New to IVA

lottie38

Hi
I have just received my first lot of paperwork from Payplan before setting up our joint IVA. I must admit to being very overwhelmed by the whole thing.

We have been told that we are offering a good dividend, nearly £900, and that the IVA should go through quite easily. I would just like to know if there are any other alternatives to an IVA as it looks very daunting.

I have heard that Payplan are one of the better ones for debt management. They were recommended by my bank.

I just need to know from others in this situation that it's not as bad as I think it's going to be.

JokerDurden

Lottie

Your so right the whole process is so daunting and you've more than likely got to this stage after so much stress and sleepless nights about finances.

Do you know how much pence in the pound you are going to be paying into the IVA?

For me it worked and 5 years seems such a long time but it is so worth it in the end. You can enter Debt Management Plans which could last lots longer than an IVA or there is going bankrupt however I cannot advise on the latter two.

All I can say is good luck and hope it all works out.

lottie38

Thanks for your reply. We have jointly about £66k of debt in loans and credit cards and £900 dividend. Not sure how that works out.

We were told it would take 8.5 years to pay off the debt with a DMP plus I have a debt outstanding on NI from when I was self employed.

We are not in arrears with any of our creditors but I'm so fed up of robbing Peter to pay Paul every month. We also have a secured loan on our property and no equity at the moment.

I have scoured the internet for advice and think that an IVA is the best option.

JokerDurden

Not sure about anybody else but £900 per month seems alot to pay. As you'll be repaying 82% of your debts in 5 years. Obviously thats with interest frozen. I managed at the end of mine to repay 52%. I know all IVAs are different to each individuals circumstances I'm just wondering if your allowable expenditure has been properly looked at.

I'm sure Charco will be along soon to offer advice

Charco_2

Thanks for the intro Joker! Just checking this on my phone rather than at computer so my reply might be disjointed.

As mentioned above there are other debt solutions... Most notably DMP and Bankruptcy.

I'm not personally a fan of DMPs but I do recognise that they serve some purpose in the scope of solutions available. Alternatively bankruptcy is an option - but with repayments of £900 per month this is likely to be punitive on you! (not that an IVA is easy)

There is no right and wrong answer (except for a hundred years on DMP ha ha), horses for courses, you just need to get as much information as you can on each of your options and be happy that you're making the choice that suits you best at the time. Circumstances will change no doubt but you can't keep worrying about that. Take your time, make your INFORMED choice and stick with it.

I couldn't sway you one way or other because I wouldn't know enough about your situation but a few things to think about before signing and committing:

1. You have a large disposable income, is there any way you could restructure your finances to avoid a debt solution?
2. Are you sure you getting the most out of your i&e? Post a copy up here to see if there are other allowances you are entitled to!
3. Is your proposed IVA going to be joint with a partner?
4. Do you have a property with equity? How will this be addressed?

(your dividend is going to be huge. I think you're saying you'll be paying £900 a month which is £54,000 over the course of your five year IVA, take off maybe 15% for fees, leaves £45,900... Divided by your debt is about 70pence in the £ - more if you've equity to address

Actually, just noticed you've NI to add to your £66k so the dividend will be less than 70p but still high)

Take your time, a couple of days wont make a difference... I'd just look in to reducing the £900! If you post up your I&E I'm sure I could knock a few pounds off in your favour!

lottie38

Hi Charco

We have a property with no equity. Mortgaged and secured loan which add up to more than the current value.

I have looked at restructuring our debt but whichever way you look at it we're still £600 per month short. I am earning a third of what I was earning last year, hence the manageable debt has now become a nightmare.

I&E

Joint salaries - £3336.25
Child Benefit - £204.10

Exp
Mort - 958.64
Council tax - 149 over 10 months
Water - 35.63
Electricity - 55
Gas - 30
Car Ins - 24.88
Home Ins - 23.99
Life Ins - 56.67
Boiler Service - 18.63
Phone - 25
Sky - 38
Cubs & Scouts - 20
Car Tax - 17
TV Licence - 12.43
Fuel - 30
Secured Loan - 513.74
Kids Clothes - £200 per year
MOT - 5
Housekeeping - 500 (2 adults, 3 children. Payplan's figure)
Time Share maintenance fees - 180

Our total outgoings to creditors is £1897 so as you can see, we just don't have enough money. I'm not sure how we could do it any other way. I have been advised that a DMP will take 6-7 years to clear the debt.

It will be a joint IVA with my husband although we have 2 reference nos?

Any encouragement would be appreciated. Hopefully the IVA will be accepted and I think I could then relax a little. I know 5 years is a long time but I have a £300pm loan that's got another 5 years on it. So to be debt free after that time is worth the aggravation, I think!!!

Lottie

FoggyBrain_2

Can't comment on the technicalities, as we are just starting on this road ourselves. But would like to say that 5 years looking forward can seem daunting ... but at least it will be 5 years where you know exactly whats coming in and what's going out, and that the latter isn't more than the former. And, think about the last five years, 2005 doesn't seem that long ago .. so in five years time you will be debt free and thinking how quickly the time passed. Best of luck with it.

lottie38

You're absolutely right, Foggybrain. I can't wait to wake up in the morning without that sick feeling in my stomach and to be able to eat a full meal again. At least I'm shedding a few pounds, just not the way I was wanting to do it.

Doesn't seem 5 minutes since my youngest was born and he'll be 7 on Christmas Day!

Good luck to you too. Hope it all works out.

Charco_2

Hey Lottie, as long as you've considered the alternatives, like restructuring. The first bit of encouragement then is that you're definitely doing the right thing by confronting your debts.

Who knows where the property Market will go in five years time, as long as you're aware that any equity will have to be addressed.

Given the size of your debts and the monthly repayments you're expected to make then it definitely seems that you are insolvent - so that would be the next bit of encouragement, you're looking in the right area for a debt solution... Personally I'd avoid a DMP almost always!

Without the advantage of a crystal ball no-one could know definitively but if you're happy then go for it.

PS - The two reference numbers is because there is no such thing really as a joint IVA... theyre "interlocking and mutually reliant" - so it's two IVAs for two individuals but they're created together and will run side by side!

PPS - I'll comment on the I&E tomorrow when I get on to a computer!

lottie38

Thanks Charco, your comments really do help.

I think it's just such a big step to take I will worry until it's up and running.

We have a timeshare, do you know what we will have to do with that? Do we have to sell?

Charco_2

I did spot it on your I&E... Can't imagine your creditors will ignore it but it's unusual, Probably not much value to you creditors but they'll not let you keep paying towards it... Which increases your monthly contribution to £1,100 a month - definite savings there tho!