Help IVA/DMP?

dipsy

right I have got myself in a right mess

I owe about 31k all unsecured, little or no equity in my house (only in my name)

I have contacted stepchange who have suggested banktrupcy, but I am not sure what to do, I would lose my home :-(

I want to pay but need to try and work out how I can sort this out, I do have another account where I could switch my wages to and my d/debits so all of that would be covered,

I have an o/d with my current bank obviously I will need to move my salary ASAP & D/d otherwise I will end up with them withdrawing the o/draft potentially and then none of my mortgage etc would be covered

I am sat here sweating, can't eat/sleep function..... someone please offer me some advice... If I do IVA will I lose my home, is that the best thing to do, does everyone charge for an IVA?

DMP in everyones experience will they freeze the interest and let me chip away at the capitol?

god I am so stressed :-( any advice would be welcomed

Depth_Charge

dipsy wrote: »

right I have got myself in a right mess

I owe about 31k all unsecured, little or no equity in my house (only in my name)

I have contacted stepchange who have suggested banktrupcy, but I am not sure what to do, I would lose my home :-(

I want to pay but need to try and work out how I can sort this out, I do have another account where I could switch my wages to and my d/debits so all of that would be covered,

I have an o/d with my current bank obviously I will need to move my salary ASAP & D/d otherwise I will end up with them withdrawing the o/draft potentially and then none of my mortgage etc would be covered

I am sat here sweating, can't eat/sleep function..... someone please offer me some advice... If I do IVA will I lose my home, is that the best thing to do, does everyone charge for an IVA?

DMP in everyones experience will they freeze the interest and let me chip away at the capitol?

god I am so stressed :-( any advice would be welcomed

Hi

Hard to guide you further without knowing your full circumstances.

As Stepchange have advised bankruptcy what answers have they given to the questions you have asked here?

Maybe have a look through the Citizens Advice Debt Remedy resource / tool or give National Debtline a call

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

Have you any disposable income?

Could you put up your SOA?

cheesedoffwithdebt

Yes it's hard to say what is best for you without knowing more.

Bankruptcy would mean ultimately that your house would have to be sold quite likely once the value has increased enough, so probably not immediately. What is needed is a look at your income and outgoings, as an IVA would certainly help to save your property, but having said that, I realise now that whilst bankruptcy is quite drastic, that you then have a completely clean slate afterwards, and faster than other ways of dealing with debt.

I am in an IVA and half way through- it's shorter than a DMP would have been, but I so long for it to be over now because the cost of living continues to rise and it's quite hard living on a tight budget for a prolonged period. BUt an IVA was best for me and was my choice I hasten to add.

I do know the feeling of wanting to pay everything off but sometimes that is just not possible- and that for some can be a tough reality to face.

Your hurdle right now I think is accepting the reality that if you cannot pay off everything now there are only a few possible choices open sadly.

Post again with more details and I am sure there will be lots of people who can add helpful comments.

dipsy

ok here we go

I have 1478 and 193.05 coming in each month

I hav £961.63 s/o for gas/elec/mortgage/council tax /life insurance/car insurance/payment to partner for daughter £120

I have allowed as follows
car serv £30
Road tax £25
Fuel £130
food/toiltetries etc £200
Pet food £7
Hair dressing £10
Clothing £20
Emergency £10


Leaves £157.42

I owe approx 32k

would I be allowed to do an IVA?#

I have a car worth about 2k and there is no equity currently in my home.....

I have opened up a coop cash minder account yesterday I should get the account number tomorrow

currently I have no missed payments at all on any of my unsecured debt

any help would be most welcomed

Many thanks in advance

UpToMyNeckInIt

Hi Dipsy,

Those figures sound viable for an IVA - IF you feel that is the way to go.

I assume that you have exhausted more conventional solutions eg: a debt consolodation loan. This would be the least damaging to your credit file.

A DMP does not seem viable with your disposable income vs debt.

This is purely my opinion, speaking as an IVA customer:

You are right to thoroughly research the subject of IVAs. Please consider the ramifications before entering one - speak to a few providers to see if it is the right option for you. Remember, just like bankruptcy, it is a form of insolvency, which in turn puts all sorts of restrictions on everything from the ability to open a bank account, or even get a mobile phone on contract.

I only went down the IVA route as I had no real option after an unexpected change in financial circumstances. That said, I am 9 Months in, and can sleep at night not worrying about debt.

Google ‘insolvency practitioner reviews’ and contact a couple of well-reviewed Insolvency Practitioners. Contrary to what some might have you believe, many don't charge you anything, and their fees would be paid out of your monthly IVA payment (and agreed by your creditors). In fact, even charity organisations such as 'Stepchange' farm out many of their IVA customers to Grant Thornton.

Google ‘Straightforward Consumer IVA protocol’ which the vast majority of new IVAs are compliant with, much of which will form the basis, word-for-word of you IVA agreement. This should direct you to a link to download the pdf document. Well worth a read.

Similarly, you will have to work out your income and expenditure. Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure, google: ‘CCCS Budget Guidelines Report 2011’. All IPs that I’ve come across make reference to this. Download the pdf.

(There is a newer version, but I cannot find a link to download it. I believe the 2011 document was effective from October 2011, and used in my IVA implemented in August 2012).

However, even if the figures are a little off, it is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc if so required.

If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure (in the mistaken belief that their IVA will more likely be accepted), and subsequently have difficulty from day one. Don't fall into that trap.

Equity release (if applicable): Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage / secured loan up to 85% LTV to increase creditor dividend up to 100p in the £. (Subject to the resulting payment being max. 50% of you current IVA payment for affordability reasons). For most, equity release is not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper). But who knows what the economic climate will be like in 4-5 Years time?

