25 year DMP! To IVA or not to?

cupcake32

Please give me some advice, and try not to be too harsh. I know we've made a hash of things...I met and married my husband nearly 10 years ago. At the time I had a few thousand pounds of debt and he had about 30 thousand that he had ran up on loans and credits cards with his ex. He stupidly gave her cards in his name and she helped him run them up to their limit. Consequently the debts became 'ours' when we set up home together and we started a DMP with Stepchange. Here we are a decade later with one income (my husbands at 34,000), two children under 4 and no prospect of me going back to work any time soon.
Stepchange have set our affordable repayments at just £80 a month so our estimated debt free date is 2039!
Stupidly we have broken the terms of our DMP and now have a payday loan which bleeds us dry and 3 credit cards. I know how bad that sounds but the further debt was taken on simply to survive not for anything frivolous. Today I was contacted and asked if I'd be interested in an IVA. I think if we were going to go down this route I would first extricate myself from our DMP (as I only owe a very small amount now) and ask Stepchange to set it up in my husbands name. What do you think? Would we be making a mistake to go on to an IVA? Or would it be a mistake not to?
We have no assets, just bags of debt. I really don't mind remaining on the DMP and working towards a debt free date somewhere in the future but the additional debt we now have just to pay the bills and eat is crippling us. Help!

Upsidedown_Bear

Hello

You had some very good advice in your previous thread.
https://forums.moneysavingexpert.com/discussion/comment/59088599#Comment_59088599

Did you change anything/do anything as a result of that?

I would recommend talking to Stepchange (despite the fact you've broken the terms of your DMP) and see what they suggest.They will still be able to help but you need to be honest with them.

Good luck.

ETA
Just read completely through your previous thread and you did speak to Stepchange then and added PDL's to your DMP.
I'm not sure what additional advice anyone can give you now that would different to then.

dancingfairy

So in February 13 you fessed up to Stepchange and added your payday loan into the dmp and renegotiated your dmp payments? What's happened in the meantime? Why have you reached for another payday loan? Either your dmp is not set at a realistic amount or you have had a crisis (such as a car break down or boiler relpacement)? You should have had regular reviews with Stepchange and if you were struggling with the payments then you should have spoken to them and got your payment rearranged.
Frankly an IVA isn't going to help if you can't stick to your budget. Is your budget realistic? Have you got an amount for emergencies in there so that if you were to start again you wouldn't need to go for payday loan?
IF you decide an IVA is the way to go you must make sure your budget is realistic and you must vow not to go near the payday loans and if something drastic happens you must, must talk to your provider.
df

cupcake32

The DMP is set at just 80 a month so is realistic. I don't know how to justify turning to Payday loans again other than to say there is nothing left to live on and we are a couple of douchebags. I really feel like jumping off a bridge today. I think that as long as someone will give us money we will keep taking it and getting in to more and more trouble. The whole situation is a mess and it's all our own fault.

dancingfairy

IS the £80 a month really realistic? Are you actually promising to live off beans on toast and fresh air?
Maybe you need to review your budget?
An IVA will work but obviously your budget needs to work for you.
Have you tried a spending diary to see why things aren't adding up?
It's not ideal but if you can work out why you have fallen off the waggon you can work out how not to in future.
It really is only money at the end of the day so please give Stepchange a call and come up with a new plan. If you feel that you can't bear to talk to stepchange again then you could try doing it with help from your local cab or national debtline but do persevere with it.
Please do get some help.
df

Upsidedown_Bear

cupcake32 wrote: »

The DMP is set at just 80 a month so is realistic. I don't know how to justify turning to Payday loans again other than to say there is nothing left to live on and we are a couple of douchebags. I really feel like jumping off a bridge today. I think that as long as someone will give us money we will keep taking it and getting in to more and more trouble. The whole situation is a mess and it's all our own fault.

This is your problem and what you need to deal with.
Until you do you won't get and stay debt free.

Please, as dancingfairy says get some help. Start with Stepchange.

MSE and the DFW board in particular is a very supportive and helpful place but we can't fix it for you and stop you spending. You need to do that.

