Posted: Mon Jan 26, 2009 3:11 pm
Hi
I was wondering if anyone might be able to offer some advise regarding paying off an IVA early.
I am currently 1 year into a 5 year IVA will One Advise/ ALLCLEAR Finance, which currently requires me to pay £265 per month (or a total of £15,900 approx). Of this figure approximately £4k goes towards supervisor fee's etc. The original total debt was approximately £17k, which was due to a combination of redundancy, poor financial decisions and living above my means.
Essentially the question that I want to ask is it worth paying off an IVA early through the use of other finance?
Obviously I would be unable to get this additional finance, however my father has expressed to me that he would be willing to take out a loan upon my behalf in order to pay off the IVA in one full and final payment. From speaking to my IP it would seem that a figure of a around 11k would be acceptable as a rough ball park figure.
As far as I can tell from this possible scenario it's benefits would be that I would be ending my IVA early so therefore would have a better chance of repairing my credit history in the time it would take to pay off the IVA. I am aware that regardless of when an IVA is paid off it remains on file for 6 years from the start date, however surely it would be better to have potentially 5 years of responsible finances rather than starting again at the 6 year mark when the 'slate is wiped clean'?
In respect of the actual 11k loan I will actually be paying this off rather than my father (i.e. i will give him the money each month which he will then use to repay) so therefore for the period of the loan I will not necessairly be significantly financially better off. However from early quotations I would pay this money off within 3 years and at a similar of even lower monthly repayment rate.
I do have a good relationship with my father and thankfully he trusts me to make the repayments. I am also fortunate that as a Police Officer I am in fixed employment so unless anything serious happens I should have no issues in making repayment.
I am also concious of the fact that my IVA stipulates that a certain amount of my overtime has to be paid if it goes over and above the agreed rate. In my line of work there is a lot of overtime to be had and as such the current IVA agreement is actually a significant hinderence compared to the loan repayment option whereby I keep a 100% of the overtime. There is also the consideration of the fact that my IVA will be viewed negativley if I go for promotion.
My biggest criticsm of my current agreement is that though I find the monthly repayment levels to be fine to achieve, should I have any unexpected financial commitments then the money I put aside each month is put into a savings account can be wiped clean! Essentially creating a cash flow issue.
At the end of the day all I want to do is be in a position where I clear my debts and have a fresh start.However I would like to be in a responsible position whereby I can obtain a low level of credit in future by way of a normal current account, small overdraft and emergency credit card. I don't want to cut credit out of my life as I think that is an unrealistic posibility. However I want to embrace it in a more sensible and controlled manner having learrned from my mistakes.
Sorry for the lengthy post but any thoughts would be appreciated.
I was wondering if anyone might be able to offer some advise regarding paying off an IVA early.
I am currently 1 year into a 5 year IVA will One Advise/ ALLCLEAR Finance, which currently requires me to pay £265 per month (or a total of £15,900 approx). Of this figure approximately £4k goes towards supervisor fee's etc. The original total debt was approximately £17k, which was due to a combination of redundancy, poor financial decisions and living above my means.
Essentially the question that I want to ask is it worth paying off an IVA early through the use of other finance?
Obviously I would be unable to get this additional finance, however my father has expressed to me that he would be willing to take out a loan upon my behalf in order to pay off the IVA in one full and final payment. From speaking to my IP it would seem that a figure of a around 11k would be acceptable as a rough ball park figure.
As far as I can tell from this possible scenario it's benefits would be that I would be ending my IVA early so therefore would have a better chance of repairing my credit history in the time it would take to pay off the IVA. I am aware that regardless of when an IVA is paid off it remains on file for 6 years from the start date, however surely it would be better to have potentially 5 years of responsible finances rather than starting again at the 6 year mark when the 'slate is wiped clean'?
In respect of the actual 11k loan I will actually be paying this off rather than my father (i.e. i will give him the money each month which he will then use to repay) so therefore for the period of the loan I will not necessairly be significantly financially better off. However from early quotations I would pay this money off within 3 years and at a similar of even lower monthly repayment rate.
I do have a good relationship with my father and thankfully he trusts me to make the repayments. I am also fortunate that as a Police Officer I am in fixed employment so unless anything serious happens I should have no issues in making repayment.
I am also concious of the fact that my IVA stipulates that a certain amount of my overtime has to be paid if it goes over and above the agreed rate. In my line of work there is a lot of overtime to be had and as such the current IVA agreement is actually a significant hinderence compared to the loan repayment option whereby I keep a 100% of the overtime. There is also the consideration of the fact that my IVA will be viewed negativley if I go for promotion.
My biggest criticsm of my current agreement is that though I find the monthly repayment levels to be fine to achieve, should I have any unexpected financial commitments then the money I put aside each month is put into a savings account can be wiped clean! Essentially creating a cash flow issue.
At the end of the day all I want to do is be in a position where I clear my debts and have a fresh start.However I would like to be in a responsible position whereby I can obtain a low level of credit in future by way of a normal current account, small overdraft and emergency credit card. I don't want to cut credit out of my life as I think that is an unrealistic posibility. However I want to embrace it in a more sensible and controlled manner having learrned from my mistakes.
Sorry for the lengthy post but any thoughts would be appreciated.