IVA & debt help needed!!!

tornadobunches

Hello all,

My first posting, and need lots of advice so hear goes.

I’ve amassed a massive amount of debt, huge in fact, in the forms of loans and credit cards. I’ve never defaulted, missed payments and have just got copied of my credit files from the main credit scoring companies and apart from the amount of debt are in good health.

Without going into huge detail. The initial problems started 4 or 5 years back, when
I had to pack up a business I was running as it wasn’t working. The process up to beginning that, and then running it, and the subsequent fall out from stopping it, and then getting something else going up to where I am now is what the resultant debt is. Along the way, there was the fatal, borrow more to cover debts, and consolidating debts, and then getting more debt, just a vicious circle.

I am self-employed, and now for the first time in my life actually income wise in a good situation, but the debt is crippling me, and I am now in a situation where the debt payments and my rent/bills etc are more than my monthly income, the worst of situations!

I am considering an IVA. My main worries are the following points:

One of the loans I have, is also in joint names with my wife. The majority of the loan was used for my need, but obviously both our names are down. What implications would getting and IVA have for her? As the debt in question, that’s all my personal credit debt and the majority of this loan debt, is my responsibility and I don’t want to implicate her or draw her into the process, and thus affecting her income, credit rating etc? I can’t transfer the balance into a separate loan in my name as I am refused credit. Is there some way of leaving her out of this or getting around this?

An IVA lasts for 5 years. Is this then deleted off your Credit File after this, with no firther implications?

Can you get a mortgage whilst you have an IVA? Does anyone know who offers this, and what the implications of having an IVA are on getting a mortgage?

Can anyone recommend an IVA company? What are the IVA charges I have heard much about? They sound enormous, do you have to come up with the fee up front, or is this included in the monthly payments?

Lots more questions, but for now can anyone help on any of this?! Would be so grateful!

Thank you all!!

CLAPTON

best to post your full SOA .. i.e. income , spending and all the debts

for the debts say which are in sole names and which in joint names
also add a little about your circumstances ..OH/ children etc.

Only then is it possible to say whether an IVA is suitable or even possible for you.

also do you rent or buying ..if buying what is the value of the house and mortgage?

on your questions

joint debts mean you are both responsible for the debt.. there is no way you can leave out your wife i'm afraid unless you clear the debt.

an IVA stays on your credit file for 6 years from its start

it is possible to get a mortgage on a IVA although you may pay over the odds in interest. Also your creditors might be interested in any equity in the house.

although IVAs are expensive, you usually simply pay a monthly amount and the IR fees come out of that... do NOT pay anything up front.

In the first instance i'm suggest you contact CCCS or Payplan and get some advice.

but post your SOA and we'll be better able to help

tornadobunches

Thankyou for your reply. We rent our flat at the moment.

This is the SOA:

Money in per month on average over last two years is £1,550.

Creditors:
Intelligient Finance Credit Card : £3886.29
Hsbc Loan £11,318.02 outstanding balance
Egg Credit Card: £3,466.63
Hsbc Credit Card: £6,988,68
Barclaycard Credit Card: £1,458.42
Mint Credit Card: £5,987.00
Nationwide Joint Loan: £13.835.00 outstanding balance
First Direct Current Account: -£490

Monthly expenses - household rent/bills split between myself and my wife, so these are half the amounts, and so the amounts I pay myself:

Rent £412.00
Council Tax: £55.00
Electric: £10.00
Gas: 310.00
Phone: £35.00
Contents Ins: £3.25
Water: £12.50
TV Licence:£5.00
Food: £100
General Household:£50


Other expenses - full amount on average per month:
Diesel £120
Other car expenses - tax, servicing, insurance etc - allow £40

Enormous as you can see! My Payments out far exceed my payments in due to the debt crisis! Can you get an IVA if your money out exceeds your money in? Obviously if an IVA was granted and therefore monthly payments reduced I could afford the IVA payment. Any problems being self- employed and getting an IVA that you know of?

Thanks so much...don't know what to do!!

Joek_2

Hi.

I agree with CLAPTON - give CCCS or Payplan a call. They're great and can make a dire situation much, much better.

I'm on a similar level of debt to you, but I'm now not worried about things at all - I know exactly what I've got a month and I'm sticking rigidly to the budgets given.

And the best part is that it's free for them, and if you go on a DMP with them, they sort it all out for you.

