Help and advice needed re debt ??

jayneben

Hiya
Ive been stickin my head in the sand for quite a while now and things are really spiralling i really need help and advice !

My hubbie was made redundant in 2005 was out of work 4 6mnths so we basically lived on credit until he found new employment which was lower paid, we basically just managed through until Nov when he was put on short time due to recession again we made minimum payments with credit ( i know so stupid) basically his wages are now some months £500 down to usual so its got to crisis situation of now not being able to afford minimum payments, im now getting multiple phone calls letters, Lloyds Tsb are reguarly helping themselves to our account and today ive just found out MBNA have taken a debit card payment from my card without my permission ( surely this is fraud) leaving me unable to make my mortgage payment ! my hubbie is unaware ov how bad our situation is and its stressing me out completly now ! Not sure if DMP/IVA would really appreciate some advice

Income:
OH now between £800-£1000
Me £1950
Child Benefit £70 but due to stop in Sept
Total: 3020 if OH earns top 1

Expenditure
Mortgage: 720
Utilities: 200
Council Tax: 115
TV Licence:12
Life Ins: 33
Home ins: 33
Water: 35
Travel: 100
Petrol: 120
Car Ins: 75
MOT/Tax: 20
Children activities: 0
Food: 400
Haircuts: 30
Glasses: 0
Virgin phone + internet 70
Mobiles: 60
Prescription:
School Lunches/trips: 30
Total: 2020

Surplus: 1000

Our outstanding debts between us are:

Natwest loan: 10000 (mine)
Membership finance loan: 9000 (mine)
lloyds Tsb loan: 7400 (hubbies)
Natwest cards: 2400 (mine)
Lloyds TSB card: 6000 (mine)
Barclaycard: 2000 (mine)
Barclaycard: 2000 (hubbies)
MBNA: 8000 (mine)
Lloys Tsb card:5500 (hubbies)
Hitachi finance:3000 (hubbies)
Littlewoods: 900 (mine)
Next: 500 (mine)
Overdrafts: 3350

I know ive been stupid to ignore it and to let it escalate but now im havin sleepless nights and keep havin to turn my phone off to avoid all the calls which can be up to 20 times a day , I would really appreciate any advice

althas

Hi Jayneben

1st off welcome to the forums and well done for recognising the problem and deciding to do something about it. I have just had my IVA accepted last week, so I know EXACTLY how you are feeling, I was there a couple of months ago when my head popped out the sand dune it had been in for 15 years

Firstly, take a DEEP breath and let it out. I know it is easier said than done, but do not let your health suffer over this. It is scary and will be tough to face it all in the cold light of day, but the people here are a friendly bunch and will offer support where they can

What you need to do is visit somewhere like CCCS, they are a charity and so can offer free and impartial help. They have an online form to complete with all your details then they offer a recommendation and how to proceed with it. It is annonymous to begin with if that makes it easier

My advice would be:
1. Now you have taken that first step, stay with it. That 1st IS the hardest
2. Be totally and brutally honest. This is the chance to get your life back. Do not miss any debts out and talk to your hubby about it all. You may both shout and scream and cry over it, but it makes a lot of the tension go away
3. Do not rush into the first company you see. There are ones that are more than happy to get your business, but I have read a lot of posts from people who get no aftercare from them at all and wish they had never used them. Shop around a few. The good firms will offer help and advice for free at the outset, if you have to pay for that, say bye bye to them

At this stage I think all we can offer is moral support, the advice will need to come from a professional and the final decision is yours to make. But please ask any questions you like here and hopefully we can answer them

See also the pm I sent you, and I hope it all helps

Good luck on your journey to a brighter future

jayneben

Hiya

Thanks so much for your reply, sorry its taken me a while but our computer died only back online today !!

Ive been makin a few phone calls to try to sort things out once and for all but im getting confusing advice re whats best an IVA or DMP im still unsure of what each is ?? am i right in thinking an IVA is for 5yrs and DMP for wowever long it takes ? also if go for a DMP how long and how does it effect my credit profile ??? im sure my credit profile is already awful due to missing minimum payments but obviously the ideal end is to get it back on track ! Regarding the IVA possibility im just unsure of the 5yrs as both my loans are due to finish in 3yrs as alreasy paid them for 4 now and i would be over £500 better off once they have gone ! my total nightmare is my credit cards and their extremly high interest rates could i just do a DMP for them ??? Also , sorry to ask so much but im still really confused , If my husband gets back to full time work if i have entered into an IVA or DMP what would happen as our monthly income would be increased ? im a nurse and pick up differing ammounts of income would things be set on my lowest possible or not ?

Sorry for all the questions x

althas

Hi Jayneben, glad you have gotten back on line, you wonder what the heck you can do with yourself when the pc is dead :rotfl:

No problem about asking the questions. Ask as much as you want. It is a big jump with what you are thinking of so you need to be sure of things. So lets see what I can answer, and I am sure others will correct me

IVA is generally for a 5 year period, though it can be longer or shorter, that something that is dependant on your circumstances and the IP will be the best to advise you correctly on that. Mine was for 5 years. Correct on the DMP, it is however long it will take. When my IP looked at them both, a DMP for me would have took 12 or 13 years

