HELP NEEDED IVA, OR Bankruptcy

jdmcx

hiya, where do i start 5 months ago i entered into an iva due to my money problems i was in a job with a take home of £330 pw, 3 months ago i changed jobs to save my wife and children staying with me but my new job has a take home of £761 a month...
working tax and child benefit went up but my change in circumstances meant the monthly income dropped by £196...
problem being is rents gone up, tax has gone up.. i've even had to get rid of my pets to another loving home as we can't afford to keep them also my back has started giving me jip' so i'm having to use a back'cracker weekly so that i can keep working...

plus we've just had a bouncing baby boy, i fear the world i give him...

all in all my problem now is that my income is £1865 a month
my outgoing is £1964 a month

all of my outgoings are what cccs tell me i should account for everything ie food, travel and clothing... my outgoings do not include the IVA payments, i have been toying with the idea of bankruptcy, but i dunno what will happen i have no assets except a year old tv and two year old laptop, my cupboards are empty and i can't afford to feed myself sometimes, i feel like a faliure to my children and wife i need advice as the IVA company are due to phone me about payments

[THREADBANNER]BOX[/THREADBANNER]

lexie2005

Hi there, sorry to hear you are having problems. Have you spoken to your IVA company to see if they will do a variation of your payments? I am sure they would rather try & help you than your IVA fail. As so many people say on here bankruptcy is a very serious decision so I would recommend taking advice first of all. Do you have a property which you would stand to lose if you choose BR? I hope it all works out for you.... You are not a failure! You faced up to your problems by taking the IVA which I know from personal experience is a really big step to take.

jdmcx

in a way i'm afraid to ask them about a variation and don't actually understand what a variation is or how it works as my monthly surplus is -£69 so the way i look at is i can't afford to pay them anything unless i cut back on food, travel or living costs but with a family of 6 if i start cutting back i'd be going below cccs guidelines and what citizen advice companys say is law to live on, i don't want it to fail but am scared to contact them because they may say cut back on everthing more than i'm able just to keep me in the iva

CCCS_Matthew

Hi there.

Do you have an IVA with CCCS or is it another organisation? Either way you have to speak to them in order to get a review. A variation is simply where you try to get the creditors to accept an ammended amount on the IVA, sometimes this means extending the term slightly. If you've worked out your change of circumstances now gives you a deficit, it suggests an IVA is no longer a viable option so you need to see what your options are.

You can't try and make payments to your IVA at the expense of not covering your priority living costs as it's simply not sustainable.

Regards,
Matthew.

lexie2005

Right then I will try & advise you best I can. I recently contacted my IVA company as our childcare & other bills had increased but our incomings hadn't!!! I contacted them & asked what they could do to help me as we really were not going to manage, we had a £100 a month defecit. They asked us to complete a new SOA & send last years P60 & most recent wageslips. They were then putting it all together for it to be put to our creditors. I will be honest & say it was all taking a while so in the mean time I did have to cut back on things & it was a little tough. I called our provider after about 8 weeks to see how things were progressing & after chatting we have actually just dropped our payments for 5 months until our childcare costs reduce due to the government funding... I am sure this will work out please do not panic. I would just recommend you give them a call for a chat. Shout if you need any more advice & I will try my best to help....

jdmcx

done through blair,
just phoned them, they want to break cccs guidelines and lower things but how much do i let them lower as this'll be less and i'm struggling due to the job change and kids being kids... cccs_matthew

also thank you lexie2005 very helpfull...

DOES ANYONE KNOW WHAT A COMPANY'S MINUMUM IVA PAYMENT FOR MY INCOME? I MEAN THAT WAY I MIGHT BE ABLE TO AGREE TO THE MINUMUM CUTS TO KEEP THE IVA GOING

CLAPTON

Without seeing your SOA its impossible to give any decent advice;
however, you seem to be saying your are spending more than your income even before an IVA payment and you have no assets (i.e. no house).
Usually in this case its best to go bankrupt but without the detailed SOA its impossible to say.

jdmcx

what's soa? as i can break up information and post it on here without name address

CLAPTON

an SOA (statement of affairs) is basiclly income/spending/debt details /assets and general circumstances

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

moneysavingplumber

For what it's worth I recently completed an IVA and if I were in the position that you are in at 5 months in I would seriously look at all the options, including bankruptcy. It would not be worth negotiating a temporarily reduced payment if your income is unlikely to increase or your outgoings unlikely to decrease, as it may fail anyway and that money will simply go into the IP's pocket and not to your creditors.

Once you post up your SOA the old hands here will at least be able to help you cut living costs to see if enough money can be freed up to sustain the IVA, but I have to say in my opinion it looks unlikely.

Afilsdesigner

I ran a small but successful business that was started in 1994. To cut a long story short, a couple of large invoices for work we had done were not paid and we got a surprise VAT audit, all of which caused our cashflow to dry up. Dealing with the fallout of this meant I did not have the time to chase new work and became virtually non-functional mentally. At the time of being declared bankrupt (2001), my debts were a pathetic £10K (£5K actual debt and £5K accrued interest and charges) but none of the banks wanted to know. All the debt was spread across 4 credit cards.

Signing up for the IVA did at least stop the credit card companies from piling on interest charges and sending waves of bailiffs to hammer on the door.

Another benefit of the IVA was to allow parts of the business to continue running.

In desperation, I was fortunate to find a full time job and slowly, managed to climb out of the mess. In total, I paid around £20K to the company managing my IVA for an assortment of meetings, letters and anything else they could add on. No-one ever told me to expect this. I did complain to the IVA regulator but with no result.

This was a long, painful and mentally gruelling exercise which demonstrated to me how greedy the banks were and how IVA companies were in it purely to make money as well. In short, no-one (exept relatives) helped at all and I was lucky to keep hold of the house. Out of the blue one day BT rang up to say they were going to disconnect me. Not for late or non-payment of bills either, but purely because I was declared bankrupt. The gas board did the same. One day 5 men turned up to disconnect us even though all bills were paid.

Advice based on my experience would be:
1) Before entering into an IVA, make sure you have a working credit card. Ideally with a £0 balance. Use for absolute emergencies only. Once registered, getting credit is impossible. I couldn't even borrow a car.
2) As above, have a clean bank account.
3) Never ever answer the door to bailiffs. Once admitted, they have the right to break in and will strip you of everything worth having and sell it for nothing.
4) Never buy anything on credit and never signup to direct debits. It may seem easy and convenient but my experience is that these companies are determined to make money at any cost and care nothing for you or your circumstances. If you can't pay off your credit card each month, you are headed for disaster.
5) Open all letters even the ones you don't want to.
6) Before being declared bankrupt, transfer essential services, if possible, to a relative or partner so they don't get cut off.

The whole experience was awful and I wouldn't recommend it.

Now the good bit: My business is still up and running and doing well despite the credit crunch. I owe nothing (yes nothing) other than a £4K mortgage which I am paying off as a top priority. My total approach to life has changed with an emphasis on saving rather than spending. My life mission is paying as little interest and tax, tax, tax as possible! Keep positive and you can get out of it. Next May (2009) my credit history becomes totally clean again and by the end of the year the mortgage should be paid off. Excellent.

Good luck everyone.