Please check / advise on SOA before phone interview with for IVA

Andyph

Evening all,

I am having a phone interview next week to discuss an iva to help solve my debt problem , would be grateful for advice on my SOA to see if i need to add anything / change.

We have a son of 4 and will be having a 2nd child due in july. We have 2 cars at present but the 2nd is only worth £500 as was paid for by my partners dad and he also covers all the running costs so only info for my car is on the SOA.

I'm a bit concerned about Lloyds as i have only had the loan with them for 3 months as used it to consolidate other loans / CC as i was expecting an increase in income but this hasn't happened hence everything has come on top of me.

I am not behind on any payments but i'm just getting further into my £3500 overdraft each month!

Thanks in advance

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1080 ( get paid weekly not monthly)
Partners monthly income after tax....... 0
Benefits................................ 608
Other income............................ 0
Total monthly income.................... 1688

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 660
Management charge (leasehold property).. 0
Council tax............................. 74
Electricity............................. 50
Gas..................................... 40
Oil..................................... 0
Water rates............................. 38
Telephone (land line)................... 15
Mobile phone............................ 45
TV Licence.............................. 12
Satellite/Cable TV...................... 20
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 20
Petrol/diesel........................... 180
Road tax................................ 20
Car Insurance........................... 20
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 23
Pet insurance/vet bills................. 0
Buildings insurance..................... 10
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 0
Holiday................................. 20
Emergency fund.......................... 20
Total monthly expenses.................. 1537


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1100
Other assets............................ 0
Total Assets............................ 1100

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly.. .APR
lloyds tsb loan................11850.....300.......29.8
lloyds tsb CC..................1500......50........27.9
lloyds tsb overdraft...........2000......30........0 not sure
Hailfax CC.....................5400......120.......24.7 just finished 20 months at 0& apr
Total unsecured debts..........20750.....500.......-


Monthly Budget Summary
Total monthly income.................... 1,688
Expenses (including HP & secured debts). 1,537
Available for debt repayments........... 151
Monthly UNsecured debt repayments....... 500
Amount short for making debt repayments. -349

Personal Balance Sheet Summary
Total assets (things you own)........... 1,100
Total HP & Secured debt................. -0
Total Unsecured debt.................... -20,750
Net Assets.............................. -19,650

LydiaJ

Hi Andyph and well done for putting your SOA on the table. I'm sure people who know more than I do will be along soon with some helpful advice. In the meantime, here are a few thoughts.

1) £45 pm for mobile phone is quite a lot. Are you on contract? How soon could you get out of your contract?

2) Why have you got no contents insurance?

3) What do you mean when you say your monthly income is £1080 but you get paid weekly. Do you get £1080 per month but in weekly chunks of about a quarter of this? If so, is there any way you can up your income, or could your partner do some reviews and surveys and stuff while caring for the little ones? If you mean you get £1080 a week, you need to multiply by 4.33 and enter a monthly figure into your SOA.

I hope your interview goes really well, and they are helpful to you. And remember, now you're on here, you can add "Proud to be dealing with my debt" to your sig.

ami66

You've not put down anything for internet Andyph, your clearly using the internet to post here!

Your petrol/diesel is quite high for one vehicle, can you prove the miles travelled to justify that much? My IVA is joint and we run two vehicles on £180 fuel allowance and that's pretty much just travel to and from work plus one grocery shop.

Andyph

hey thanks for the replys.

mobile is for 2 contracts one is £33 a month and cant do much for another 18 months and mine is £10...

the internet is with sky / tv / phone line which is £36 for all of it so have covered this with tv and internet.

as for the diesel fill the car up at least twice a month and thats £150 so put down abit more for trips..

I do have contents insurance so need to add that on,

I take home on average £270, if i times that 4.33 that means that on a standard month when i get paid 4 times i will have less that stated on my soa...

manzanilla

Your SoA shows that you have £151 a month that you pay to an IVA. That is simply not enough I am afraid for an IVA to be agreed by your creditors. In fact it isn't close...

