Please Help - Bankruptcy, IVA or DMP?

oksanauk

Hi Guys,

I am well new to this forum, but having read through it I find it very useful and helpful to people like me.

I really don't know what to do in my case, maybe someone can help me here: I've come to the end of the road now with my debts totalling to £62,000. It all started about 6 years ago when my husband died, I found it difficult to afford credit card payments and therefore started to transfer from one card to another making monthly payments that way. It all mounted up over these years and my debt grew to what it is now. I chose to ignore the problem at the time, but now I have to face it as I have reached the top of my credit limits on almost all of the cards and it is impossible to do transfers now. I now live with a partner and we go halves for rent, food, bills etc. Though we do not share whatever is left after that. My partner knows about my situation, but he is not in a position to help me here as his earnings are even less than mine. He does however help me out now and again when I struggle, bless him:-)

I have spoken to CCCS a couple of days ago and strongly suggest bankruptcy. I am very hesitant about it though, - 1) because of the likelyhood of my landlord being informed about it (which might jerpadise my tenancy status) and 2)it's the 6 year "thing" hanging over you, although yu would still have to make some payments for 3 years. Also, my biggest problem here is my bank Halifax, - I have 2 credit cards with them and an overdraft. I tried getting another bank account, but the only offers I had were basic accounts, which is a real problem for me as I pay my rent by cheque to the landlords solicitor and therefore always get a letter of receipt (which I need for any future circumstances). The cheque has to come from me, as the agreement is in my name only and not transferable.So, that leaves me in a real predicament with Halifax...Any advise here?

I guess IVA is not the best option either, as it will be 5 years payments and the stigma is almost the same as in bankruptcy case.

I so much want to get rid of this debt asap...I suppose 2-3 years would be great.. So, I thought...maybe I can get a loan from a friend for say 5K to start with and try and offer Full & Final settlement to one or two creditors to start with? Then, a year later move onto the others? Any advise on this guys? Do I have to go into Debt Management Plan first and pay what I can afford to all to start with or can I suggest the lump sum to one or two without DMP? This is only a thought..., so if anyone done this, advise will be appreciated..

Right now, I am paying monthly payments to a couple of cards, the rest I have informed that I am struggling and seeking advise. They've accepted a small payment from me, but still sending me default notices. I have not written any letters yet either.

Another advise I am seeking: in this circumstance, has anyone tried to claim late payment charges back from the cards? Or have I not got a leg to stand on here?...

I am very very confused..., please help!?

Oksana

RAS

Hi

We really do not know enough about your income and expenditure to help you in detail.

So people here have even higher debt and are paying it off, others have less and are going bankrupt. Both are valid options.

if you do not have property to protect, then an IVA is unlikely to be a sensible option as the cost of seting it up is so high.

piglet39

Hiya Oksana

I am sorry to hear about the difficulties you are facing at the moment. Am bumping this up. I think that the first thing you should do is post your SOA but I need to find the link. Hang on a mo and will get it.

Piglet

piglet39

This is the link. When you have filled it in make sure that you click button for formatting to MSE.

http://www.makesenseofcards.com/soacalc.html

You will get through this!

Piglet

worrygirl

Hello oksanauk

Firstly well done for posting on here you seem to have made the first important step of sorting this out so well done :j

Just wanted to say i was in about 50k of debt and I decided to do a DMP. I reclaimed bank charges on 4 credit cards and also PPI on a wacking great big loan from Nat west and i have already paid about 5k off with doing this alone. :j I was wondering weather to do IVA or DMP i dont own a house and work full time but i decided to go with the DMP. Its really personal choice also depending on how much you have left over paying important bills (for living) to pay off. I have set up an ISA and any spare cash i put in here to build up a good amount over the next few years to give final settlements to all my creditors. - this is the plan anyway! Just one other thing you say you have a default - this will be on your credit file for 6 years anyway so unfortunatly what ever way you go you might have this problem. If you do a DMP it is more than likly your creditors will default. as an example i have been doing DMP for 1 year and 3 of my 8 creditors:o defaulted straight away so i thought ok i got 6 years with on my file BUT now one just defaulted yesterday so the 6 years will star from now with that one. :mad: this makes me think maybe IVA is better as all creditors will default as soon as you do IVA and you know it will be 5 years paying of and 6 years with a problem credit file form the moment you start it with no risk of defaults through out.

