Brain Boggled - advise/help please

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Hi, Been to CAB today who said as OH is not working can only do token payments but when he's back in work they would recommend a IVA.

Owe £52000 - he suggested a repayment of £400 per month at 40p on the £.

What he didn't mention and I am picking up on is the 6 year/remortgage thing - is this compulsary as we do have some equity in the house (approx. £17k - can't remortgage as more than 85%) but hopefully that would be more in 5 years time and wouldn't want a shock we weren't expecting.

Working it out at 40p on the £ means we would repay approx £21k - I have a family member who will lend some and a car that I could sell and get this amount together in one go - I have heard of people doing this as a one off IVA but would that then be the end of it? as we could presumably do this even with OH not working rather than waiting in limbo.

I can cover the mortgage and council tax/utilities out of just my wages but none of the credit card/loan payments so if they were gone we would be ok until he gets a new job (no sign in the last 15 months though!)

Any help/advice would be great, thanks

Comments

  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Are the debts joint?
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • mollymootoo
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    Hi - mortgage is joint - debts are in single names (approx half each) but total is for all of them
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Well then your IVAs will be separate. It's rare for the IVas to be "Interlocking and Mutually Reliant" (joint) without joint debts, but it is possible!

    One thing i should point out is: Dont be too keen to raise the lump sum as a one off payment because if you have money left over as a surplus each month (you're talking about £400) then regardless of how much you might have as a lump sum you'll ALSO have to pay a monthly contribution.

    Sixth year/remortgage thing
    You'll only have to remortgage if you have equity to release. That means if your mortgage is less than 85% of the value of your home. If you cannot remortgage or if it is not practical to remortgage then you might be required to pay an extra year's contributions. (If you have equity to release then paying an extra year is actually the better option if you can!)

    Lastly, I dont know where the figure £400 came from - off the top of the head of some guy at CAB perhaps? You would have to draw up an I&E showing exactly how much you can afford to pay. It's not calculated backwards from the amount of debt you have to hit a certain dividend (pence in the £) - you'll pay as much or as little as you can afford (for instance £300 a month would give a probable dividend of 26p in the £ which, depending on who your creditors are might be acceptable - this also does not include the possibility that you would have equity)

    It would be wise to discuss this with an IP or two
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • Max_1066
    Max_1066 Posts: 169 Forumite
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    Charco is spot on ... you need to get your income and expenditure (I&E) sorted out and then go from there. Be realistic about what you spend and what you can reduce. There are 'accepted' amounts for various items and its surprising what can be included sometimes - although no gym memberships.

    Good luck.
  • mollymootoo
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    Thanks for the advice - we did do an I&E and the £400 was calculated as being available for repayment based on a new wage of £1200 take home for OH as we are in minus at the moment with just my wage - hence being stuck in limbo
  • Max_1066
    Max_1066 Posts: 169 Forumite
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    If your OH isn't working at present and your I&E comes out -ve this might be the right time to consider a one-off IVA.

    Def be a good idea to talk to a few IP's asap.
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