CCCS and IVA's- help please

mistrey

Hi

My husband has debts of £23,000 on credit cards from before we married. I have always been the major wage earner and pay most bills and we keep all of our finances seperate. DH has only been able to help with our household expenses to the tune of £150 a month as he has been paying nearly all his wages to pay off the minimum payments on his cards. However I have recently been informed that my contract at work will not be renewed (in March)and so he has finally decided to do something about his finances.

On my advice he rang the CCCS who went through his finances and recommended that he do an IVA and pay £165 a month instead of the £650 he has been paying. Two things: 1) they kept trying to bring my finances into the equasion, even though his debts are nothing to do with me, and I have no debt at all (nor do I have a penny of spare cash). He said that the lady kept saying tht I should do more to help! I pay the rent, gas, electricity, childcare, food, car, petrol, and mobile phones, he only pays the cable bill!!
2) I've heard (including on Watchdog) about dodgy IVA companies, CCCS are sending him out some documents to sign and as far as I can make out setting up his IVA, is this right? Do they actually manage it, and if so are they one of the decent ones?

Any help appreciated. Thanks

Charco_2

There are some bad IVA companies out there, there are some excellent companies! You do right to ask questions.

I'm not a fan overall of the CCCS but you probably wont go far wrong with them.

I hope i can make this point clearer to you though as regards "bringing your finances into the equation"

First off: they are not trying to force you to contribute to your husbands debts, nor could they EVER force you to contribute! However on this point you will be far better off i would imagine if you do share your details with them!

It's like this: You're currently paying all of the household bills (bar the cable)... in the IVA however, your husband would contribute to all these bills and then what ever he has left over would go towards his IVA (and you would keep whatever you have left over - that point is important, you are not contributing to his debt solution, so don't let CCCS - or anyone - tell you that you should... there is an exception to that).

So while at the moment your husband cannot afford to contribute to all the other household bills and so you're struggling to pay them all on your own... IN AN IVA, your husband wouldn't have to pay £650 every month to his debts so would first be able to contribute a FAIR SHARE to the household essential bills and then contribute his surplus to his IVA

(Imagine you earn £1,000 a month and hubby earns £500 - just to keep it simple.
Currently he'd be paying for cable and you'd be struggling to pay all the bills and hubby would have a huge amount of surplus for his IVA... £500 - "cable bill" = £470 a month towards IVA

However if you share the household bills of £850 total - keeping it simple again.
then you earn 66% of the household income and hubby earns 33% so you pay 66% of the bills and hubby pays 33%... £850 x 0.33 = £280 so he would have £220 left over to contribute to the IVA)

Does that make sense?

mistrey

That makes perfect sense, thank you. I feel better about sharing my finacial information now. I'm not sure the best route to do this though, I suppose we'll just have to wait for the paperwork to come through?

So do the CCCS act as the IP in this instance? Or will they have passed him onto a different IP?

althas

Hello Mistrey

Let me impart my personal experience about your questions, hope they will put your mind at ease

1) When an IVA proposal is drawn up, the HOUSEHOLD income is used as a basis, I guess as the presumption that as you are married and living together, you contribute to the household bills each. What will happen, is an allowance will be suggested for various living expenses, again on a HOUSEHOLD basis. Food, housekeeping, telephone, tv license, insurances, council tax etc. The surplus remaining is then what is available to offer the creditors

So, for example, say you bring in a joint income of £2165 per month. As it is at the moment, your partner pays £650 of that out on his credit card bills, leaving £1515 as the HOUSEHOLD spending pot. From what you have said, CCCS have suggested this payment could reduce to £165 a month, so this means that your HOUSEHOLD spending pot will INCREASE to £2000 a month. I.E you have £485 a month more available to live on

An IVA is meant to get money back to your creditors, but also it is not meant to put you on a poverty line. Yes it will be tight, you will not have masses to spend on Christmas etc (unless you don't spend your full allowance each month. That is perfectly fine to do, and save it for contingency, Christmas etc), but on the other side, they will not expect you to eat Tesco own brand value beans at 9p a tin for the next five years. It will be a happy medium for all parties

So when you are drawing the proposal up, be 100% open and honest in it. Sit down and work out ALL you pay each month, insurances, car, car tax, car maintenance, TV license, sky TV if you have it, and so on. You may be advised to drop some things from your outgoings, but that will be discussed at a later date. Start the process with a "bear all" scenario

2) Yes there are indeed a lot of cowboys out there, firms that promise the earth, then screw you over, deliver nothing. I do not want to frighten you off an IVA, it has been one of the best things I ever did, just the bad companies. CCCS are not insolvency practitioners, and by law, only a licensed IP can do this. What CCCS and a lot of companies will do is act as an intermediary and “introduce” you to a licensed IP with another company. Some of these intermediaries with then charge you a fee to do this. Not good. In fact if ANYONE asks for an introduction/arrangement/up front fee, say bye bye there and then

So if I can give you a one main suggestion before you sign up to anything

When you talk to the company CCCS introduce you to, do not commit to anything then. Visit www.iva.com

That website is an absolute goldmine of information. They have a list of all the firms and IP’s and (most importantly) reviews of them all by their clients. So you can have a look at the company and see what people really think of them. How they have dealt with the whole process and (most important) the after care and support throughout the whole IVA. You must remember that you have to be comfortable with them, as you will be dealing with them for potentially the next 5 years. What I would also suggest is looking for some of the top rated IP’s and companies, and talk to them as well. There is nothing wrong with shopping around until you find someone you are comfortable with. That is how I found my IP, and am currently 100% satisfied with them

It is a scary step to take, there is no disguising that fact, but once you have done it, the sense of relief is fantastic. But congratulations to you both on realizing that it is time to do something, and good luck on the journey. Never be scared to ask for advice and help for the guys and gals here, there are a good bunch

Charco_2

CCCS is a "charity" - yawn!

CCCSVA is the sister company that does their IVAs - not a charity! ie, they refer you to another building 20metres away.

Depending on your jurisdiction however they may refer you onto another company (GT for example if you are in Norther Ireland)

Shop around however and compare that what one IP is telling you is the same as what another IP is telling you. When you've drawn up your Income and Expenditure show it on here and we'll see if there is anything that might "inadvertently" have been left out! Cant hurt!

ONLY THING I WOULD WARN ABOUT IS: do not pay anyone for advice... plenty of companies will look for up front payments, promise you the earth etc, but realistically, give or take £50 on your monthly budget each IP will come up with similar figures... so do not pay anyone a penny until a solution is in place!

(and don't let it scare you too much... there's always a solution, and people on here are only too happy to help!)

mistrey

Thanks everyone I really appreciate your advice/help. I've just contacted IVA.com and they are getting Debt Free Direct to call me. Has anyone got any experience of this company?