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By Tom King
#216
I am actually on a debt management plan and I am considering an IVA. However my concerns are that if the IVA fails, will my creditors accept the debt management again?
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By Steve Jackson
#235
Hi Tom

Welcome. The bottom line is that you should not switch to an IVA unless you are absolutely sure that you can maintain the payments. Having said that, no-one can be 100% certain in life. If you do go into an IVA and subsequently your circumstances change and it fails, then you always have the option to go back into a Debt Management Plan. After all, you will still owe your debt. The bottom line is that you either have the choice of Debt management or Bankruptcy. Your creditors would definitly prefer DMP payments than potentially getting nothing with the bankruptcy option.
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By Hayden
#341
Hey Tom

If you can afford the payments, without knowing any more about your circumstances, I would have thought it would definitly be to your advantage to go into an IVA. After all, an IVA will clear your debt within 5 years where as if you are on a DMP, you could be paying for a lot longer. The only question I would have is are you a home owner? If so and you have equity in the house, if your were unable to afford your IVA payments, your insolvency practitioner might hold up their duty to your creditors to make you bankrupt and sell the property for their benefit. Having said that, I think this situation is quite rare.
By Tom King
#342
Thanks guys

I have been in my Debt management plan for a year and have realised that if I carry on like this, I will be paying back the debt for ever. I do not think there is any reason that I will not be able to keep up my IVA payments. I have about £10k equity in my house currently (although that seem to be falling by the day......). If I ot into an IVA and it failed, do you think that my IP would want to try and sell my house to get this?

Thanks for your help
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By Hayden
#343
Glad we can be of some help Tom. Perhaps Steve is a better authority here but I would say that if you only have £10k equity in your property, there is little or no possibilty that your IP would be able to realise any of this if your IVA failed. As such, if this were to happen, I would have thought that your IP would simply fail the IVA and report to your creditors that they were no longer able to act in your case. Your creditors would then start to chase you for the money directly again and you would have the choice about what to do. As such, if you wanted, you could go back into a debt management plan.

Given what you have said, it seems to be that the benefits for you of starting an IVA outweigh the risks of it failing down the line.
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By Steve Jackson
#397
Hi Tom

Given that you only have £10k of equity in your house (and probably less if a valuation was undertaken today) I would say that if you were in an IVA which failed, your IP would be very unlikely to want to make you bankruptcy and look to realise the equity in the house. As such, in these circumstances, you would simply return to a debt management plan. Given that you have said that you do not think there would be a problem keeping up payments in an IVA I do not think you have anything to worry about. I would definitely speak to one or two debt advisors who are independent from your DMP company to see how an IVA might work for you and the level of monthly payments you would need to pay.