Help please - Advice most welcome, thanks!

Lucy111_2

Hi everyone, first of all I am new to this website. Basically have been through a tough time last couple of years. Got caught out in at the height of the property boom buying a house that I didn't know I couldn't afford. Couldn't sell my other house and had to rent it. Sold the expensive house before Christmas and got a much smaller cheaper one.

Now I owe a family member quite a bit he lent me towards deposit.

I also have about £28000 of debts, mostly one loan of £21000 with my bank. The rest made of of smaller loans and a credit card.

I have always had an excellent credit record until the last 3 years. I am just getting further and further into debt each month. Oh overdraft of £6000 also.

So any advice on IVA's is much appreciated. I really didn't want to go down this route as I thought I could pay everyone, but I think I'm admitting its impossible. This whole thing has taken over my life and my health is starting to suffer.

Had I not so much to pay out each month I would have a few hundred left over to pay out ok.

Will my work find out about this?
Also I have a car loan not included in the above figure, will I have to give up the car??

Thanks for any advice

FoggyBrain_2

Hi Lucy. Pop over to https://www.iva.com for a listing of reputable IP companies with reviews. Give a couple a phone and have a chat -- it costs nothing and you can suss out the pros and cons.

Work won't find out -- at least no-one involved will tell them. You will appear on the Insolvency Register, but nobody not in debt knows it exists! Make sure none of your creditors have your works phone number, or they might try to ring you there.

You won't lose your car ( unless it's in the supercar bracket)

dancingfairy

Hi Lucy - i would phone one of the debt charities Martin recommends and take it from there - if an IVA is suitable then I would start looking at the IVA website for a good practioner. Some of the charities Martin recommends are National Debtline, CCCS and going to your local CAB for help.
The biggest problem I think you will have with whatever debt solution you go for whether it be a dmp, IVA, bankruptcy etc will be the money owed to family as they are likely to only get part payments -similar to your other creditors - anyway best bet is get in contact with the debt charities and take it from there.
Best of Luck
df

Lucy111_2

Hi, thanks I have rang CCCS. Have to ring them back with income and expenditure. See what happens. Not sure if a DMP might help me or will take to long to pay off.

Thanks

judojub

Hi Lucy.
I think a DMP is only seen as a short term solution really. Creditors do not have to freeze interest, so although they could accomodate you to begin with, they could also raise your interest at any given time. If I were to enter a DMP it could take us 14yrs to pay our debt off and that is only assuming they agree to freeze interest for that entire period!!
At least with an IVA it is legally binding and creditors have to freeze your interest. I am however far from being an expert. Pretty sure somebody else with more knowledge will come along to help. CCCS I am sure though will point you in the right direction. Good Luck

Charco_2

dancingfairy wrote: »

Hi Lucy - i would phone one of the debt charities Martin recommends and take it from there - if an IVA is suitable then I would start looking at the IVA website for a good practioner. Some of the charities Martin recommends are National Debtline, CCCS and going to your local CAB for help.
The biggest problem I think you will have with whatever debt solution you go for whether it be a dmp, IVA, bankruptcy etc will be the money owed to family as they are likely to only get part payments -similar to your other creditors - anyway best bet is get in contact with the debt charities and take it from there.
Best of Luck
df

Not entirley true, in a DMP or IVA your family members may get paid but in BR they defintiely wont.

Associate creditors (which means family and relations) are only paid in BR after the costs have been paid, and all unsecured creditors have been repaid in full plus statutory interest - in which case they wouldn't be going BR in the first place!

By all means speak to some of the debt "charities", but then double check their advice with a professional firm - they will also provide advice for free... DO NOT PAY ANYONE FOR ADVICE!

mel12

Not entirley true, in a DMP or IVA your family members may get paid but in BR they defintiely wont

DMP the aim is to (eventually) pay off the entire amount but at a slower rate. IVA creditors get a proportion (eg 20p in the £ would mean 20% of each debt). You can't favour one creditor over another in any of these options (if u do this before BR the OR can even ask the family member to give the money back).

The other option with the family debt is to not declare it and keep it 'on hold' to pay off privately later, but bear in mind u won't have much surplus till the IVA/ DMP/ any IPA in bankrupcy is finished.

Lucy111_2

Thanks everyone for the advice. I have made out an income and expenditure report, and I do have more surplus income than I thought! Living beyond my means for too long. I have contacted the biggest debtor and they have agreed to freeze interest and charges for one year and reduced my payments quite a bit. I am going to try the same with the 2 smaller loans and the credit card. They may favour this rather than me go down the IVA route.

I can't have the family finding out, would destroy my mum and she is going through depression at the minute.

If I can get the overdraft at least cleared in the year and lessen the smaller loans then I would be in a better position this time next year. If the debtors agree to this I will have to seriously budget and live on the minimum for a year, no big luxuries!

Its all very worrying and scary and nobody to share it with as I'm a single mum. But, at least I have faced up to it at long last which is half the battle!

FoggyBrain_2

Hopefully the years DMP will give you some much needed breathing space. Best of luck, Lucy111

katiemay_2

Just regarding the car - as mine was valued at less than 5k I was allowed to keep it, but my friend whose car is on finance and worth a lot more was also allowed to keep hers purely because she did have it on finance. If she had owned it outright and it was worth more than 5k then she would have had to give it up.

FoggyBrain_2

That might be a CCCS thing, katiemay. I have friends in IVA with cars around £8 - 10k and been allowed to keep them. As long as it's a modest vehicle it should be OK. After all it has to last at least 5 years and not need too much in the way of repairs.