Advice on IVAs

Jezza007

Hi all,

Never posted on here before but could do with some sane advice. My wife and i have recently had our working tax credits stopped due to the government raising the threshold. Even though my wife now works part time, it is based on her last years salary when she was working full time. So even though we are worse off now they have put it down. As such we now need to pay the childcare of all 3 of our children whilst we work.

We have debts probably amounting to just under £20k. My wife took out a debt management programme on her debt last year. I have stuck to just transferring debt on to 0% cards and trying to pay this off as i go. Its going down but is quite slow. My wife has suggested taking out an IVA to help ease the burden so we can still manage chilcare costs and afford to live. We own our house and i am afraid that if we take an IVA we could be asked to remortgage and this is something i am very wary of.

I do not like the idea of IVAs and believe as long as we manage our money properly then we can cope, although will have to go without a few things for a while. The other option is that my wife gives up work and stays at home during the day and then gets an evening job to bring in some extra money.

I really need some advice on the best approach on how to go forward on this. Would like to avoid an IVA but if it is the only choice then i may not get that option.

Thanks

Grumpelstiltskin

Jezza Welcome to the DFW board.

First thing you should do is read this.

https://forums.moneysavingexpert.com/discussion/2077631

Is your wife with a fee charging debt management company? If she is then get her to dump them ASAP and go with one of the free ones.

Next you will be advised to put up a SOA so we can see if there is any way you can reduce your outgoings and finally don't jump into anything until you have done all the research you can.

Jezza007

Grumpelstiltskin,

Thanks for the advice. I will read the link sent.

She has said it is fee based. How do we go about changing to a free one and are there any you could reccommend please?

SOA? Guessing this is summary of accounts? Is this debt payments and general household outgoings?

Grumpelstiltskin

You will find details of the free DMP providers in the link I gave you. Your wife needs to read the contract she signed and see what period of notice she needs to give the company, then she needs to give her notice as soon as she can.

SOA Is statement of affairs, you list your income and outgoings then the knowledgeable people on here can suggest how you can cut back to give you more towards paying off your debts and which is the best way forward for you.

Depth_Charge

Hi Jezza

There is also the option of managing your own Debt Management Plan, if you feel comfortable enough, an advantage of this is that it can give you much more flexibilty in the event of any change in circumstances (as has recently happened with you)

As another poster has said if you put up your SOA it will give us more idea on how to help you further.

In the meantime it may be worth having a look at the CCCS and CAB debt remedy / resource links below.

https://debtremedy.cccs.co.uk/start.aspx

http://mymoney.nedcab.org.uk/moneyadvice/

Whichever route you eventually take you need to be absolutely sure that you understand the pro's, cons, implications & risks involved and any payment arragements need to be realistic and sustainable or you may be inviting trouble further down the line.

sistafromanothermista

Depth_Charge wrote: »

https://debtremedy.cccs.co.uk/start.aspx

http://mymoney.nedcab.org.uk/moneyadvice/

.

Brilliant link, just tried it myself and was really helpful.:)

Jezza007

Thank you all for the information so far. Its nice to know we are not the only people struggling at the moment!

I will start to get SOA together and post on here when i have all the information.

sistafromanothermista

Posting the SOA is a good step in the right direction. The debtremedy link also allows you to print off your own debt plan and tells you what options are available and the best course of action to take. All this without having to give any personal details (not even an email address)

Jezza007

Ok. Here we go. Have listed monthly income and outgoings below:

Incomings

Income 1 - £1905.34
Income 2 - £955.56
Child maintenace - £230

Outgoings

Full time childcare - £525
Part time chilcare - £96.80
Mortgage - £349.65
Electric - £32
Gas - £40 (average - pay by quarter)
British gas service - £24.14
Lottery - £9
Council tax - £133
Builings insurance - £18.12
Car insurance - £53.73
Water - £28
Life & critical illness insurance - £27.65
Sofa credit - £49.81
Sky tv, broadband and phone - Av £80
Wastewater - £26.80
Tv license - £12.12
Contents insurance - £17.70
Overdraft payment - £40
Mobile phone 1 - £28
Mobile phone 2 - £43
Kids savings accounts - £15

