Debt/ IVA/ DMP Confusion & frustration

Sleepy_kitteh

Hello, new to this site, but I need some advice.

I am currently with Payplan and making £140 pm towards my debt, however according to them, it will take my ELVEN years to pay it all back.

So I thought an IVA would be my best option, but after looking into it on here, and IVA is even more confusing than I first thought - I didn't realise that you'd get charged by the company for setting one up.

I have just emailed CCCS a) to see if they can help me reduce my monthly payment or take time off the DMP and b) if they think an IVA really is my best option.

It would be nice to speak to someone who can understand. I got myself in to roughly 27k's worth of debt when I was younger (who gives a 19year old on 11k a yr a credit card with a 7k limit? CAPITAL ONE THAT'S WHO!!). Anyway, it's my own fault and last year I took responsibility about my debt and tried to figure out a way to clear it. I applied for an IVA but got turned down due to putting driving lessons on there, they saw it as a frivolous thing - my argument was how can I get a better job to earn more money to pay you back with if I can't drive. (I have so far failed my test 6 times, but that's another story).

I've just moved in with my boyfriend so I want to be able to set something up that means we can actually start to build a life together, he is aware I am in debt and need an IVA but he's not sure just how much it is.

Also, what happens to student loans with an IVA?

Many thanks, sorry for the long ranty post, I just feel I have no where else left to go.

Xx

Tixy

Hi and welcome

You say you have asked CCCS to see if they can reduce your monthly payment or reduce the length of your DMP. Can you not afford your current repayment of £140 a month? If you have moved in with boyfriend have you done a new income & expenditure (either with payplan or just yourself) to see how you should be able to afford now?
The only way CCCS would be able to reduce the length of your DMP would be if you increase your monthly repayments not decrease them.

You are correct that an IVA has a lot of fees attached - but you don't pay these extra to the agreed monthly payments, you pay them as part of the monthly payments. Because of this if you can only afford £140 or so and your debt is around £27k then I would guess that your creditors may well not agree to an IVA (as the proposed percentage you would repay would be very low). But thats just my opinion based on limited information so certainly discuss it with CCCS as they will be able to look at all your finances.

If you haven't done a new statement of affairs based on now living with boyfriend it might be an idea to do this now - if you did it in this format and posted on here people might be able to suggest areas you can save money / get things cheaper etc so that you could afford to increase your repayment on your DMP. http://www.makesenseofcards.com/soacalc.html

Edit - student loans cannot be included in an IVA.

Sleepy_kitteh

Thank you so much for replying.

My wage has gone up since my original DMP was set up, and I have just re done my budget for PP to show them this increase BUT since moving in with him, my rent/bills etc have gone way up. At home I was paying £200 pm and that was for everything inc food. Were as now I am paying £450 pm for rent/bills for the flat and then there's food and extra travel.

It just feels like that creditors fight you every step of the way, I am trying to pay them back but it feels like I'm going no where. I checked my DMP and what I had paid back over the last year and it's barely made a dint in my debt. It's so frustrating.

Edit: Once my creditors know I am living with my boyfriend, will any of the debt fall to him, do they take his pay into account, only I don't want to burden him with this, it's my mess to clear up, not his.

RAS

At £140 per month, you would repay about £8400 to your creditors on an IVA. Given the fees are about £6000, I doubt many creditors would settle for the deal - which would give them less than 10 percent of the debt oowing.

Tixy

Definitely speak to CCCS then. If you can't afford £140 a month anymore and you finances are not likely to improve in the near future you might want to consider bankrupty even.

You probably already know this - but don't set up a joint bank account with OH now you live together (as if you are financially associated your credit file will affect his ability to get credit etc).

fatbelly

Sleepy_kitteh wrote: »

Edit: Once my creditors know I am living with my boyfriend, will any of the debt fall to him, do they take his pay into account, only I don't want to burden him with this, it's my mess to clear up, not his.

No, it's yours.

If you could post an soa as Tixy indicated, that would help enormously. I'll be looking for how the 27k is made up, and whether the student loan forms part of that.

Sleepy_kitteh

fatbelly wrote: »

No, it's yours.

If you could post an soa as Tixy indicated, that would help enormously. I'll be looking for how the 27k is made up, and whether the student loan forms part of that.

The 27k is made up from credit cards and un secure loans, I tend to keep my student loan separate from those (in my head) but they run at 27k roughly as well, and when I set up my DMP they weren't factored in and if you get and IVA they are not factored in as well.

ATM I am get £1100 in my hand and am spending £450 on rent and bills, £50 on travel, £140 on DMP, £250 on food, so I can afford the repayments and I know they'll probably go up (I have roughly £100 "surplus" pm) which is fine, it's just the length I'm going to have to repay it all in. I thought an IVA would be better but from what you guys have said that's probably a no go.

What about bankruptcy? I know that's a very severe option and it costs £500 but I just can't seem to figure out a way out. I take full responsibility for the debt, I got myself into it, but now it just seems that since I've tried to get out of it or get it sorted I keep hitting a brick wall.

Thanks for the help so far!

fatbelly

Definitely have a look at bankruptcy - there's a bankruptcy & living with it board where it might be best to ask your questions. The fees are potentially £525 plus £175 and you will get an Income Payments Order for 3 years that will take your surplus income. However, if you don't own property or a car or a business it is a better option than an IVA

Whether or not it's the best one, I guess you will have to judge.