Do I go for an IVA, OR payment plan etc..£60.000in debt.HELP!!!

Downsizing__for_sanity

CharlieC,

I can sympathise with you as I'm also in the forces and I know what they can be like with people who end up missing a mess bill payment etc. However, you are in the "lucky" position of having help available to you through the service charities, without it having to become a disciplinary matter.

And you've done the right thing by recognising your problem - spending IS as bad as an addiction if you ultimately end up losing your home.

As a flt cdr, I would advise any of my guys in your position to contact SSAFA Forces Help, through your HIVE first of all. They have trained advisors who will certainly have seen your situation before and be able to give you the right kind of help and advice without being judgemental. Also, have you spoken to the Citizens' Advice Bureau? Get your husband to take a day's leave if necessary and come down with you for an appointment.

Above all, don't be too down hearted - it may seem like an insurmountable problem just now, but believe me, there are many people on this site who are or have been in your situation and who will give you better advice than me.

That's why I'm on this site - I'm sick of us having 2 good salaries, but being at the opposite ends of the UK, and I want to know how we can manage to live on one salary.

Good luck CharlieC, there IS light at the end of the tunnel,

DFS xx

charliec_3

Thanks to everyone for your advice, will discuss the options with partner and come to a decision, its so hard to decide whats best, I only have 4 yrs to run on the big loan, and the car, I can hand the other car back asap, and cancel my luxerys ,that way i wont have the worry of talking to the bank, I can live on beans on toast, and will try and get more hours at work.
Does not cost anything to try it by myself, but if I need support, I know where to come and what to ask.
Many Many Thanks

ms_london

£1900 (hubby wage)
£325 (your wage)

£2225 Total Monthly Income

£35 Mobile
£400 Food
£80 Car insurance
£30 House insurance
£27 Gas
£20 Electric
£10 Animal Insurance
£10 Charities
£50 Mess Bills Army
£28 BT
£40 SKY
£17 Internet

£747.00 = total monthly outgoings

£267 £25,000 (loan 1)
£476 £20,000 (loan 2)
£250 £10,000 (credit cards)
£320 £10,000 (car finance)

£1313.00 = minimum monthly debt repayments

£165 = net monthly surplus

BASIC OUTGOINGS

• When you say that rent and council tax comes out automatically? Is this something the army pays for? If not, and it comes out of your income, it needs to be on this list.
• Your £63 benefit & £40 tax credits, is this weekly or monthly?
• £400 for food is definitely too much for a family of 3 (especially if your other half is a way most of the time). You could halve this without much trouble. (See the moneysaving old style board)
• £10 for Charities. Cancel this. Charity begins at home, once you are better off you can start the payment up again, but at the moment you need the money.
• £28 for BT and £17 for internet, could you not find an all in one package? Especially if you are using your mobile at £35 too, that’s £80 spent here each month. Wow!!! Could you change your mobile tariff?
• Look to see if you could swap your gas & electric providers to see if you can get it cheaper elsewhere.
• £50 Mess Bills Army, whats this? (is it food, that type of thing for your hubbie?).
• Are these ALL of your outgoings? No tv licence, car tax, MOT?? Money needs to be put aside for these things too. For example if your car tax is £160 a year, you need to be saving £13.33 a month towards it.


DEBT

• Please could you list ALL of your debts. Who they are with (i.e Barclaycard), the balance, interest rate (APR), and with the loan/car loan, how many months you have left. This way we can see which debts are more important (i.e the one’s with the highest APR need to be paid off sooner).
• As you can see from my calculations above, once all of your standard outgoings have gone out, and then your debt repayments, you are left with a surplus of £165 per month. (I haven’t included your benefit or tax credit money as I wasn’t sure whether these were monthly, or weekly, so effectively you will be left with more than £165 per month…)

EXTRA

• You could potentially reduce your outgoings by £240.00 per month (£200 off food, £10 off charities, £30 off BT/Mobile/Internet), so on top of the £165 per month spare, this will leave you with £405 (& benefit money). This is a good amount to be able to snowball with (i.e throw this money at the debt with the highest APR), even if you were to save a bit of that for an emergency fund, at least the figures aren’t going into the negative figures.
• Keep a spending diary. Set yourself a budget & stick to it. My circumstances are different, but I have a budget of £50 a week – that’s for food (for one) and any kind of social life, not much I know, but it can be done (and that’s me living in London). It can be fun, and you realise that you can still do fun things, but not spend so much money (go to cinema on cheap night, take advantage of the free dvd rental from home offers, library for books/videos/internet).
• Would you be able to sell one of your cars? Perhaps sell it and buy a cheaper run around. Is one of the cars just sitting there whilst your hubby is away?