Cataloge - £160 (total debt £1000)
Debt management - £247 ( total debt approx £11k)
Credit card 1 - £90 (total debt - £3423.54)
Credit card 2 - £50 to 100 (total debt - £1710.15 - 0% till August 12)
Credit card 3 - £45 (total debt - £2557.61 - 0% till May 13)

Any money left goes towards food and petrol etc.

dancingfairy

Hi - does your wife qualify for working tax credit? If she would do and it's just that they have her working full time and she's part time can they base it on her new hours/pay or do you mean she/you don't work enough hours to qualify?
Lottery - 9 pounds (I'm sure this could go).
tv, broadband, phone etc seems quite high at 80 pounds - can you reduce this at all? are you paying extra for multi room or something? can you reduce to less channels and use freeview or something?
Mobile phones -you should be able to save here - there are decent packages for 20 pounds - can you cut back/reduce tariffs at all?
CHildrens savings - hmmm. A tricky one, maybe put it on hold until you are in a better position?
Overdraft payment - is this for charges or how much you usually go over or for 'extra' features or what?

Oh in terms of debt management it should be based on what you can afford to pay so if you can't afford the 247 and have to pay less due to having to eat and pay for petrol then they will have to accept less. Definitely give CCCS or NationalDebtline a ring and swap the dmp over to a free one.
df

katsu

Please use the SOA template so that we can see the totals and have other categories covered.

Jezza007 wrote: »

Ok. Here we go. Have listed monthly income and outgoings below:
How many in household?
Incomings

Income 1 - £1905.34
Income 2 - £955.56
Child maintenace - £230
total in =
Outgoings

Full time childcare - £525
Part time chilcare - £96.80
Mortgage - £349.65
Electric - £32
Gas - £40 (average - pay by quarter) Check your G&E bills. Are they up to date? Are you on the cheapest tariff? Have you now turned central heating off?
British gas service - £24.14 Hmm, check the main site articles to see if you can get this cheaper - over £250 a year spent on this
Lottery - £9 cancel
Council tax - £133 paying over 12 months or 10? which figure is this?
Builings insurance - £18.12
Car insurance - £53.73
Water - £28
Life & critical illness insurance - £27.65 check level of cover? if you both get it through your jobs too, could you drop the level covered separately?
Sofa credit - £49.81 how much longer to pay and at what rate?
Sky tv, broadband and phone - Av £80 reduce the sky package - try a freeview box, check rate for broadband and phone. Cut down calls outside free times (if sky do an inclusive package for calls)
Wastewater - £26.80
Tv license - £12.12
Contents insurance - £17.70
Overdraft payment - £40 what is this? interest charges or reducing what you owe?
Mobile phone 1 - £28
Mobile phone 2 - £43 right - look at either calling to reduce tariff if you are in contract, selling handset, check services that are Sim only prices, you should be able to get these two down to £40 total (or even less depending on usage). Sim only deals for £10 a month give you 300 mins, so how much do you really need?
Kids savings accounts - £15 for now clear the debts instead. If you stopped this and the lottery you would get nearly an extra £300 a year off a debt.

Cataloge - £160 (total debt £1000)
Debt management - £247 ( total debt approx £11k)
Credit card 1 - £90 (total debt - £3423.54) what interest rate?
Credit card 2 - £50 to 100 (total debt - £1710.15 - 0% till August 12)
Credit card 3 - £45 (total debt - £2557.61 - 0% till May 13)
Have you stopped running up debt on the CCs?
Any money left goes towards food and petrol etc.

Yes if you go for IVA I believe remortgaging can be required at the end - check the specialist pages here and forums for advice. Honestly, I thin you need to get a grip of your real spending - what do you spend on food and petrol for eg? Then you know what you need to spend on your living and debt repayments. An IVA is more formal than a DMP and will require you to stick to the repayments, so you need to get a more detailed overview of your incomings and outgoings as part of the process.