Is an IVA too extreme for £5000 of debt? Please help!

boleyn1536

Dear MSE community

Newbie here, I wonder if you can help me. Needless to say I am bad with money and have got myself into a right pickle. Please don't shout at me :eek:

I have bank loans and an overdraft which, although a pain, I can manage with each month. My problem is, a couple of years ago I got into a terrible endless cycle of high st pay day loans (yes, plural) and sadly following Christmas I can no longer do the juggling act between them as I have been doing for months on end. It's way out of control now.

I recently applied for (another) bank loan in the hope of clearing these pay day loans once and for all but not surprisingly I was rejected. My friend advised getting a credit card to pay off the pay day loans as the rate of interest would be less. Barclaycard approved me for £400 but I've since discovered you can't use a credit card to pay off pay day loans. Until December I'd never had a credit card in my life, although in hindsight I realise it would have been a much more sensible way to borrow rather than taking these awful pay day loans out.

A friend has suggested an IVA ... and I wonder if you can tell me, is this a drastic measure or exactly what I need? The total debts (including bank loans/overdraft) is a little under £5000. The person who recommended the IVA was £35,000 in debt and someone else she knows was £70,000. Would an IVA be too extreme a measure for me?

Finally - would it be best for me to find a way of clearing JUST the pay day loans or would it be more sensible to find a way to clear ALL debts (including bank loans and overdraft)?

Thanks for reading, your advice will be gratefully received.

National_Debtline

Hi there

Welcome to the forum.

We can safely say an IVA isn't the right fit for someone with your level of debt; no need to explain why at length, but suffice to say it's aimed at people whose debt is so large there's no realistic prospect of paying it off in full.

We suggest that you post a Statement of Affairs (SoA) on here and then it'll be easier to assess which options are more suited to you. There's a link to a template SoA you will find on plenty of these threads.

To answer your final query - you should definitely, absolutely deal with ALL of the credit debts at the same time, rather than paying off some and not others.

One piece of specific advice for now - please ensure that you have opened a bank account - ideally a basic, credit-only one - with a bank you owe no debts to.

Regards

Dennis @NDL