Bank Accounts: If any of your debts are with your existing bank, you need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA though (no requirement to volunteer such information).

Important to do this before you are on the insolvency register, as you will then probably be limited to a handful of basic accounts.

DO NOT switch to HSBC/First Direct: when they find you on the insolvency register, (which they will), they will make you close your account.

Enough for starters!!!

Good luck with whatever you decide to do.

dipsy

Thank you for the long and most useful reply

Can I ask, if I have a current account with Halifax, does have an o/d but I can remove this and hand the cheque book back in

can I use this account?

I have opened up a co-op cash minder account and should have the account details later today.

presently I am behind with nothing, am I best to transfer all my d/d to co-op ASAP i.e. utilities, mortgage, insurances etc

cancel the d/d from my exisiting bank and the d/d to the creditiors, i.e. my c/card loan etc?

how much notice do people/companies need to change d/d? does anyone know

What are the chances of my being accepted on an IVA - for what reason would they turn me down?

I can't sleep at all, been laying looking at the ceiling for days.

plus side is I have lost weight through stress lol

UpToMyNeckInIt

Assuming you have no other creditors that are part of the Halifax, or part of the HBOS group, and that the account is not overdrawn when you enter the IVA, you should be OK keeping the account. (Personally, I would not hand back the cheque book - there is no requirement of an IVA preventing you from having one). Also I suggest reducing the o/d limit to £500, as most protocol IVA's allow you to obtain £500 credit over and above for utilities, phone etc). Useful to have a buffer for emergencies, or if a direct debit comes out a day early, and/or you forget about a debit card transaction etc.

Most IP's reckon that IVA proposals go through 95-99% of the time. There are one or two obstinate creditors: Anecdotally, I've heard Northern Rock and HMRC can be awkward, imposing unusual conditions, such as an extra Year on the IVA to increase their return.

Who are your creditors? I'll let you know if I have heard of any problems with them.

I too remember the sleepless nights - especially whilst waiting for the creditor's meeting.

Good luck.

dipsy

Hi thanks again, you have been so helpful

The creditors are as follows

Post office c/c - Bank of Ireland I believe
Natwest o/d and loan
MBNA c/c
Barclays c/c

my halifax is one I have had for about 18 years and it only has a £100 o/d on it, but I never use it


Many thanks again for all your help

FiatFan_2

Hi dipsy,

I believe MBNA is Bank of America, Natwest is RBS and Barclays is themselves so I would suspect your good to keep your HBOS account. OD would be good for emergencies and cheques still have there limited place nowadays, we've not got one but would have been handy on occasion (school payments for instance).

UpToMyNeckInIt always posts good advice so I haven't fully read what's been said, but as your currently upto date with all your payments and exploring an iva, it's not uncommon for some people to start offering token payments and saving the difference as an emergency pot for starting off the iva. Unfortunately I wasn't savvy enough to do this and it was a little bit of a struggle over Christmas but don't regret entering an iva as it was the right choice for us.

If you choose a reputable IP then they'll usually only go to the creditors once they have an offer that they feel is acceptable, doesn't do them any good going forward with a poor offer.

dipsy

Hi thanks everyone you are being most helpful

right here is what I have done so far

opened new account

transfered all my d/d to new account less the ones for the cards and loan

I haven't cancelled them off my old account yet, they aren't due out till May as I have everything come out in first week of the month.

My salary is too late to put into new account so when it goes in on Wednesday I will transfer it all out into new account to cover the d/d

then I will cancel all the d/d inc the card/loan ones, I just didn't want natwest to think something odd going on as all the d/d were cancelled if you get my drift

I will then ring each of the companies c/cards and loan etc and explain to them the situation - yes no?

The I will apply for the IVA - I have been in touch with IVA company and they say I should be ok..

anything I have missed/should be doing/shouldn't be doing?

I also need to have a repair done on my car, would I be foolish to put this on my card as it stands no one knows anything as of yet and all payments are up to date?

many thanks again for all your help with this

ps just spoken to a friend who has scared the life out of me, she tells me I will loose my house on an IVA

I thought you kept your house but were expected, should there be any, to release the equity in say month 54(ish) of the arrangement.... can anyone advise

Many thanks

UpToMyNeckInIt

I understand where you are coming from re: NatWest. Don't tell them about your IVA until you have transferred your salary to your new account. If you do, they may freeze your account, and swallow any monies paid in!!!

As FiatFan says, Natwest is/was RBS. So I'm not sure if they were ever affiliated with HBOS. DO your research, as this may endanger funds in the Halifax account if they were!!!

Personally, when I was at the stage you are at, I just stopped paying my creditors altogether, apart from making the minimum overdraft repayment to keep my bank account open. Furthermore, I withdrew all the cash I physically could (to build up a contingency fund - very important in my opinion, as you will have little opportunity to save money in the initial stages of the IVA), and maxed out all my accounts (they were all included in the IVA).

When your creditors phone you (about a week after your overdue payment), just tell them you are applying for an IVA. They will usually then put a hold on your account for 30 days. At this point, your accounts will be frozen. (Now you see the need for that cash!!!). You should by then have your new bank accounts up 'n' running, so should be OK.

Then I'm afraid it's the worst part - a nervous waiting game for the creditor's meeting. After which you will then (hopefully) have your IVA in place.

I think your list of creditors should be OK. I too had debts with Barclays (voted in favour of the IVA), and MBNA (did not bother to vote, despite me having £13K on a credit card of theirs, and more than 1/3 of my total debt!!!).

Cannot speak for NatWest and PO.

Keep us posted with how it all goes.