IVA or Bankruptcy or Family Loan

GottaGetThruThis

Hello! Long time lurker, first time poster. :hello:

I have got myself in a bit of a muddle with money.

• Owe 34k, rising to 40k if repayments continue on schedule.
• Income 1000/month. Expenses 800-850/month. Surplus 150-200/month.
• No property, no vehicle.

Creditors by value:

• 37% my bank x3 (overdraft, card, loan)
• 46% other CCs x4
• 17% PDL x6 and credit line

An IVA would require the agreement of my bank and the 2 largest cards to cover the 75% threshold.

Complicating factors:

• Gambling - the primary reason for almost all debt. Would a bankruptcy be less desirable than an IVA due to greater scrunity / potential long-term BRU/BRO?
• Recent PDLs - the payday loans above were taken out between 1-3 weeks ago. When I contacted the biggest of these to ask about a more manageable plan, they got hostile and tried to make me say I knew I would be doing a DMP or similar when I took the loan - tbh I took it in good faith that it would help me make ends meet.
• Mental health - ongoing during the period debt has been accrued, with GP consultation and confidential workplace counselling. Would this mitigate the above points?
• Parents' ill health - if either/both were to pass away during an IVA/bankruptcy, inheritance would go to creditors rather than the house deposit they want it to go to.
• Future desire to buy a house - With IVA/bankruptcy, my BH and I would have to wait 6 years before applying for anything. He could apply on his own and I could contribute to mortgage payments on paper as a lodger, but is this feasible and would this get the sort of property we could start a family in?

I have done live chats with StepChange, PayPlan and National Debtline. They are very friendly but I'm not sure if they are steering me towards an IVA when bankruptcy may be equally as bad for my credit rating for the same 6 years, but crucially be over in a year and reduce the period any inheritance would be forfeited.

So far I think my options are:

• DMP - not likely as too many little creditors that are PDLs, difficult to get agreement/compliance across the board.
• IVA - Longer inheritance forfeit period. Would not be able to increase hours for 5 years as the extra income would go into the IVA. Would the allowed expenditure for an IVA be the same as bankruptcy?
• Bankruptcy - Shorter inheritance forfeit period. Would not be able to increase hours for 3 years as the extra income would go to the OR. Probable BRU/BRO for x years after discharge due to gambling and recent PDLs?
• Family loan - Family or BH to take a personal loan (max 25k) at 4% (500/month for 5 years) to pay off most of the debt, then me snowballing remaining debt followed by taking over loan payments as a standing order to them. The only negative for this seems to be that we'd be unable to get a mortgage during the 5 years we'll have 32k (going to 0) debt between us. This option is that only one that keeps credit files free from insolvency but is it feasible?

Any advice welcome, especially if you're in or have been through any of these options. Please help. :huh:

-taff

Who's gambling is the problem and have they stopped or attempted to stop?

On your income, a DMP doesn't look like a viable option. I'm not sure an IVA would be either...mostly because you appear to be impatient to get it all done with in case it affects your inheritance.
Banruptcy looks to be an option but in any case, unless you pay the debts off without defaulting your credit file will be affected for 6 years anyway.

If you had a family loan, how would you pay it back? Are they all your debts or a combination or the other persons?

If you do go bankrupt, what's to stop the gambling?

sourcrates

IVA’ s are for people with assets to protect, such as a house.

DMP will take you forever.

Family loan, hmmmm, they would need excellent credit rating to get 25k loan at a good rate of interest, many pitfalls involved, won’t clear full debt, not a good option.

No assets to protect, go bankrupt, IPA payable if you have £20 per month surplus income, 3 years usually.

Gambling needs addressing before anything else.

Take advice from a debt charity before deciding anything.