Sorry if i have mumbled - hope i have confused you more just wanted to let you know what DMP is like before you make your decition. Have a chat to payplan as well see what they say - get as much information as you can beofre you maake a decition.

good luck - you have started the journy - it will get better!:D

oksanauk

Thank you, guys:-) My head is spinning round from thoughts of what to do...One minute I think maybe DMP, another minute - bankruptcy...Scared so much of bankruptcy!...especially if the landlord is informed and it effects my tenancy status...

Oksana

Aytoun27

Hi Oksana,

I don't feel qualified myself to advise you about a BK, IVA or DMP, but I had a couple of thoughts when I read your post.

Re your rent - would your landlord's solictor accept a direct debit payment? You could do that from a basic account like the co-op cashminder and you would still be entitled to a receipt.

My advice, which may be wrong as I don't claim to be an expert, is to be careful about paying a couple of your credit cards as normal, if you've told the others that you can't pay. If you do decide to go BK this may be seen by the OR as 'favouring one creditor over another', which doesn't always go down to well.

Anyway, I wish you luck whatever you decide and I'm sure that people who know more than me will be able to advise you further.

CLAPTON

You need to post up a SOA before any advice can be given.... but whatever you do, do NOT borrow from friends as it causes awful complications in BR, IVA and DMPs (as well as loses friendships)

Deep_In_Debt

As RAS says, an IVA is only really suitable if you have assets to protect such as property as you are expected to release equity in year 4 to pay to your creditors. You are also stripped back to the bare minimum living costs. A lot can happen in 5 years, such as a job loss which may result in the failure of the IVA if you default on your payment. A DMP is more flexible and allows a reasonable standard of living. I've been on a DMP since the beginning of the year. Originally it would take 9 years for me on my DMP but I've already managed to reduce it to 5 years.

Do seek advice from the debt charities before going ahead with anything. CCCS, National Debtline or CAB. They will advise in your interests only.

Good luck.

worrygirl

Deep_In_Debt wrote: »

As RAS says, an IVA is only really suitable if you have assets to protect such as property as you are expected to release equity in year 4 to pay to your creditors. You are also stripped back to the bare minimum living costs. A lot can happen in 5 years, such as a job loss which may result in the failure of the IVA if you default on your payment. A DMP is more flexible and allows a reasonable standard of living. I've been on a DMP since the beginning of the year. Originally it would take 9 years for me on my DMP but I've already managed to reduce it to 5 years.

Do seek advice from the debt charities before going ahead with anything. CCCS, National Debtline or CAB. They will advise in your interests only.

Good luck.

I agree with 'deep in debt' - DMP is nice because it is flexible - I am moving out to rent (privetly) and with the DMP I can ask to pay a little less to be able to afford to live. (i am still with my parents at the momnet as my debt has stoped me for moving out:o But now i can breath again living on only what i have using no credit cards its a great feeling! And you will feel it soon! Just speak to some more charity helplines

oksanauk

So, with DMP can one pay a little more sometimes as opposed to the set amount agreed? Say if I saved up on some things and would rather pay that towards my debts, - can I do that?

And can anyone advise on when is it that I can make an offer of f&f settlement - does it have to be after a few months of DMP?

OK, Guys, here are my calculations (might not be all that accurate in places though)...Had to enter the money that I send to Mum to support her under children thing. I have also not entered ny smoking habbits here.... Please let me know your opinions about this summary and what's the best get-out for me....?


Monthly Income Details
Monthly income after tax................ 1570
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1570

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 215
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 130
Gas..................................... 0
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 50
Mobile phone............................ 30
TV Licence.............................. 4
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 50
Petrol/diesel........................... 150
Road tax................................ 15
Car Insurance........................... 30
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 65
Medical (prescriptions, dentist etc).... 50
Pet insurance/vet bills................. 10
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 15
Entertainment........................... 30
Holiday................................. 100
Emergency fund.......................... 25
Total monthly expenses.................. 1309

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
Amazon.........................3647......0.........0
Amex...........................2500......0.........0
Capital One....................4660......0.........0
Nationwide.....................1000......0.........0
Post Office cr card............2550......0.........0
Morgan Stanley.................2800......0.........0
Mint...........................8500......0.........0
Lloyds 2.......................5850......0.........0
Lloyds 1.......................4100......0.........0
Halifax Overdraft..............2500......0.........0
Halifax........................8600......0.........0
Egg............................9000......0.........0
Coop...........................6500......0.........0
Total unsecured debts..........62207.....0.........-

Monthly Budget Summary
Total monthly income.................... 1,570
Expenses (including secured debts)....... 1,309
Available for debt repayments........... 261
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 261

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -62,207
Net Assets.............................. -62,207