should we go for a IVA?

tsotd

Hi

My partner and I are in a lot of money trouble.
We have a mortgage, a home owner loan, a large number of credit cards, store cards and personal loans. It’s now got to the point where we have more outgoing than incoming.
To give you some idea I was paid on Friday £970, and my partner £1400, after paying the mortgage/loans/cards we where left with £95 to last us the month which is just not possible so we end up living off cards which makes things worse.
We are looking into the best way of trying to sort out this problem and the best solutions would be an IVA or going bankrupt.
We are worried that if we go bankrupt we would lose the house as there is no equity in it.
We are planning on phoning some IVA companies today to get some information and to find out if we can pay back the monthly asking.
Would an IVA be best for us so that there is less of a chance of use losing the house? Is there a chance that if we went bankrupt we could keep the house?

Thanks for any help

Eager_Elephant

Hi tsotd,

Can you post a SOA so we can see your situation, list all your main bills in the top section and then list all debts underneath. The homeowner loan should be up under the mortgage payment.

I don't think you can rule any options out yet and without seeing your SOA I can't give any advice.

The one thing I would say is that you don't always lose your house in bankruptcy. If there is no equity at all the Official Receiver should let a family member buy the equity for a nominal sum.

The problems with IVA's are that you have to stick to a strict budget for 5 years. 5 years is a long time and anything can happen, it sounds like you and your partner are quite young, what would happen if you fell pregnant.
Sometimes it is better to go bankrupt unless you have specific jobs than try to do an IVA and in year 4 fail the payments because one of you lost your job and then you could be made bankrupt anyway.

EE

tsotd

sorry, whats a SOA?

fermi

Before you phone an IVA company please talk to one of the free national debt advice charities.

[SIZE=-1]They never make a penny from the advice they give, which means it will be given with only your best interests at heart.[/SIZE][SIZE=-1]

You can contact: [/SIZE]

• [SIZE=-1]The Consumer Credit Counselling Service (CCCS) - Tel: 0800 138 1111 [/SIZE]
• [SIZE=-1]National Debtline - Tel: 0808 808 4000 [/SIZE]
• [SIZE=-1]Payplan - Tel: 0800 917 7823.[/SIZE]
• [SIZE=-1] Your local CAB Office and ask to speak to a 'money advisor'.[/SIZE]

Remember the commercial IVA companies that advertise on TV and in the press stand to make a large fat fee if they can get you on to an IVA, so their advice is hardly likely to be unbiased.

The agencies above will go through all your options with you and help you work out which suits you best. Should an IVA be deemed appropriate then some can even start the ball rolling (payplan I think).

Good luck, and make sure that you get the best unbiased advice possible.

Eager_Elephant

Sorry a SOA is a statement of affairs basically a list of incomings and outgoings.

I do agree with the above by fermi but sometimes you have to wait a week or so for an appt to speak to them. In the meantime we can offer our opinions on them so at least you will know the questions to ask whoever you go to for help.

EE

fermi

Please also be aware that if you should decide on bankruptcy, one of the few questions you will be asked by the judge before an order will be granted is "Have you sought professional advice?". The organisations mentioned above are acceptable for that advice.

You can read about the consequences for your home in bankruptcy here:

What will happen to my home?

Plus lots more info on the Insolvency Service Website.

But in short it is possible in many cases to purchase a zero or very small equity for £1 plus solicitors fees.

How to prepare an SOA for the DFW board is give here:

http://forums.moneysavingexpert.com/showthread.html?t=107280

While there is a separate forum on bankruptcy here:

http://forums.moneysavingexpert.com/forumdisplay.html?f=136

tsotd

Monthly Incomings:

My salary - £988 (based on last payslip)
Partners salary - £1320


Total - £2,308

Monthly Outgoings:

Mortgage - £581
home owner loan - £850 (first plus)
Council Tax - £138
Gas - £33
Electric - £30
tv - £34
sky - £21
Phone - £11
her moble - £59
my moble - £40
her Car Insurance - £40
my car insurance - £60
house insurance - £22
internet - £10
her credit card - £30 (abbey)
her store card - £20 (new look)
her credit card - £30 (tesco)
my credit card - £50 (abbey)
her store card - £20
my credit card - £145 (halifax)
my credit card - £250 (virgin)
my credit card - £10 (natwest)
her credit card - £90 (natwest)
her store card - £29 (debenhams)
her store card - £130 (dorthy perkins)
her credit card - £49 (mint)
my credit card - £170 (marbles)
my personal loan - £150 (natwest)

Total: £3.022


i know ive missed some bits off as i cant find the bills at the moment and i know she has more cards but she hides them.
i have not included food/fuel/clothing etc..

fermi

The people here on DFW are fantastic at picking apart budgets/SOA's and suggesting steps that you can take to make them look better. Although it is obvious that the priority is surviving until a more permanent solution is found at the moment.

You might want to add the extra info suggested at: http://forums.moneysavingexpert.com/showthread.html?t=107280 to make the picture more complete, if you can easily prepare the figures.

Another place for excellent advice where there are separate forums for 'general debt', IVA's and Bankruptcy is:

http://www.debtquestions.co.uk/debt_forum/

BrandNewDay

The most important thing to focus on - the thing you need to worry about more than your credit score or even your house - is your marriage. You said "She has more cards and she hides them." You won't be able to do anything until you are communicating openly and honestly with one another.

I was in a situation where I couldn't get my husband to talk about debts and the screaming was something terrible. At the time, I thought it would be easier if he would just have had an affair. DH wasn't being deceitful, even - he just couldn't bear to talk about things and had his head in the sand. It took a huge effort, but we got through it and are now doing very well.

I got a lot of help from the message board at The Motley Fool.... they're an excellent bunch who really go to great lengths to help people.

http://boards.fool.co.uk/Messages.asp?bid=50079

Seek help together. Tell your wife that you need to find help and that there's no room for secrets. Take a deep breath and pray for the ability to talk about debt without blame or resentment. Your family depends on it.

liz105

You've got a big loan on there, have you tried to consolidate before?

tsotd

liz105 wrote: »

You've got a big loan on there, have you tried to consolidate before?

the home owner loan is a consolidation from afew years back