Need some answers please

mollymaybe

Hi before we enter into an iva we wondered if anyone on this board could answer some questions, before we start the process we want as much information as we can get. I know we can get all this from cit advice but i think peoples experiences are so much more valuable for us newbies, so here goes;
My son is 12 and gets DLA, is this money taken into account when working out our income, also child benefit? We are thinking maybe this should be paid into his own account before we start an iva?. Also as he has to travel to school we get help with transport costs. As we take him ourselves we get a petrol allowance, will this also be taken into account as part of our income, thanks in advance to anyone answering these questions for us.

judojub

Hi mollymaybe
I didn't want to read and run and hopefully somebody will be along to answer your questions with more detail.

Your Child Benefit will counted as income. Your DLA will also be included as income but I would think that this should be absorbed by expenditure needed to care for your child. Make sure you put down the costs of everything. As for the petrol allowance I am not entirely sure but I believe it will be classed as income but again I should think that it would be used for it's intended purpose and not to go towards the creditors.
Best thing to do is to have a word with your IP. They are best placed to put your mind at rest.

mollymaybe

Thanks judojub just getting questions answered that come up so i am prepared. Will be making an appointment next week at the cit advice and sorting bank accounts out before taking the plunge, wanting to make this as smooth as i can and have as much information as i can. I suppose the worry is there is something you miss and i like being prepared.

judojub

No worries molly.
Just remember that each case is individual meaning one IVA might well differ slightly to the next. The best person to answer all of your questions will be your chosen IP. If it is an IVA you have decided on (and if you haven't already done so) then pay a visit to https://www.iva.com. There are a list of companies on there. Give a couple of them a ring and they will be able to give you some free and impartial advice too.

debt_doctor

Hi,

What has made you feel that an IVA is your best option?

DD

mollymaybe

Hi debt doctor, more money going out than coming in, we have about 60,000 debt between us. Have tried releasing equity in the house but been refused. We have never missed any payments on credit cards but have paid a day or so late so we gather this is why we are not able to go this way. We felt if we could pay off a large part of the debt we could cope with the rest. So its looking like the only way out of this hole we have dug ourselves is doing an iva. I have been looking on here now for about 6 months so i am not going into it lightly. Making the first step i know is going to be hard so i am trying to get everything organised first. Also find it embarrassing that we have let things get so bad, but we live very frugal now so an iva to me seems a light at the end of a tunnel.

debt_doctor

If you didn't have to pay any of your 60k debt, how much spare income per month would you have? (living reasonably, not lavish and not frugal)

How much equity?

DD

mollymaybe

We have £45 - £50,000 equity in the house.Between us we pay £ 1,280 on credit cards alone, god did not realise it was this much, head in the sand definatly. Then £318 on a loan and about £600 on store cards then normal dds. Income is about £2,830. I find each month our overdraft is a bit higher so i know we are on the edge. I would feel so well off if we didnt pay out so much on our debt, makes you realise how easy it is to let it get out of control. So that's us not a nice picture which is why we know we have to sort ourselves out sooner rather than later. Quite hard putting all this down but im a realist and know we have only ourselves to blame and need to get ourselves on the right track before we get any older.

debt_doctor

Hello again,

We don't do blame games on here. We all had our own reasons for getting were we are / were. Whats important is that you realise that you need to do something, and clearly you have, so congratulate yourself in that.

Whilst it is impossible to give full debt advice on here (you should seek help from a debt charity, see my signature) it looks like an IVA might well be good for you as your house would certainly be at risk in BR unless someone could come up with a substantial sum of money to buy the ben interest.

You would pay your deemed surplus income in to an IVA for 5 - 6 years so you MUST make sure that you have made every allowance possible so that your monthly budget is not too tight.

Have a look at other peoples SOA's and perhaps put one of your own up for us to look at.

DD

debt_doctor

I have also made the assumption that you want to save your house. - if not, and you would rather move to private rent, then the whole strategy would be different.

DD

mollymaybe

hi yes we do want to keep our house. Another question is if they take my sons dla into consideration he will be 16 in 3 years time so this is his money, we then will be 3 years into a iva and our income will be reduced. Will this mean it will fail if we are not able to keep up payments which would be based on our income now?