should I go with the IVA???? Which one will get me in a better financial position ??

    Thanks Amy:tinysmile_hmm_t2:
    Tags: None

  • #2
    Re: Is an IVA a good idea if you are in a fair amount of debt?

    Hi and to LegalBeagles.....one of the clever bods will be able to help you

    Comment


    • #3
      Re: Is an IVA a good idea if you are in a fair amount of debt?

      Hi Amy/Poodle

      Not a clever bod (they will come along shortly) but an IVA is very serious and if it were me I would suspect Barclays motives, not to mention the likelihood that you have been advised by someone who doesn't know their arse from their elbow.

      Just my opinion.

      Good luck!

      Comment


      • #4
        Re: Is an IVA a good idea if you are in a fair amount of debt?

        Originally posted by poodle114 View Post
        Ok so I'm currently in £13, 000 of debt with Barclays I have been in debt with them for over 6 years and I have finally started a debt management plan. They have now offered me an IVA and have said it will get my debt down to £7, 000. I just want to know what the best option is.....do I save up and approach barclays directly with some money say £8, 000 or should I go with the IVA???? Which one will get me in a better financial position ??

        Thanks Amy:tinysmile_hmm_t2:
        One thing to bear in mind is that an IVA is a form of insolvency, not dissimilar to bankruptcy, and not just an easy way to manage your debts and/or settle for a reduced amount. Both things can be achieved in other ways, such as a repayment plan (if it's your only debt) or a DMP (if you have other creditors) and/or a full and final settlement, usually once the account has been sold to a debt purchaser. There is a third possibility, which is to establish whether the account is enforceable or not. This would only apply if you took out the loan or card before April 2007, in which case you'd start by requesting a copy of your credit agreement. From experience, I know Barclays often can't find them. :thumb:

        I find it very strange that Barclays themselves should be offering an IVA, :noidea: those have to be managed by an insolvency practitioner. It would be helpful if you could give us some more details about this debt, such as what it was for (credit card, personal loan, overdraft, etc.) and the approximate time you opened the account.

        Apologies for not replying earlier, I was away when you posted.

        Comment


        • #5
          Re: Is an IVA a good idea if you are in a fair amount of debt?

          Whether or not it is a good idea is not something we could comment on without a lot more information. Any form of formal insolvency is best avoided if possible, equally, it can be an almighty relief and release for someone if done in the right circumstances.

          Who was your DMP set up with? I suspect the offer of the IVA came from the DMP provider, not Barclays, and I think I could guess which DMP provider.

          Could you also say what your disposable income each month was showing as when you completed your income and expenditure form please, in addition to the questions raised by FP above?

          Sorry for all the questions, but it helps us to help you. :beagle:

          Comment


          • #6
            Re: Is an IVA a good idea if you are in a fair amount of debt?

            Originally posted by labman View Post
            Whether or not it is a good idea is not something we could comment on without a lot more information. Any form of formal insolvency is best avoided if possible, equally, it can be an almighty relief and release for someone if done in the right circumstances.
            An IVA usually lasts for five years, during which you are obliged to keep up the agreed repayments. The level of repayments expected on an IVA tends to be rather high, at least £200 a month or thereabouts. If an IVA fails, they will often move to make you bankrupt, which would defeat the purpose of entering into an IVA in the first place. For people with large, enforceable debts, bankruptcy could, indeed, be an almighty relief, however, an IVA won't be an instant relief, not when you have to pay into it for five years.

            A DMP - which is an informal arrangement as opposed to an official form of insolvency - followed by a full and final for the balance if/when possible, could well achieve the same result. Having said that, if this is a pre-2007 debt, I'd definitely be looking at sending a CCA request before doing anything else. :thumb:

            Comment

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