Help Please??

creditpunch

All

I am on my last days leading to my BR and now I am having second thoughts.

Very concise history:
I am a single mother of a 3 year old his father bailed and left the country before I gave birth which was probably a good thing, due to the abusiveness of our relationship. My son and I became homeless and were put in a hostel, then temporary accommodation, then given a permanent place. Because I work I have never claimed benefits and have always paid rent, council tax etc (even at the hostel).

My debts now stand at circa £60k of which circa £30k is owed to friends and family. This rose dramatically mainly since the birth of my son 4 years ago from childcare costs, putting myself back into education to better my job prospects and paying rent and minimally furnishing my flat which came completely unfurnished. I also had manageable debt from studying and credit cards from my early 20’s.

I have been able to manage my debt up until Sept 2008 on a salary of circa £27k I was paying out circa £1500 a month to servicing the debt alone and borrowing to live. I managed this fine while I worked on perfecting my credit score with a view to consolidate into one payment. In Sept my score was perfect this is when I tried to consolidate but due to the current climate I was unsuccessful and that is when I was no longer able to manage my living expenses and debt (which wasn’t really reducing because of the vicious circle I was now).

So that’s really when my spirit broke and I faced up to the prospects of BR, then In November I landed a brilliant job and my salary has literally doubled to £50 I started in Dec. It’s a good job and seems as if it will withstand the current crisis so I can confidently say it is secure (please Lord) so everything should be perfect right? Wrong. I have such a back up it will be impossible to sort out all at once. I owe about 4 months in loan and credit card payments let alone thinking to payback my family. As I haven’t been in the job long and have only been paid once (Dec, Jan comes in tomorrow. yay) I don’t know where to start. In my previous depression I planned to BR my debt and pay my family back at some pint in the future, but now I am seeing a glimmer of more options I may have. Although all the letters and phone calls and NOW home visits are really freaking me out.

I would like someone to assess the above and see if I’m still a BR case (remember my debt to organisations is £30k). if I where to go down the IVA route how much bargaining power do I have? I hear the SOA is much much tighter than a BR? I don’t mind paying it all back on an IVA but would want/need initial payments to be lower say £250 a month for 12 months going to £500 a month for a further 12 months then £700 for the remainder of the 5 years or lump sum sooner to end it in Full and final payments. What are the pitfalls of an IVA.

· I would pay an IP circa £12k over the five yrs
· It will stay on my credit files for 6yrs from the END of my IVA
· Any extra money including pay rises are TOTALLY absorbed into the IVA
· What about cost of living increases (maybe not an issue now but it may become so again)
· I am lactose and wheat intolerant will this be allowed to be considered when food bills are considered.

Thank you for reading I have put this on the BR and IVA board so I can get both prospectives.

bubblesqueak

I'm sorry this isn't a comprehensive response but the IVA stays on your file 6yrs from the beginning. Not the end.
As for fees - they will be paid whether BR or IVA. (BR fees are much higher)My understanding is that really the only reason people should choose an IVA is to protect a mortgage'd home. If you've not got a mortgage, you'll have no equity to put into the IVA. A BR will be over much quicker. Also, you wouldn't be able to structure the payments in an IVA (nor a BR either from what I gather.) the way you want to. They will do an income/expenditure analysis and whatever's left over will got to the IVA payment. Who is your debt advisor? Have you discussed your options with them? Sorry i can't be more help.

james32_uk

Basically if you dont need to protect any large asset or a career that may be affected by bankruptcy then bankrupcy is the best choice.