Would an iva be right for us?

gailey_2

Motherinlaw keeps suggesting idea to hubby but im not convinced its right option for us.

hubbys debts -loan 14.9% borrowed 17grand paying out 27grand with interest, been running nearly 2years got 4years left at 386 per month.

hubbys od-pretty much stays at 2700 limit once bills come out.

hubbys credit cards

credit card 1-4500- unsure of apr on either of his cards
credit card 2 -2500

total his debt 9700+whatevers remaining on loan in guessing around 20grand maybe.

my debts

loan 1600 paid off some now at 900 ends 4years and is 40pounds per month,

overdraft -same as hubbys pretty much stays same.1750

catalaogue 1000 shocking 44%interest rate.

my credit card 1600 they kindfully upped interest rate to 29.9%over last year.

my debts= 5half grand.

At moment we paying reguarly although hubbys sometimes only paying min amount.

our outgoings including debts are 2400 and his salary is 2400.
we switching things again.
changing car to cheaper one.
making more cutbacks ect

I dont work as have 2kids 1 on way.
i get cb and 10pound a week tax credit.
I also ebay and make money that way and pay for anything kids needs out my money plus my debts usually about 150pounds a month just in debt repayments.

hubby pays 650-700 a month on his debts.

we rent privatly .
we have 2cars 1 inherited and used for hubbys work as cheaper.
His car bmw reason we so in debt in fisrt place its jinxed.
cost us thousands over years.
always going wrong thing is not in good condition, very high milage , we be lucky if we get 2grand for it we need to sell it in new year to get car car to fit 3kids.
Our other car is tiny micra..

Hubbys hopeful hes due back 2grand from inland revenue.
so plan was part exchange and pay some towards car and some off debts.
hubbys looked for other better paid fulltime jobs and additional 2nd parttime job and had no luck.

We are managing just, theres moments we run out of cash before payday but we get by.

hubbys quite down as feels we could be stuck with these debts ie loan until 2015 and wants to get credit cards/od clear.
We already live to very tight budget planner and have very few treats.

I manage to get groceries down to 200-250 by shopping around, cooking from scratch, packed lunches.

Im of the opinion we should just continue but hubby reckons we would have more spare cash with iva and be debt free in 5years time as they wriite off some of it.

I feel confident can clear my debts within next 2-3years.

been reading martins guide and says fees for setting up iva and annual fees amounts to 7500 in total is this accurate?

Also how does an iva effect credit rating?
is it worse than a dmp but better than bankrupcy.

Dont plan to get in anymore debt once debt free.

But do dream of owning house one day.
plkus in private rental agents run credit checks would this affect us getting new rented house even?

bankaccounts-would we both need to switch to basic bank accounts as at moment we have visa delta. overdrafts and cheque books.

sorry for all questions just want to be sure.

dancingfairy

I would suggest getting in touch with one of the debt charities Martin recommends or even doing the online CCCS debt remedy which will give you an intial impression of what it recommends -if an IVA is suitable then the debt charities should recommend it.
df

grey_lady

A lot of IVA's fail - really worth getting advice from a debt charity.

gailey_2

Thanks guys just switching to smaller car has saved 100 a month.
we looking at switching other things and cutting back more so he can pay more off cards.

we have no savings so when something goes wrong it goes on credit card.

in last year we have done payday loans 3times but paid off straight away not rolling debt.

we can balance and make rapayments just!

As I said to hubby I cant see his creditors being happy with us paying for example 200quid off his debts and having extra 300quid to spend.

Why do ivas fail? is it bacuse people cant keep up with payments agreed?
or do the creditors pull the plug?

Moi_63

grey_lady wrote: »

A lot of IVA's fail - really worth getting advice from a debt charity.

Do they?

A long as the I&E is realistic and your IVA payment is an 'affordable' amount I can't see any issue seeing one through.

Of course, I would say that having just entered one

grey_lady

About a third fail, not sure why but I'd guess changes in circumstances, they last up to 5 or even 6 years in a few cases so I guess a lot can change in that time.

Something to get professional advice on though, I think you can get a subprime mortgage after but again worth checking with a mortgage broker.

Moi_63

In theory 12 months after your IVA concludes you credit rating should be unaffected by an IVA. If defaults do not 'drop off' you can provide a copy of your completion certificate and a letter requesting them to be removed. Then you should be able to get a 'regular' mortgage.

Five years is a long time. But most people pay for a car for that length of time.