SOA Attached - Help Needed!!

darloboy_2

Hi All

I’m posting on behalf of a friend, who doesn’t have internet access.

Firstly, this is my friends SOA.

Joint Expenses

Rent £450
Council Tax £105
Gas £30
Electric £30
Food £200
Home Insurance £20
Water Rates £20
TV Licence £11

Total £866 divided by 2 = £433

Own Expenses

Petrol £100
Car Insurance £55
Social £30
Clothing £30
Car Tax £20
Car (MOT and maintenance) £15
Pension £20
Phone £60

Total £310

Total Expenditure £743

Total Income £1032

This should leave a monthly balance of £291 towards debt repayment. Here comes the bad news….!

She currently also pays £400 per month as part of a 5 year IVA with a company called Beesley & Co. Unfortunately she didn’t have any knowledge of people like Payplan or CCCS etc before she entered into this. I believe she is around 1 year into it, so total payments to them will be £24k. She has told me their fee to administer the IVA is £8k, so £16k will be going to creditors, and her total debts were circa £34k, so around 47% return to creditors (I think).

Obviously the biggest problem is she is already at a negative of £109 per month, and very upset and distressed, to the point where she sees no way out. Her circumstances have changed recently in that her and her partner had to leave their rented accommodation and move to alternative, which resulted in an extra £80 rent per month (so effect for her is £40). Also she had had to take a slight pay cut (£50 per month), which has also impacted her IVA. Her IVA administrators are not interested in her change in circumstances; they are simply interested in getting their monthly payment (surprise surprise).

Is it really worthwhile pursuing the IVA from a negative position? I am sure she is possibly able to trim some savings off the expenses, however even if she gets somewhere close to the £109, is it really worth pursuing the IVA, or do you think the only way to go will be to pursue a bankruptcy option, both in terms of her finances and also her health.

Any help given would be greatly appreciated; obviously I will do my best to answer any questions on her behalf!

Many Thanks
Craig

poorbutrich

HI there - thanks for posting of behalf of your friend. More knowledgable DFWs will be along to help soon, but the things that leap out at me are the clothes and social - could they be put on hold for the moment? And the food bill seems high to me, plenty of savings to be made there. I appreciate your friend doesn't have internet access, but the OS board could help with food savings....

skylight

Now she knows about Payplan and CCCS, she needs to speak to them for advice.

They may be able to help out.

Or - threaten the current company she is with that she needs help or will go Bankrupt instead. Then they don't get paid and may actually help her.

magicmaria

wrote:

Hi just a quick look at your friends SOA highlights quite a few savings she could make

Joint Expenses

Rent £450
Council Tax £105
Gas £30
Electric £30
Food £200 (seems a little high for 2 people cut it back to £80 each saving £20)
Home Insurance £20
Water Rates £20
TV Licence £11

Total £866 divided by 2 = £433

Own Expenses

Petrol £100
Car Insurance £55
Social £30 (can she really afford this much for social cut it in half saving £15
Clothing £30 (can she make do with the clothes she has for a while till she gets sorted saving £30)
Car Tax £20
Car (MOT and maintenance) £15
Pension £20
Phone £60 (this is very high - get a pay to go and limit to £10 month saving £50


This would give her an extra £115 per month to throw at her debts

Storm

Can her partner contribute a bit more towards the joint costs for a while? I agree with the areas that MagicMaria has pointed out, the only other ones are to check that she's got the cheapest car insurance, and to see if she can reduce the petrol amount by walking to more places.

She should check to see if she can reclaim any bank charges too - having had £34K of debt and entered into an IVA there's probably quite a few historically.

Definitely I would recommend talking to PayPlan/CCCS - not sure exactly how it works, but she may be able to start a new IVA with them, or they will at least be able to advise her more than the current company she's with by the sound of it.

CLAPTON

the key issue here is her earnings.... is she able to increase her earnings (better job, extra parttime job)
or is her BF willing to pay more.

basically loads of IVAs fail because they either start off not being realistic for 5 years (yes you can cut back on 30 for socialising but for 4 more years?) or they have no flexibily when circumstances change. In any event her budget is if anything unrealistically low rather than too high.


basically, if this is a tempory situation and earnings will improve, then struggling on is worthwhile, but if there is no real prospect of significant improvements then bankruptcy is her best option (i'm asssuming she has no assetts and her job would be unaffected.)

darloboy_2

Hi All

Thanks for your replies, i'll try to do one surmised response rather than individual!

poorbutrich - Thanks for that, i've told her about the OS board, hoping she is able to come over at some point and check it out, as I am fairly sure she could make savings.

charlotte664 - Thanks, I was going to recommend her talking to one or both of those, after I had received some feedback from this board. I personally agree with you, the threat of bankruptcy may force her IVA practicioner to help out a little.

magicmaria - Thanks for the suggestions, i've thrown them at her. The social one is a bit of a rock and a hard place, she is so miserable because of her debts she feels she has to have a bit of money to get out with friends once or twice a month, otherwise she feels there is no point to any of this, and can see no light at the end of it all. The phone has 6 months to go on the contract, which is a bit of a bummer! However her contract level is £40 so worst case i've told her she has to get down to that as a maximum on this.

Storm - I made the same comment to her regarding partner! She feels reluctant to ask for more, as there is some joint bills he pays solely outside of the SOA, and he treats her to nights out during the month as she is usually fed up with her plight. Although they are on roughly the same wage, financially he puts more into the relationship than she does. Luckily he is the sensible one of the two, and has no debt at all. My friend also feels that she doesn't want to pressure her boyfriend for more money because it is her problem and not his, she has been a reckless spender for years, and he has nagged her for years to curb her ways, but she never would listen...!

Clapton - She is not an overly qualified person, and probably earns more where she works than she would get elsewhere. I do think you are correct, her IVA was based upon unrealistic figures, and with 4 years to go this is the predicament she is left in. I don't think it is a temporary situation, and although cuts can definitly be made to her SOA, she would have to make serious cuts just to scrape into the breakeven situation, and that is something of a bare-bones breakeven. With 4 years to go, i'm not sure this is so realistic, as you say.

I guess the big question is, if it were decided that cutbacks were not the answer and further action was, what are the realistic chances of getting an IVA reviewed once you are into it? Do many practicioners (and creditors for that matter), tend to be helpful in these circumstances, or will it be the equivalent of pulling teeth, and bankruptcy is the easier way out (and more practical)?

Thanks guys for your help so far.

Craig