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  • FIRST POST
    • Nav2018
    • By Nav2018 11th Oct 17, 1:23 PM
    • 2Posts
    • 0Thanks
    Nav2018
    IVA Advice.
    • #1
    • 11th Oct 17, 1:23 PM
    IVA Advice. 11th Oct 17 at 1:23 PM
    Hi everyone

    Iím new to the forum.

    Iím ashamed to say that I have 45k worth of debts from credit cards and an overdraft. I have to be honest with myself that things have gone out of control. Learned a BIG lesson and Iím currently working with a tight budget ensuring and being conscious on spending.

    Iím currently in a 5 year fixed year rate mortgage which ends in 2019. Iíve had the mortgage since 2014. Never missed payment and never missed a credit card minimum payment.

    I canít believe Iím typing this right now. Iím married and have a 2 year girl and they both financially depend on me, over spending and not budgeting has been my downfall in this matter. Iím seriously feeling stressed out and want to get things back in control.

    To cut a long story short, I was depending on an online business investment, I borrowed a loan from a 2 credit cards to start the business, but unfortunately the business has failed. I was depending on the ROI to repay back all my credit cards and go into profit.

    After doing thorough research an IVA sounds like a way out for my current circumstances.

    I work a full time job but only earn around £1400 per month. Hereís my list of my monthly income and expenses sheet.

    Total Monthly Income £1,412.41

    Mortgage £525.76
    Council Tax or Rates £109.00
    Gas £54.00
    Electricity £54.00
    Water £51.00
    Mobile phones £19.00
    Internet/broadband £18.99
    Shopping £320.00
    Fuel £50.00
    Gym £10.00

    TOTAL £1,211.75
    Disposable Income £200.66


    My job is predicable, regular and permanent.

    The max I can afford to repay is £200 per month, is that ok?

    1) My only worry is will an IVA affect my chance of getting a remortgage with my current lender into another fixed term or standard variable rate?

    2) If I get another job with more money,? Am I even allowed to save any additional income? i.e. letís say I get another £200 more in my new job, can I save £100 and the other £100 for the IVA repayment, meaning it will be £300 per month repayment?

    Thank for all your help
Page 1
  • National Debtline
    • #2
    • 11th Oct 17, 1:41 PM
    • #2
    • 11th Oct 17, 1:41 PM
    Hello Nav and welcome to the forum.

    One of the main considerations here should be any "equity clause" you are required to agree to as part of any IVA. This can sometimes mean having to seek a remortgage in order to release a portion of any equity in your home before the IVA term ends.

    To answer your specific questions:

    (1) It will certainly be easier to seek a new deal with your existing lender than to go elsewhere. IVA or not, you'd still have that £45k to factor in to any application. I can't say with any certainty how your situation would affect your eligibility for any specific products offered by your lender.

    (2) Your IVA will normally entail reviews on (at least) a yearly basis where your contributions may be upped or lowered depending on any changes. Whether you have any scope to keep any share if a wage rise may depend on how the IVA agreement is worded - all the more reason to scrutinise it very carefully before committing yourself.

    Dennis
    @natdebtline

    P.S. Apologies for any typos - posting from a mobile.
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Nav2018
    • By Nav2018 11th Oct 17, 3:08 PM
    • 2 Posts
    • 0 Thanks
    Nav2018
    • #3
    • 11th Oct 17, 3:08 PM
    • #3
    • 11th Oct 17, 3:08 PM
    Thanks for your reply

    How does a Full and Final settlement work?

    What if I can afford to pay say £10-12K of the £45k.

    Will the creditors accept it?

    200 x 60 = £12,000

    The creditors will get the money upfront and don’t have to wait 5 years?

    Will my credit rating still be affected if I go via this route?
  • National Debtline
    • #4
    • 12th Oct 17, 5:19 PM
    • #4
    • 12th Oct 17, 5:19 PM
    Hi Nav2018,


    If the debts are currently up to date, the creditors may be less inclined to accept a discounted settlement, but it is possible. You would need to divide the lump sum fairly between the debts (and explain you may not be in arrears today, but will likely be tomorrow), send them a budget to show them this, and ask them to accept the settlement. They should agree, in writing, that neither they nor any third party will chase you for the shortfall and that they will mark your credit file with a £0 balance and partially satisfied.


    This mark of a partially settled debt can have a negative affect on your overall rating so may affect you getting different mortgage products, but, overall, should be less damaging than an IVA. I suppose a key issue with this option would be, where would the £10-12k come from? If you are considering more borrowing to do this, then it isn't really a suitable option.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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