Don’t feel as you are alone in all of this. There is light at the end of the tunnel, organisation is the key. If you are organised, have all of your outgoings in front of you, have a budget, know when your payments go out, then things should run smoothly from there. The worst thing is when you don’t know where you stand financially, and your head is all cloudy – things seem worse than they are.

If you want any more help, feel free to message me or email me – ill answer any of your questions. I like to help others, and I have been there (I still am there, debt is just down to £5090.00, granted, still it’s a lot of money, but compared to the £19,000 it once was, it feels like a drop in the ocean to me!!) :0)

Also check out https://www.fool.co.uk > discussion boards > managing your money > dealing with debt…..

(also the living below your means is a good one too). This is where I hang out when im not on this site. :0)

I hope I have been of some help, just don’t fret, we are all here to advise you & help you out.

If you could post the list of your debts it would be great, then I can give you some more advice.

Take care, Ms London xx

Debt_Free_Chick

CharlieC

Can you just clarify why bankruptcy is not an option. You say the Army would get involved ... why? How would they know? Frankly, it's none of their business. I know of plenty of policemen who've gone bankrupt, with no impact on their jobs.

Does the Army have some kind of counselling service that hubby could discuss this with, confidentially?

There are very few jobs affected by bankruptcy - being in the Army is not, AFAIK, one of them.

In your situation, you really ought to consider it. It's just a 10 min visit to a Court - private, not like the TV. Then an interview with the Official Receiver. Yes, you'll need a new bank account, but that's easy.

Details of Bankruptcy HERE. Have a careful read through before you discount this option.

HTH

loobyloo1980

Debt_Free_Chick wrote:

CharlieC

Can you just clarify why bankruptcy is not an option. You say the Army would get involved ... why? How would they know? Frankly, it's none of their business. I know of plenty of policemen who've gone bankrupt, with no impact on their jobs.

Does the Army have some kind of counselling service that hubby could discuss this with, confidentially?

There are very few jobs affected by bankruptcy - being in the Army is not, AFAIK, one of them.

In your situation, you really ought to consider it. It's just a 10 min visit to a Court - private, not like the TV. Then an interview with the Official Receiver. Yes, you'll need a new bank account, but that's easy.

Details of Bankruptcy HERE. Have a careful read through before you discount this option.

HTH

You'd be surprised how much of your life gets looked into when in the Army, and the higher ranking you are the more is expected of the way you conduct yourself and your family affairs.

The Army would have to know about the Bankruptcy if the court decided payments were to be made from the salary towards the debt - the army would have to deduct it surely.

loobyloo1980

ms_london wrote:

• £10 for Charities. Cancel this. Charity begins at home, once you are better off you can start the payment up again, but at the moment you need the money..
• £50 Mess Bills Army, whats this? (is it food, that type of thing for your hubbie?).
•

charities may be part of Army deductions, as my partner had them taken from his wage. they pay towards army-related charities through their wages afaik.

mess bills will not be optional, and will be something he has to pay because of his rank (only officers above a certain rank go in the officers mess afaik). think they have snazzy dress suits and fancy dinners in there. but I doubt very much it is something they can get out of paying.

ms_london

The officers mess you have to pay out (I thought that would be the case, but just wondered what it was), and you may need to carry on paying the £10 charity money....

Looking at the bigger picture though, there are ways that your outgoings can be slashed. You seem to have a good household income (hubbies salary, your salary & benefits), and you have a monthly surplus - if i were you i would look into a payment plan, rather than IVA or bancrupcy - contact payplan (who a lot of people seem to use, and ive heard good things about. They dont charge you fees for a start!!).

As i mentioned before. Could you not sell a car. If this would immediately knock £10,000 off your debt total, it's worth doing isnt it. (I understand it might not be as much as that, but still, every little helps).

