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IVA to be re-considered to start

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Hi


My husband and I recently were told that due to our debt on our credit cards etc. they would put us on hold for 12 months. Initially I was gutted as we have spent 4 years trying to conceive and a year off for getting married and coming to terms with not being able to have our own. But I can understand why they did.


I had sent our SW an email before Christmas asking if she would visit us in the new year to explain what would be the best financial position we could be in. I have not had a reply yet but being the Christmas period and all I will let her off. I recently called up about getting and IVA to clear our debts. Yes, this would mean for the next 5 years or so we would be paying towards it. However they said that this would not affect the adoption. It would mean we would have a lot more spare a month and be able to save.


I would like to know if anyone has had experience with IVA's and adoption. I don't really want to go through with the IVA if it means I would have to wait even longer but I am hoping it would work in our favour because we would be financially better off.


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As a debt adviser I would tend to advise you get independent debt advice rather than taking an IVA from a commercial company as some IVAs are less good at paying off debts and more good at making money for those doing the arranging. I had a client with the Scottish equivalent to an IVA who after 5 years had paid off almost nothing as most of the monthly payment was going in fees to the arranger.


CAB, Stepchange and Christians against Poverty all offer impartial free debt advice.


I would offer to help but I'm in Scotland the legalities are different here...


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Hi Bop

Thanks, my parents are going to ask their financial advisor about our situation in the new year for us but I wanted to see if there was a way of getting advice before we made a decision. Do some research etc.


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Take a look at the websites of the organisations above and the Money Advice Service https://www.moneyadviceservice.org.uk/en


A financial advisor is the wrong person to talk about debt options - you need a specialist debt adviser.


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I can’t advise on debt but it might also be worth thinking about long term finances - if, for example, one of you isn’t able to return to work post placement. It happens. Could you manage longer term on a reduced income? Maybe that’s part of your sws concerns?


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I have been in touch with a debt advisor and we are going into a debt management plan. I had asked about the IVA with the SW and she said regardless of IVA or not they are still putting the 12 month hold on us starting the process. It turns out the IVA was not a suitable option as we can pay off our debts in under 6 years. We can pay off our debts just over 3 years by going down this route. So be the time we go to Panel I guess we would be almost half way if we started at the process at the end of this year. The Debt Management company has said we can pay more now and then they can re-work the budget to allow for a child for the social worker can see we have more disposable income.


Not sure I should update her now with what we have discussed with the debt management plan going into place or once we return later this year?


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Hi, as per other people’s comments debt management companies will charge a management fee per month for the debt, they also cannot guarantee that your creditors will accept the reduced payments and if interest will be frozen. Debt can be sold off during the plan as well to other financial companies and they again may have different expectations of you. You would be better placed to use someone who will not charge the management fee as this will allow you to pay the debt sooner.


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Can I check - is this debt adviser an independent adviser from one of the organisations I mentioned before? Usually to go through your situation and work out the best option would take longer that you have had to sort this out.


There are lots of companies who will claim to be debt advisers and say they are able to sort your debts, but in fact charge high fees and the time taken to pay stuff off is long. You don't need that sort of debt adviser. If you are up to date with your payments, all you need to do is overpay each month and cut the cards up so you can't put anything extra on to them - a debt management plan is usually only a good idea if you can't make minimum payments, and even then I would advise caution.


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They might charge but it is reasonable and it is within the monthly amount we pay. The company is also regulated by the financial conduct authority. So if we went with someone who wasn't and they went bust we would be back to square one.


We both have a bank loan each and 2 credit cards each. We are drowning in it and it's hard to make above minimum amount on all of them and still stay afloat. There is a risk of them defaulting and staying on our credit file but by the time we pay off the plan it would be clear of it. One payment is easier to manage than 6 individual ones. Once the company sorts it all out for us and we can pay extra if we can afford it. I think we can manage to pay more as what we are starting off with is well within our budget, it actually will make things easier.


It is an independant company which I did my research on. We haven't signed anything yet. They will also provide statements every so often go indicate where all the money we have paid has gone. Also get reviews every 6 months.


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