The main difference is with a DMP it is an "informal" agreement between you and your creditors that they will accept a lower payment, stop interest and charges. but remember it is "INFORMAL", they can change their minds at any time. An IVA is a legally binding agreement, so once it is in force (if accepted by your creditors), that is it. They can not chase you for more money, change things, whatever, And as long as you make all the payments agreed and complete the reviews with the IP, at the end of the IVA term, thats it. Debts are gone. My repayment is around 40p in the £ at the moment, so if it stays like that then at the end of 5 years my creditors will have had 2/5 of their money back, and the rest is written off

Credit profile on an IVA will be screwed for 6 years after the IVA has formally been agreed by your creditors, (even if it is a 5 year IVA, you finish it early etc). Then in 6 years (or a little more to finish the clean up), then it is clean and green and you will start again, but the IVA etc will be wiped off your profile

I guess you could do a DMP for the cards and leave the loans as they are, as I have said, the DMP is informal. But you would need to clear that with an IP ans I am not 100% certain. With the IVA (it could be less than 5 years, it depends on your disposable income) ALL unsecured creditors must be included in it. Thats something to go through. Any IP worth their salt will go through ALL options with you (DMP, IVA or Bankruptsy) and discuss the viability of them all with you before recommending and starting the formalities

Arrangements for income levels will be included in the IVA agreement. For me, I could earn 10% of my base salary extra in overtime and I can keep all that, anything over that is split 50/50 between myself and my creditors. So if (for example) I earn £100, the first £10 is all mine (:T). The remaining £90 is then split 50/50. So I keep £45 and my creditors get £45. Thats is all formalised in your proposal the creditors vote on

Hope that answeres things for you a little more

churchrat

Althas--may I ask what you were told about your house (if you have one on a mortgage?) Were you told that you woulod need to remortgage in yr 4 to put more money into the IVA?

we have some friends who are considering an iva but I don't think that this has been made clear to them.
many thanks

Charco_2

That should be discussed at the very beginning...

IF there is any equity available in their property, it will have to be addressed before the end of the IVA. If you look at it from the creditors point of view, you've been using their money to pay your mortgage effectively.

It depends on how much equity is there if they will have to
1. Remortgage
2. Sell
3. Pay an extra year's contributions (making it a 6 year IVA).

The extra contributions is generally the best option but it will all be decided after a Fourth Year Valuation. (Generally if it's less than £5k of realisable equity extra contributions for a year would be asked for. They would not be allowed/forced to re-mortgage if it meant their mortgage payments went up by more than half of their monthly contributions to the IVA)

althas

I don't mind any questions at all, if I can help I am happy to

I live in rented property so I did not have the mortgage bridge to cross. I am a member of another IVA forum that is VERY active. And based on what people post there, a lot seem to have the 4 year thing in their agreement, and from what they say, if they do not have the equity to release in the 4th year, the IVA is generally extended another 12 months to cover that

But, as Charco says, this is something that should have been explained in full to them by whoever they have been talking to. I hope they are not on to one of those firms that do not actually DO IVA's, but instead INTRODUCE the client to an IP, I personally do not like that set up. An IVA is a commitment for 5 or 6 years and you NEED to know that the professional you are paying is good, knows what they are doing, cares about their clients, honest, and available to you

If they want to ask me anything, I am happy to answer based on my persona experiences, either in a post or they can pm me

I hope all goes well for them

Deep_In_Debt

Hi
Can't really help a huge amount but with regard to your bank - I suggest you open a new account not linked to Lloyd's so then they can't help themselves. I think they do have a right to help themselves if you owe them money.

If you open a new account, you can always set up a SO to pay Lloyds etc - just a token payment of £1.00pm or whatever you can afford until you get things sorted. You may also get a new debit card which will stop MBNA taking money too. Once they have your card details, they will take what they want.

jayneben

Thanks all for your advice its so appreciated,

Im looking at opening a new bank account as advised but could anyone recomend an account that they think i would get as im sure my credit rating is pretty awful and the last thing i need is repeated rejection on trying ??

Also ive got my phone interview with cccs on 7th sept which is still a few weeks away with creditors repeatedly ringing on a daily basis has anyone got any advice to keep them at bay ??
MBNA are a particular problem and are now getting pretty nasty on the phone, they repeatedly keep trying to get me to have a secured loan but im not sure that would help in the long run ??
A friend at work recomended we try to change our mortgage to an interest only mortgage for a few years and add some of our debt to it until we are back on our feet a little ( 3 of our loans are due to finish in 3yrs time which will save us £750 per month) but im not sure we would even qualify for a new mortgage anyone any ideas on this ???

once again many thanks for all your advice your helping me out so much

trudij

Ive got a Nationwide Flexaccount - its purely a cash account, you get a card that purely works in hte hole in the wall machines - but I can have direct debits and standing orders from the account too... no overdraft, no debit card, just cold hard cash

Charco_2

DO NOT ATTACH ANY DEBT TO ANY OF YOUR ASSETS.

Effectively MBNA are trying to move from being an unsecured creditor who will be dealt with if you go down any insolvency route to a secured creditor who would still be hanging around like a bad smell after you've dealt with all the rest of your debt. Deal with your debts soon too because their next step could be to go to the courts to achieve their aims!

No matter how well they dress it up it will not be a better solution for you!

If Sept 7th is too far away, you could try another provider. I'm sure it will come around soon enough though. Explain to any creditors that call/harrass you that 1. You are looking for a long term solution for all your creditors.
2. You cannot prefer one over the other by paying anything now. (unless you feel a token payment to ALL creditors would ease the way)
3. They'll hear from xxx company soon as they are now dealing with all your affairs
4. Thank-you and goodbye, there's no more you can do right now!
5. Hang up