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IVA Question

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Currently in a DMP with CCCS paying £329 per month on debts of around £73,000.

We had a review last night and our payment is going to increase to £358 per month. At the end of the review the lady i spoke to suggested we should look at doing an IVA as on the DMP it would take almost 16 years to pay off.

Is £358 a realistic figure and what is this as p in the £ figure?
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Comments

  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Looks like probably about 23p in the £ (as a brief calculation)*.

    I certainly agree that looking into an IVA instead of a DMP is a much more preferable option... but why didn't Payplan mention this the first time you approached them? (rhetorical question)

    *a rough calculation based on:
    £358 x 60 = £21,480
    IP fees roughly £5k so
    £16,480 / £73,000 = just over 22.5p
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • boblardo
    boblardo Posts: 99 Forumite
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    Thanks for the reply I have another question.

    My wife is currently a stay at home mum but we have discussed her returning to work. Now my understanding is that if she returns to work and, theoretically speaking, earns £500 per month that is an extra £550 per month surplus and it will be taken by the IVA?

    Is this correct or am i way off the mark
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
    edited 28 April 2010 at 9:39AM
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    How would an extra £500 equal £550?

    Short answer no! Long answer is "no" too but it gets complicated. Your household income would be pooled (your earnings plus your wife's). Keeping it simple just say you earn £1000 a month and she'll bring in £500... Then you bring in 66% of the household income and your wife brings in 33%. Then you'll pay 66% of the household expenses and your wife pays 33%. 66% of the household surplus is yours to contribute to your IVA and your wife is under no obligation to contribute any of her surplus... Afterall, she probably has debts of her own to look after (she CAN contribute to your IVA if it helps you achieve a dividend your creditors would deem acceptable.)
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • boblardo
    boblardo Posts: 99 Forumite
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    Thanks again for the replies

    I think I need to clarify. The debts are joint debts so we would both need to do an IVA or a joint IVA!!

    So i guess my question should have been, once in an IVA would any income earned by my wife, would that be classed as surplus?
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
    edited 28 April 2010 at 9:55AM
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    Technically, there is no such thing as a Joint IVA... they would be "inter-locking and mutually reliant" but it's actually two IVAs.

    It depends really on the set-up then in the IVA... more complications!

    Without an income your wife would have no money to offer towards her IVA - but obviously part of your home living arrangements is that you actually earn the bread and in being a stay at home mum she allows you to earn the bread, so she is entitled to some of that!

    If she went out to earn a little extra then obviously it would have to be taken into account in the way I explained above but a clever IP would ensure that there would be enough contributions from you for your IVA to be accepted AND enough contributions from yoru wife for her IVA to be accepted...

    It would depend on how much of the debt belongs to each of you... could you list the debts that belong to you, the debts that belong to your wife and the debts that are joint?
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • boblardo
    boblardo Posts: 99 Forumite
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    HSBC - Joint - £30K
    Northern Rock - Joint - £24K
    Abbey - Joing - £100
    Alliance & Leicester - Joint - £250
    Pay Day Loan - Mine - £800
    Pay Day Loan - Mine - £350
    Pay Day Loan - Wifes - £500
    3 Mobile - Wifes - £70
    3 Mobile - Wifes - £80

    Hope this helps and thanks
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    First thing I notice is that you will both definitely need HSBC AND Northern Rock to vote yes.... the both hold more than 25% of your total debts.

    Northern Rock will want a minimum 6 year IVA, and if you have a mortgage you'll have to go interest only. It's amazing that they're the most difficult to deal with when they were the first to hold their hands out to the public purse when things got tough for them!

    HSBC generally would require a dividend of 40p in the £ - but everything is negotiable!

    Also, did you not mention debts of £73k but you've only listed about £55k?
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • boblardo
    boblardo Posts: 99 Forumite
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    This is a bad day really

    (J) ABBEY NATIONAL PLC (BC) £35.00
    (J) ALLIANCE & LEICESTER GIRO £125.00
    (M) Next £194.00
    (J) DIRECT LEGAL & COLLECTIONS (HSBC) £40,592.50
    (W) 3 Mobile £70.94
    (W) 3 Mobile £87.95
    (M) VANQUIS £373.44
    (J) NORTHERN ROCK £23,975.51
    (M) Pay Day Loan £309.00
    (M) Pay Day Loan £991.28
    (W) Pay Day Loan £684.29
    TOTAL £67,438.91

    (J) - Joint (W) - Wife (M) - Mine

    So not £73000 but £67438

    Phew, these are atleast correct
  • boblardo
    boblardo Posts: 99 Forumite
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    Just to add my salary will increase by £60 per month as the tax office got my code wrong so surplus would be £418
  • boblardo
    boblardo Posts: 99 Forumite
    First Anniversary Combo Breaker
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    We don't have a mortgage
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