Take care,

Ms_London

Debt_Free_Chick

loobyloo1980 wrote:

You'd be surprised how much of your life gets looked into when in the Army, and the higher ranking you are the more is expected of the way you conduct yourself and your family affairs.

The Army would have to know about the Bankruptcy if the court decided payments were to be made from the salary towards the debt - the army would have to deduct it surely.

Yes, your right .... IF the OR went for an Income Order. But usually they don't - you simply agree to pay the OR a certain amount each month. An income order is usually only enforced when a bankrupt refuses to pay or is consistently late i.e. it's issued to those who can't be trusted to make regular payments to the OR.

I still wonder how the Army would find out though. It's a pity, because the new Bankruptcy rules (Enterprise Act) were brought in to recognise that honest & decent people have money troubles and they should be given a quick & simple way to remedy them, so they can move on and have a decent life to look forward to. It's surely not in the Army's interests for your family to have all this worry. In your situation, I see bankruptcy as a responsible action. The alternatives are to commit your family to a very frugal life for a long while. I know it seems like I'm trying to convince you to change your views, and in a way I am But I'm having more of a rant against ignorant people who think that bankruptcy is something one should be ashamed of. Shame on them, I say!

Being bankrupt doesn't mean you're a bad person .... but I understand that some people might "whisper behind your back".

Incidentally, an IVA is not a lot different. With an IVA some of your debt is written off. With bankruptcy, more is written off - possibly all of it if you have no assets that the OR can sell. Can't see why the Army or anyone would have a different view on bankruptcy, compared with an IVA - but there are some odd people about

Good luck - we'll keep suggesting ideas for you

jen_jen_2

well done Ms London, v.impressive summary of the info given by charliec :T

Whose name are the debts in? Are they all in your name as suggested in first post if so then if you go bankrupt you are not a serving member of army and it should not affect your husband. Are the debts joint, if you go for an IVA you may have to do two of them wheras with a dmp you will only have one set of fees (or none if you go with cccs or payplan).

not being able to get to cab or cab too busy, the army welfare officers/advisors should be able to help you out, i know they work for army but am sure they will have a confidentiality agreement where what you tell them is in confidence and wont be passed on, they will also be able to give you a good idea of the amys attitude.

my understanding is the army dont like debt especially higher up as it makes someone more vulnerable to bribary etc, but if the matter is sorted bruptcy or iva then surely thats less risk than trying to manage unaffordable payments, as with the police, they are getting more understanding. (the bribary thing is not my opinion but what i think the army think)

charliec_3

Oh my, you all have been so busy, I have had my head in the sand the last couple of days, and has been quiet crap at home, the bankruptcy item is very interesting, but army is old school and we would be more stressed i think if they found out, need to look into that on the quiet.

Debts...
1 x Together loan from Northern Rock in joint names.
1 x bank loan with Lloyds Tsb in both names.
2 x Credit cards, 1 with Lloyds in wife name, other with Egg in hubby name,
Car loans both in hubby name, Can't sell one as on hp, can give back at xmas as would of paid over half, so I can just drive in and hand it back, off the top of my head not sure who its with, the other car we need as wife can only drive manual, so when i hand back mine at xmas I can use that to go to work, which we need,
All have about 4 years left to run except the Northern Rock loan 24.5 years left, ummmm

Concerned if we could did try bankruptcy, would they take a car? and could I expect the balliffs round?
I am up down scrolling to answer so many of you
Mess bills, yes your right Looby, he has to pay it, its for things like xmas raffle fund, tea and toast daily, subs and loads of other bits, and £50 at mo is quiet cheap, it has been up to £100 before, food yes we can cut down, but hubby needs money when he goes away, so again problems, I can be very frugful and live off cornflakes, but when man away he alwasy needs stuff, and again Rank comes into it, he is expected to buy and treat the lads, its a nightmare.
Today in bank I got £35 to last the rest of the month, so will have to use credit card again or up the overdraft, untill i find the bestest solution, ie try bankruptcy, cccs iva, or try and carry on as i am, i just dont know.
Thankyou loads all of you, your support and help have been dramatic, and never knew people cared so much, will try and get back on line soon.
Please keep advice coming.
Love to all Charlie