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in a conundrum

Briefly, i am £61k in debt with loans and cards and have been paying my creditors £1 token payments for @ 5mths which Spectrum debt agency set up for me in August last year. I have since binned Spectrum off over xmas and have chosen to go it alone with advice and possible help from Payplan.

I spoke with payplan earlier this evening and the lady i spoke with was very helpful and gave me a number of options i could take.

She went through my expenditures very thoroughly and estimated i have between £300 - £350 available at the end of the month. she asked if i had this much available why was i only paying £1 token payments. So i explained that back in August this wasn't the case, at that point i only had £200 available (since had pay increase at work) so Spectrum said at that time i didn't have enough to set up an IVA as i would need @ £340, so what they did was fiddle my expenditure to show my outgoings greater than my incomings.

She wasn't to impressed by what they had done, but did agree there is room to exagerate your expenditure sheet so as not to leave you eatiing jam butties for the next few years.

Anyway, she said my ideal otion would be to go for an IVA, but once i explained i had a divorce settlement ongoing from which if all goes well i could receive up to £30k, she said in this circumstance it would probably be better not to go for an IVA just yet. Any money i get from the settlement could be used to try and negotiate reduced and final settlements with some of my creditors spread across the total debts, thus reducung what i have left owing, and then set up an IVA for the remainder.

Another option would be bankrupcy as i have no assets and live in rented house, but again not advisable at this time because of the ongoing divorce settlement.

So we settled upon a pro rata repayment plan until the divorce settlement was finalised. Now i could do this on my own (i dont mind, as i had previously done one of these 12mths ago when my ex and i first broke up, so do know how to do this), or, Payplan could set one up for me, in the meantime she is going to produce an accurate expenditure sheet and sen it out to me to browse over before deciding what to do.

My conumdrum is: prior to speaking with payplan i was going to continue sending just token payments for another 5 - 6 mths to give me time to get some saving built up from the £300 i have spare and then look at setting a formal plan up with my creditors, but the lady from Payplan advised against this and said i should be setting up a plan ASAP, because if my creditors got wind i had not been declaring i had so much free each month to make larger repayments they would not look favourably whenit came to me trying to set up a pro rata plan.

So what should i do:

Continue with token payments in the hope i can get away with it for another 5 - 6 months ?(also giving time for my divorce settlement to hopefully get settled, been ongoing now for 12mths)

Or

Go it alone without Payplans help and set up a pro rata repayment plan in say 2 mths time?

Or

Accept Payplans help and let them set up a pro rata plan ASAP?


Any thoughts anybody?

Comments

  • Xbigman
    Xbigman Posts: 3,916 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Have they all frozen interest/charges or are they still being racked up?

    You need to decide what to do long term. If you plan to pay these debts off then you need to start making significant payments now. To wait will only increase the problem.
    If you plan to go bankrupt at a later date then you should start paying more now because it will look better to the official reciever. You would also have any savings siezed, so there is no point doing this once you have more than about £600 tucked away.

    Overall I think you are in an excellent position to clear the lot. With 30k you should be able to wipe out about 45k of debt with F&F settlements. With £300 spare and only 15k now owing you can at least see the light at the end of the tunnel. Without that 30k I would suggest bankruptsy.

    Paying token payments when you can pay more is pointless as far as debt clearance is concerned. Pay more.
    Regards



    X
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