advise with Debt Management Plan/IVA

MrC1977

Hi all

Just really looking for information regarding what is best - a debt management plan or an IVA?

I have about 30k debt and a flat with my ex. the flat was being rented out but the tenants have moved out and so it is on the market now and untill it is sells i am crippled however once it sells then things change and i can afford to pay back more.

I want to get debt free badly but also have a little bit of a life - not too much but be able to be reasonable normal but on a budget if that makes sense. what is the best solution?

Also, i am talking to pay plan - shall i continue making minumum payments by borrowing money off family which i will need to pay back or am i best to default on credit card payments

Chris

thanks for any responses

Pott5y

I am on a DMP with Payplan and have been for 6 years. I have been very happy with them.

IVA vs DMP is a very personal thing and there are a lot of reasons why both can be good.

I went down the DMP route as it is flexible and as circumstances change it is easyish (though no thanks to the creditors) to adjust your payments as circumstances change.

An IVA is rubber stamped by a court and you are tied pretty much to making the same payments for 5 years.

I am sure that someone else will be able to give you a much better idea, but it is probably worth you posting a SOA so forum users can advise which is best.

Good luck

MrC1977

here goes my SOA...... thanks for the help

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1857
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1857
Monthly Expense Details
Mortgage................................ 350
Secured/HP loan repayments.............. 0
Rent.................................... 250
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 30
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 150
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 3
Car Insurance........................... 36
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 20
Entertainment........................... 200
Holiday................................. 50
Emergency fund.......................... 0
Total monthly expenses.................. 1484

Assets
Cash.................................... 0
House value (Gross)..................... 70000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 72000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 70000....(350)......0
Total secured & HP debts...... 70000.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
credit cards...................21000.....592.9.....0
loans..........................15000.....300.......0
Total unsecured debts..........36000.....892.9.....-

Monthly Budget Summary
Total monthly income.................... 1,857
Expenses (including HP & secured debts). 1,484
Available for debt repayments........... 373
Monthly UNsecured debt repayments....... 892.9
Amount short for making debt repayments. -519.9
Personal Balance Sheet Summary
Total assets (things you own)........... 72,000
Total HP & Secured debt................. -70,000
Total Unsecured debt.................... -36,000
Net Assets.............................. -34,000
Created using the SOA calculator at
Reproduced on Moneysavingexpert with permission, using IE browser.

MrC1977

sorry forgot to add i have £800 debt in over drafts..

Marisco

Hi MrC, the one huge expense that stands out is entertainment!!! That could be cut right back, also the holiday fund if it's not already booked. Car maintenance seems a tad high as well. Clothing, could you make do with what you have, and shave a bit off the presents? Is the petrol high because you use it for work?

RAS

Hi

Please can you breakdown the creidt cards and list oall the APRs. It may be possible to work out a way of paying things off effectively.

The other thing is that if you expect to clear this debt when the flat sells, a deal that permnanently wrecks your credit rating like any insolvency deal is maybe not a good idea.

is the flat priced to sell? Speak to the guys on the housing forum.

MrC1977

Marisco wrote: »

Hi MrC, the one huge expense that stands out is entertainment!!! That could be cut right back, also the holiday fund if it's not already booked. Car maintenance seems a tad high as well. Clothing, could you make do with what you have, and shave a bit off the presents? Is the petrol high because you use it for work?

Hi, thanks for the response.

the entertainment is high I know and I have tried to cut it down. still working on futher potential cut backs but I am trying to be honest as i can be. The reason i am in this situation is that i wasnt honest to myself about expenditure.

Car is used for work and i based my figure on last year ependiture where i had a clutch problem - so maybe it wont be as much. Clothes were mainly work clothes as i need to look smart for my job. i guess i maybe looking at worst case scenerio for both these. what would happen if i dropped them right down and then got a car problem for example?

Presents - good call. i am going to speak to family and explain that i cant buy much so dont want much back.

thanks for the feed back

MrC1977

RAS wrote: »

Hi

Please can you breakdown the creidt cards and list oall the APRs. It may be possible to work out a way of paying things off effectively.

The other thing is that if you expect to clear this debt when the flat sells, a deal that permnanently wrecks your credit rating like any insolvency deal is maybe not a good idea.

is the flat priced to sell? Speak to the guys on the housing forum.

the flat sale will cover the mortgage and thats all. however it will clear up the money i spend on the mortgage to go against other debts.

Sorry will try and breakdown the credit cards tomorrow as I dont have exact info on me - only totals and minimum payments

thanks for the help

RAS

OK

but at that point your finances will improve, so this is a blip rather than a permanent problem.

Do you have any old gear that you no longer use and can sell on e-bay, amazon or at a car boot sale?

Any chance of lift-sharing?

In the short-term stop buying clothes.

MrC1977

RAS wrote: »

OK

but at that point your finances will improve, so this is a blip rather than a permanent problem.

Do you have any old gear that you no longer use and can sell on e-bay, amazon or at a car boot sale?

Any chance of lift-sharing?

In the short-term stop buying clothes.

I do have some stuff that i dont use - thats an excellent idea.

Unfortunately no chance on the lift sharing

anyway thanks for the help - and definately no need to by clothes for the foreseeable future.

happycamel_2

You might be able to do something with your mobile and internet charges. If you're not in a contract go payg. If you are most phone providers now do broadband as well - we're with O2 and only pay £6,50 for broadband, which makes me feel a bit better about DH's iphone at £30 a month.

Can you cut the groceries down a bit? Is this really all you spend? Make sure you aren't buying food out the house - make sandwiches for lunch etc.

Sort the entertainment out! This is excessive and you can't afford it right now.Firstly work out where it's going then work out how you can cut down. For a start try doing everything half as much. So if you usually buy 4 pints a night buy 2 and make them last. If you go to the cinema every week go every other instead (or borrow DVDs from the library for £1 a week). Tell your mates you need to cut back a bit, they might take the mick a bit but they'll respect you for facing up to your problems and dealing with them.

Time to start a spending diary

Good luck