Your groceries and clothes lines are also unrealistically low for you to manage on for the next 5 years. So even if ditch Sky and cut your mobile costs, an IVA is simply a non starter.

In whose names are the debts?

I think you should contact StepChange or Payplan - they can set you up a Debt Management Plan and not charge you - all your money will go to your creditors. Hopefully your creditors will freeze interest so your situation will start to improve slowly.

Then sit back and wait for the littlest one to arrive, and get all the associated benefits sorted out. Use this wbsite turn2us.org.uk to see what you should get. Then after a few months have gone and you are all hopefully getting a bit of sleep, revist your problem. Keep a spending diary for a couple of months so you can come back here and say 'this is what we actually are spending'.

milliemonster

Sorry I disagree with the above, £150 a month is enough for an iva, most companies will now accept a minimum of £100 a month.

Have a look at stepchange guidelines for amounts you can claim in an iva to get your figures right, regardless of what your mobiles are costing, if you are tied into a contract and can prove what your bills are there is o reason they won't be accepted, it may just mean your I and e will need tinkering with.

Having a brief look at your soa, the figures are totally wrong with what you should be claiming in an iva so you do need to speak with someone professional to go through it properly, for instance, £200 a month for 2 adults and 1 child is far too low, you should be allowed around £380. That's just one example.

Fuel is not too high, ours for 2 vehicles is £400 a month and was accepted with no questions asked. Clothing should be around £60 a month, you haven't claimed for hairdressing, Internet, charity, newspapers, meals at work, school meals, emergency house repairs, pocket money, car maintenance etc, this is why you need to speak with the professionals.

An iva is different to a dmp in that you are not trying to scrimp as much as you can to free up money to pay back your creditors, you are trying to set a realistic liveable budget that you can stick to for 5 years, so the allowances are more generous.

It may be when they look at your figures. There just isn't enough left over to do a viable iva, but please don't cut back your figures to the bone to try to create a disposable income to get an iva as that's just heading for disaster

UpToMyNeckInIt

manzanilla wrote: »

Your SoA shows that you have £151 a month that you pay to an IVA. That is simply not enough I am afraid for an IVA to be agreed by your creditors. In fact it isn't close...

Your groceries and clothes lines are also unrealistically low for you to manage on for the next 5 years. So even if ditch Sky and cut your mobile costs, an IVA is simply a non starter.

In whose names are the debts?

I think you should contact StepChange or Payplan - they can set you up a Debt Management Plan and not charge you - all your money will go to your creditors. Hopefully your creditors will freeze interest so your situation will start to improve slowly.

Then sit back and wait for the littlest one to arrive, and get all the associated benefits sorted out. Use this wbsite turn2us.org.uk to see what you should get. Then after a few months have gone and you are all hopefully getting a bit of sleep, revist your problem. Keep a spending diary for a couple of months so you can come back here and say 'this is what we actually are spending'.

Utter nonsense. An IVA is totally viable with c£100-150pcm affordability.

Agree that some of the OP's expenses are unrealistic though.

Stepchange, Payplan et al, are funded by the creditors (whose interests I cynically believe they put before the customer's). Yes, they will happily advise a DMP taking 10-15 Years to repay (as they did for me). ...and please don't make out they offer these services out of the goodness of their hearts, they make their money, by way of formalised 'donations' from the creditors (c11% for Stepchange I understand). Granted, if a customer wants a DMP, they are best placed to do so with one of these organisations. But they will do everything to talk you out of an IVA ('cos it makes less money for their creditor buddies). If they do suggest an IVA, they and the CAB etc, farm it out to 'Grant Thornton' anyway (definitely so for self-employed customers).

UpToMyNeckInIt

Hi Andy,

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

Please consider the ramifications before entering an IVA - speak to a few providers to see if it is the right option for you. Remember: 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.