SOMam

cupcake32 wrote: »

The DMP is set at just 80 a month so is realistic. I don't know how to justify turning to Payday loans again other than to say there is nothing left to live on and we are a couple of douchebags. I really feel like jumping off a bridge today. I think that as long as someone will give us money we will keep taking it and getting in to more and more trouble. The whole situation is a mess and it's all our own fault.

As already advised the best thing to do is be honest with your DMP provider, If you are struggling then you are struggling and it happens to the best of us. Unfortunately your DMP provider cant read your mind and can't provide advice if they do not know what the situation is.

Do you have a support network at home? Partner? Family? Close Friends? Anyone you can talk to on an emotional level and who can provide support in making financial decisions (remind you that that item you want to buy is a want and not a need)?

cupcake32

The DMP should be doable but this is what happens:
There's no contingency. If we need to break the budget for an unexpected expense it leaves us with nothing. We turn to payday loans and borrow a small amount to see us through to payday, say £50. Then when payday arrives we pay them back and uh-oh! Now we're short again, so borrow more. Classic. We never ever learn.
I think if we go back to Stepchange and tell them the extent of what we've done, breaking arrangement with them TWICE now they'll go mental and end our DMP?
I thought maybe an IVA will help us to get rid of debt bug more importantly not take any more out. That's where the real problem lies I suppose.

sourcrates

cupcake32 wrote: »

The DMP should be doable but this is what happens:
There's no contingency. If we need to break the budget for an unexpected expense it leaves us with nothing. We turn to payday loans and borrow a small amount to see us through to payday, say £50. Then when payday arrives we pay them back and uh-oh! Now we're short again, so borrow more. Classic. We never ever learn.
I think if we go back to Stepchange and tell them the extent of what we've done, breaking arrangement with them TWICE now they'll go mental and end our DMP?
I thought maybe an IVA will help us to get rid of debt bug more importantly not take any more out. That's where the real problem lies I suppose.

Having read your thread, I think you need a different approach to your debts.
My suggestion would be to come out of your DMP, then :


(1) Stop paying your DMP creditors.
(2) Clear your PDL`s.
(3) Save some money for emergencies.
(4) At the same time get some advice and information on your next move, I would say an IVA may be the correct route to take.

But, an IVA is a regulated legal agreement, if you default on it, your creditors could Bankrupt you, you need to curb your spending now, make sure your budget is realistic, take charge of the situation, and move forward, if you don't you will still be in this spiral of debt for years to come.

[Deleted User]

You are correct CC, when I went though a DRO the only glowing positive thing was I wasn't able to get credit as far less favorable so it works, even now it's only 'token but manageable amounts' which I can borrow so yes sometimes a formal solution does work.

However whilst not before time some will say a lot of payday loans co's will be going, especially the ones that can't adhere to the FCA rules so this lending may not be so vibrant much longer, what happens then? would it break the cycle for you?

You do what you have to make life better if you can't make ends meet, take advice on the IVA from a reputable source, life can get better and I hope you do what is right for you x

dancingfairy

Without knowing what the unexpected expenses were it's hard to say but a better bet would have been to pick up the phone to stepchange and ask for their help - could you reduce the payments that month, could you miss it altogether, would you have to add a payment on at the end etc etc. If say the washing machine had broken could you get one from a place that helps people on low income, could you get one on ebay or a second hand shop etc etc. It seems to be the habit of just reaching for credit that's the problem(from what you've said), although having said that, if you've had a genuine emergency you've had a genuine emergency and sometimes it's just unavoidable.
Your budget is pretty tight already (from what you've said) and you don't seem to have any money set aside for emergencies so maybe taking a break for a few months, saving up an emergency fund and reassessing your options would help (basically I agree with sourcrates), you can then decide whether a dmp or IVA would be the best bet.
Generally for a dmp over about 6 years then an IVA makes more sense, although they are a form of insolvency so you should weigh up all the pros and cons properly before jumping into one. The only problem I can see with an IVA is what sort of return the creditors would get over in an IVA. They may decide there's not enough of a return but it's definitely worth considering. Do you own a house or any other assets that might cause an issue?
I think taking a break, a big deep breath and a bit of time to consider your options will help in the long run. You can't undo the past but you can make new/better choices in the future.
Regards
df