CLAPTON

getting the SOA right is quite difficult but very important because if you enter a IVA or DMP plan you have to live with the budget for five years.
What seems fine for this week / month may not seem so good after a year.

so sorry about all the questions but it all helps to see the complete picture

so some things:

a. on the debts can you edit your post to add to each debt the monthly minimum payment and the APR

b. can you add a line giving the total debt

c. add a line giving total monthly minimum payment

on the spending :

d. do you mean gas at 310? or is it a typo?

e. remember we are taking a budget that you live on for five years... do you spend anything on clothes, socialising, xmas, presents, optical/medical/dental, modest holiday
I'm not saying that your creditors will accept all these things in an IVA but you need to think carefully about the budget.

f. how steady is your income.. there is nothing stopping someone self employed entering a IVA but you are committed to paying each and every month so if your income varies this could be a problem.

tornadobunches

Here’s amended details...thanks

Creditors:
Intelligient Finance Credit Card : £3886.29
Monthly payment: £76.89 APR:22.9% Cash 12.9% Purchases[/B][/B][/I]
Pay on average £40 interest per month
Hsbc Loan £11,318.02 outstanding balance
Monthly Payment: £230.95 APR 10.9%
Egg Credit Card: £3,466.63
Monthly Payment: £72.16 APR:22.47% Cash £21.9% purchases
Pay on average £ £56.99 per month
Hsbc Credit Card: £6,988,68
Monthly Payment: £209.00 APR: 20.05% Cash 15.75% Purchases
Pay on average £92.83 interest per month
Barclaycard Credit Card: £1,458.42
Monthly Payment: £37.00 APR: 27.9% Cash 24.9% Purchases
Pay on average £30 interest per month
Mint Credit Card: £5,987.00
Monthly Payment: £134 APR: 22.47% Cash £24.9% Purchases
Pay on average £92 interest per month
Nationwide Joint Loan: £13.835.00 outstanding balance
Monthly Payment: £392.00 (of which I pay £323 and my wife the remainder)
APR: 6.7%
First Direct Current Account: -£490
Remains Static

Total debt: £47,430.04

Pay in interest on credit cards alone £311.82 per month!!

As mentioned, I am unable to transfer balances into cheaper/no interest cards etc as every credit check results in a refusal. I even tried to transfer my Egg card balance to an Egg card loan for the same amount, to try and pay it off with less interest but was refused when they credit checked me.

Monthly expenses - household rent/bills split between myself and my wife, so these are half the amounts, and so the amounts I pay myself:

Rent £412.00
Council Tax: £55.00
Electric: £10.00
Gas: £10.00 ( sorry typo not 310 per month on gas!!)
Phone: £35.00
Contents Ins: £3.25
Water: £12.50
TV Licence:£5.00
Food: £100
General Household:£50


Other expenses - full amount on average per month:
Diesel £120
Other car expenses - tax, servicing, insurance etc - allow £40

And adding additional expenses – clothes, dental, xmas, modest holiday, socialising etc as you mention, I suppose you could add £120 per month...£30 per week?

tornadobunches

Looked at Payplan website...they seem to be a good company to speak to...thankyou for that!

tornadobunches

Hello!

Thank you for your reply! Just couple of questions...

You say you had a similar level of debt to me and got a DMP sorted with Payplan. I am looking at a IVA cause I thought that my level of debt wouldn't allow me to sort a DMP as it would take me years and years to pay the full amounts back even without interest - my total debt is £45,000ish.

If this is possible as you say, what benefits would you say a DMP has over an IVA? and minuses? How did the process start, what happened and how long did it all take? Any problems?

Thanks for this...any advice welcome!

Joek_2

I think the decision to go either for a DMP or an IVA is pretty much subject to how much income remains after you take out the money for you essential outgoings (i.e - utility bills, insurance, phone etc).

My CCCS councillor recommended an IVA for me, because I had roughly £350 a month to 'spare'. However, I decided on going the DMP route with the option to review this after 6 months to a year.

Why? Mainly because I didn't want to welch out on deal primarily - I got myself into this debt, and in an ideal world, I'd like to pay off as full an amount as possible.

Also, setting up an IVA does entail a cost, plus another separate company to go through the details.

I was very keen to let CCCS sort the DMP out for me, and for me to pay them a month.

Admittedly, there are days when I think an IVA would probably have been a better idea (I've yet to have the phonecalls all the time, but on a DMP I'm expecting it. With an IVA, you're contracters are legally obligated to stop all that and if accepted, then that's that!).

At the end of the day, my credit rating is shot to pieces, and I'll be very lucky to get any credit or loan...precisely what I wanted to happen. I don't want either of them anymore!!!

Speak to them and see what they suggest - as I said earlier, you've got nothing to lose by it, and the piece of mind you get from really starting on a path to being debt-free is something really, really great!

CLAPTON

the way i see it


your income is 1550

your spending is 972 before any debt repayment

leaving 577 to pay debts off

your current minimum payments are
for your sole debts 815
and the joint debt 392
totalling 1206

now the problem is the joint debt. If you default on the debt (i.e. either IVA or DMP) then they can demand repayment from your wife.

so if you exclude the joint loan from the IVA then the figures look like

your spending now is 972 + 323 = 1295
leaving 254 per month for the debts of 33,000

assuming IR costs of around 8,000 this only gives a return of about 22% which is unlikely to be accepted.

if you could find another 100 per month then the return rises to about 40 % which is much more likely to be accepted.

the alternative is to consider bankruptcy although this would still leave the problem of the joint debt.