Second Thoughts - please help??

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.

dalip

Last minute nerves,remember them well;) .

IVA's are only usually any good if you have a house to protect.

I still think bc would be your best option,but the decision is yours and yours alone girl.We are behind you 100% whatever you decide.Dx

blind-as-a-bat_2

If you have no assets, or anything else to protect an IVA is not much better than BR.

They are both recorded on the IS website etc, and too early to tell how they will be viewed in the future by creditors. you may find the record of an IVA may, or may not, have the same effect as BR anyway.

If you have the surplus you would be better reaching a repayment plan with your creditors yourself before going onto an IVA, but obviously there is not enough info to know if thats feasable, even if you got the crediors to come to an agreemant, but it would,in theory save you 12K in IP fees, which to be honest, once the IVA is set up they do bu GGer all to earn.

just a few thoughts

creditpunch

I' know I know why do I do this I am decisive and have filled out the forms and ready even acting all knowledgeable then it all falls apart and I'm back to square one. AAAAAAaaaaahhh this needs to be over.

Thanks guys BR it is. I'm just scared that the judge will laugh me out of court or something as there are much worst situations to be in.

skylight

We have all been there. Even half way through I woke up one morning in a panic - which is VERY unlike me - wondering if I had done the right thing and if there was a way to reverse it! It didn;t last long.

It is a big step. Its why we have the nerves. I mean, getting married is a big thing but there is a get out clause if you need one. Once you are BR, thats it (unless you suddenly come into enough money to pay your debts etc). But because its such a big thing, you need to be sure that what you want to do. Looking at your circumstances I personally would take that step and declare BR. An IVA is not going to make things better. BR means its over. An IVA will mean a struggle for 5 years to ensure it doesn't fail and thus the money was wasted.

creditpunch

Thxs Skylight. I think I need an internet phone so I can keep chatting right up to the last minute as I will need a to be kicked through the door.