Go to iva.com, and contact a couple of well-reviewed Insolvency Practitioners. Many don't charge you anything, and their fees would be paid out of your monthly IVA payment (and agreed by your creditors).

By all means seek advice from the ‘charity’ organisations, but don’t be afraid to approach a private firm if they don't think you are eligible for an IVA.

I have a cynical view of the so-called 'independent' charities (Stepchange, National Debtline etc…) - they are all sponsored/funded by the banks/credit companies, and I can't help feeling that was who’s interests they were looking out for when they advised me. They tried pushing me towards a debt management plan (would have taken 10 years to pay off my debt + loads of interest).

Saying all that, I am sure that some private firms will ‘over-sell’ IVA’s to people for whom it may not be the best solution.

You will have to work out your income and expenditure. Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure: All IPs that I’ve come across make reference to the CCCS Budget Guidelines Report 2012. You used to be able to download it, but I cannot find the link any more. If you send me a Private Message, I can email it to you (and anyone else for that matter) if you are interested

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 and subsequently have difficulty. (In your case, you could probably claim a little more in some areas, bringing your affordability down to the £100 mark, and still be viable for an IVA.

What's more, in 5 Years time, the rest of the debt is written off.

Bank Accounts: If you still are in the pre-approval stage, and 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 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.

Most IP's reckon on a 96-99% IVA-acceptance rate. After all they don't want to go to the time/effort in putting together an IVA proposal, unless they are reasonably certain of creditor approval (they don't get paid otherwise).

Glad I went the IVA route in the end - can now sleep at night, Hope you get back on track financially soon as well.

Just my opinion though.

UpToMyNeckInIt

...just another thought: Might bankruptcy be a viable option for you Andy? You don't appear to have substantial personal assets, and providing you are not in a job that specifically requires you NOT to go bankrupt, it is worthy of consideration.

That way it's done and dusted either immediately, or over a 3 Year period (I'm no expert though, might be something CAB can advise on).

Good luck.

Depth_Charge

Hi

Well at least someone has finally now mentioned that bankruptcy may at least be an opition worth some consideration (maybe the O/P have their reasons not to pursue B/R)

Being honest, I have to say that there has been some strange advice / guidence given too date via this thread.

Manzanilla, some of the stuff you have put up here and on another thread has me scratching my head to say the least Im afraid to say. (I will elaborate if you wish)

UTMNIII once again makes assumptions and some interesting comments about the CAB. He also mentions that they may be able to help with bankruptcy which they no doubt could. A fair question might be why not ask the companies on the other forum he keeps mentioning - surely they can advise & do bankruptcy, help filling in the forms, maybe apply to a charity fior the fees, help at court, help checking benefit entitlement, support the client in the event of any issues / problems with the O/R post bankruptcy. And all for free - thats if you believe in the good fairy at the bottom of garden of course:) I will stand corrected though if proven wrong.

O/P if you dont mind me asking - who is your telephone call with and how have you got to the stage where an IVA is being discussed.

My take as always

UpToMyNeckInIt

Depth_Charge wrote: »

UTMNIII once again makes assumptions and some interesting comments about the CAB. He also mentions that they may be able to help with bankruptcy which they no doubt could. A fair question might be why not ask the companies on the other forum he keeps mentioning - surely they can advise & do bankruptcy, help filling in the forms, maybe apply to a charity fior the fees, help at court, help checking benefit entitlement, support the client in the event of any issues / problems with the O/R post bankruptcy. And all for free - thats if you believe in the good fairy at the bottom of garden of course:) I will stand corrected though if proven wrong.

...Not sure it is a fair question to ask a private company to assist with BR. Many gladly will, I'm sure - for a fee. That's crazy: Why do that, when CAB/debt charities will offer a service for free? No fairies required!!! In a roundabout way, this is the advice from private companies over various threads on another forum.

BR was never a consideration for me personally, but I understand that it the forms etc. can be filled in by the customer (easier said than done without professional support though I bet).