www.iva.co.uk

Hi,

I'm 12 months into my IVA, I owe approx. £29K at the start and payments are at £190PM.

With the cost of living rising, I'm struggling, and now that I qualify for a DRO, I might just do this.

If I fail my IVA, I believe I can take out a DRO and not have to make any further payments to the debt and it's written off in a year.

A no brainer really?

What's everyone else's thoughts?

Kind regards,

Alex.

The only issue I can foresee is the window of opportunity creditors could have to chase you for the debt when the IVA fails. You are not out of the IVA until the termination notice is issued, which could take a few months. As soon as you are out the creditors are able to apply lost interest and charges -- which might put your debt over the DRO limit and open to collection procedures.
Additionally, if your IP has used the guideline figures to arrive at your disposable income, even if you are finding it difficult to manage, the DRO intermediary might well come to a similar figure. In which case you would also not qualify for the DRO.
So, on the face of it a DRO looks inviting, but you might find yourself out of the IVA and unable to get a DRO.
Tread carefully and have a chat with a debt advisor at Citizen's Advice to check the lay of the land.

Totally agree with foggy .. you could be walking into a fire if you leave your iva behind. Make sure you take specific advice from a professional team.

First thought is that you need to talk to a DRO adviser. to check eligibility. There is a limit on "spare income" in a DRO of £75 a month. If you can afford anything like 190 a month to your DRO, you may be over the 75 limit.

Next thought is can you really afford the £190 though? if your petrol, energy and food prices have gone up a lot, then you may need to get the £190 reduced. Talk to your IVA firm now if you are finding it hard - this doesnt have to wait for your annual review.