www.iva.co.uk

Hi, I currently have a payment plan through Baines & Ernst where were are paying £180 per month - at this rate it will take approx 15 years to clear the debt. They are keen for us to do an IVA where I have been told by them that I can keep the repayments at £180 per month but for after 5 years the debt will be cleared. Also they have told me that the IVA will only affect my credit score for a year after the IVA has expired. I am just after a second opinion to what I am being told is true please.

If you give deatails of the extent of your debt an expert will be able to advise better. But £180 seems quite low in terms of an IVA payment, i thought it had to be more than that.

The IVA will stay on your file for 6 years from the day of your meeting, so yes it will be clear 1 year after the IVA has finished, but your credit rating will have to be rebuilt again.

Hi,

The payments are not fixed for the whole term. They may go up or down depending on your income and expenditure from year to year. Also yes the IVA stays on your file for 5 years and then all old defaults etc will drop off after year 6

Hiya Mike and welcome. I'm no expert but I will give my opinion. An IVA needs to be accepted by the majority of your creditors so, although your ip will put forward the best offer, there are no guarantees that it will be accepted. There is also no guarantee that your payments will remain at £180. You credit rating will stay on file for 6 years from the IVA starting and you will have to build it up from scratch again.
What I would say is this, you are not tied to use this company for an IVA, you can use anyone. Check out a few BEFORE you commit to any company, they can differ greatly in the service they provide.

£180 seems a very low contribution for an IVA, but if your IP believes that this is a cost effective way of you addressing your debts, and is prepared to propose this to creditors at no additional cost to yourself, then you have nothing to lose in trying. Your credit rating is cleared six years from the date of your creditors meeting - so if you are proposing a five year IVA your advice has been correct.

An IVA to clear the debts in 5 years certainly looks attractive compared to 15 yrs on a DMP, but there is much more to it than that. Are you homeowners? Equity? Joint debts? etc. What is the payment you can afford? Who are your creditors?

£180 in itself doesn't rule an IVA out, but if there are any imponderables that you haven't mentioned then they would need to be considered.

You may wish to visit www.iva.com and have a look round, an IVA is a big decision so I would encourage you to speak to 2 or 3 different providers and then make a decision from there.

Regards.

Further, as Mel says, you need to investigate whether there are extra costs involved.

I am aware of certain companies that charge a "transfer fee" to switch from DMP to IVA, so you need to ascertain whether B&E will do that.

Regards.

please beware dfd started me of with £115 tha it went up to £200 and in the end they wanted £450 guess what it failed

What is the "transfer fee" paid for Mike? Suggests to me that there are three levels of fees now being charged instead of one nominee's fee - but perhaps I am being cynical! New way to defeat the cut on nominee's fees?

Without going too deep Mel, there are some firms that will review DMP files after, say, 6 months with a view to looking at possible IVA proposals. Perfectly legitimate and above board of course as there may be a number of reasons why an IVA was not viable at point of initial contact, but may be viable later on.

If it is a DMP company solely, the fee may consist of 2 further payments on the DMP being held, which is still running, as a fee whilst an external IP looks at the IVA proposal. If the IVA is approved those 2 payments can be viewed as the "transfer fee", over and above any payment they receive from the IP as an introducer. Some companies, of course, will not charge that and view their fee from the IP as sufficient.

If it is a company that provides both DMP and IVA, some firms will charge a flat fee, possibly £100 to £200 to switch solutions internally, ostensibly to cover extra admin.

Each company must have its own business model of course, and all of this is fine if the client is happy to pay these fees.

Regards.

Thanks guys for the replies, alot of this information has been very useful, thank you. Just to shed more light on my situation, I am married with three kids, 19, 17 and 10. We sold our house and now rent privately. Our DMP is through Baines & Ernst who will charge £100 to transfer our case to their IVA arm although they have decreased this fee to £50.

I am a little cynical following the approach made by Baines & Ernst as they are really putting the hard sale on me for doing the IVA.

Mikey

Be very careful Mikey. I am with Blair Endersby who are the "arm" that you will be going to as they are in fact part of Baines and Ernst and I have had a lot of trouble with them so well worth doing your homework on who you will go with for your IVA. May I suggest going on to www.iva.com where you can do reviews of the various providers

Hi Ray, thanks for that, I have been very unimpressed with the hard sale from Blair Endersby/ Baines & Ernst and reading this site I will be contacting some other IP before making a final decision.

Melanie, I would like to discuss our situation with you with the thought of proceeding with an IVA, when would it be possible to talk to you and what bits and pieces shall I have in front of me when I call. Also would be able to chat in the evenings as difficult to talk at work. Mikey

It is strange that you, and ultimately your creditors would have to pay for a file to be internally transferred. But if this does involve extra work on the part of either the DMP company or the IP I suppose it is fair that they be remunerated for this.