IVA and unable to afford it

kayleigh_b69

Hi just looking for a bit of help and advice, im currently in an IVA which started in Sep 2013 so still very new however we are finding it harder and harder to afford the monthly payments.
what options do we have ? can we have a payment holiday ? can the amount we pay be reduced or are we better asking to be made bankrupt and if so what does this entail.

Very new to all this and dont think we researched the IVA properly before entering into it we were just in a bad place and needed to stop the creditors hounding us

any help or info is greatly appreciated

Foxy-Stoat_3

Has anything happened in the last few months, unexpected bills or pay decrease?

At the start of your IVA you filled out an expenditure form, whats changed or have you under estimated monthly bills?

kayleigh_b69

i think we have under estimated - i currently pay £361 a month in total to the IVA and with the cost of every day living i just feel like we are struggling.

my husbands petrol cost is crippling us at around £450 a month just for travel to and from work

we havent had any unexpected things happen to us but im panicking as our car tax and MOT is due the car is probally going to fail and im thinking how are we going to pay for this - i know i should be putting money away each month but thats eaiser said than done when i have a 17 month old always requiring things.

Looking back i dont think the IVA was the right thing for us but i couldnt see any other way out

Foxy-Stoat_3

If you under estimated the travelling costs you should talk to your IP and see if you can arrange a variation meeting. Its in the interests of the IP not to fail your IVA.

On a side note, what were the alternatives, assuming you have made all the life changing budgeting you can?

How many times does your gross salary go into your debt?

kayleigh_b69

i think the gross salary covers the debt twice or just more than twice

the thought of this for another 4 years is heartbreaking i dont see how i can cut down any more than i have which is why i was enquiring what would happen if it failed and we went bankrupt - i dont even know if this is a option

Foxy-Stoat_3

Crikey, my debt was over double what my gross salary was....IVA was a good option.

If your debt is half of your gross salary then you should be able to budget and manage it...unless the interest rates are very high. But you are where you are now.

If your going to fail the IVA just because of petrol, tax and running costs for your other half's car then could you not manage these by down sizing (if possible) or choosing a more economical car?

How many miles does he do a month?

Maybe post up your living costs to see if theres anything that can go.

Foxy-Stoat_3

You can fail the IVA and go BR, this may have far reaching complications with employment and bank accounts though so I would try and manage it as best you can.

Do you use an excel spreadsheet with your monthly bills and how strict are you with your monthly budget?

kayleigh_b69

I put that the wrong way - my debts were more than twice my annual wage

Foxy-Stoat_3

kayleigh_b69 wrote: »

I put that the wrong way - my debts were more than twice my annual wage

That's better !

kayleigh_b69

My debts were 25k and I'm paying £361 a month - I'm really strict with my budget each month for food shopping etc to the point I'm desperate for new work trousers and shoes and just don't have the money for it

We owe a family member £1300 which we are paying back as well but the debt company said this couldn't be included in our budget so we are having to scrape that money together each month as well

I honestly don't see how I can keep this up for 4 years

UpToMyNeckInIt

As you say, it sounds like you have under-estimated your expenditure.

I wonder if you have made full use of all your living allowances?

Have a look at the Stepchange Budget Guidelines Report here:

https://docs.google.com/file/d/0B7LabJy69BP1M0gxeHQ1SDFiN1E/edit?pli=1

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 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.

Alternatively, have a look at going BR: The only reason as far as I am concerned, for opting for an IVA over BR is if you have assets to protect - ie: a house, or if going BR could impact your job.

With going BR, your absolute worst case scenario is a 3-Year IPA. To save for the £750 BR fee, just stop IVA payments.

Saying that, it is best not to make snap decisions on such matters, but to instead carefully consider all options. So it is also worth checking out the 'Debt Camel' website here:

http://debtcamel.co.uk/debt-options/

It puts your different options to you without any jargon.

Hope you get sorted out soon. Good luck.