IVA and 2 credit cards

garym1977

Hi.

This is my first post.

I have two years left on my IVA. Due to being too ashamed to tell my IP that I couldn't afford to live, I now have two credit cards on top of my IVA.

My question is this.

Should I inform my IP about the situation and come clean, or should I try and deal with the credit card company myself and try to keep up with the IVA?

I feel rotten that I have put myself in this situation but am willing to do as much as I can to settle my debt. I find it impossible to speak over the phone to creditors. It is my silence that has contributed to my position.

Any advice would be greatly appreciated.

Many thanks in advance.

PrettyKittyKat

Your credit cards are a breach of your IVA (I presume they total more than £500 and you haven't received permission to have them). However, you are not the first and won't be the last to do this.

If your IVA is unaffordable you MUST speak with your IVA company to ensure your I&E is up to date and discuss options. There are ways that your payment into an IVA can be reduced.

How much are your IVA payments and how much debt do you owe to your two credit cards? Once I know this I will be able to give more specific advice

garym1977

Hi. Thank you for your reply.

My IVA payment is £120 a month and the two credit cards total £6000. I could manage the IVA on its own. Its the credit cards that I can't. That's why I wondered if it was worth tackling the credit card company (Vanquis) on my own.

National_Debtline

Hi Gary and welcome to the forum


If you ran up the credit card debts because the IVA payments were not leaving you enough to live on, it suggests that the credit card payments are not the only problem here. Certainly start with a statement of affairs (SOA) to see what your normal income and outgoings are before paying any of your debts http://www.stoozing.com/calculator/soa.php.


Sometimes it is possible to add extra debts into an IVA, but that would depend whether your other creditors found that reasonable. I would recommend contacting one of the free debt advice agencies for some impartial advice on what to do next.


Best wishes


Susie
@natdebtline

garym1977

I did contact StepChange a while ago but they told me the only advice they could give was to tell my IP. Would I need to do this in writing or would I have to speak to them? I am paying the debts at the moment but falling behind with rent and buying food daily because I can't afford a weekly shop. A crash is looming.

PrettyKittyKat

I agree with National Debtline. You have accrued more debt since starting your IVA than you have paid off, this shows that the IVA is not suitable. Unaffordable most likely, possibly coupled with not changing your spending habits.

There is no point trying to keep up with the IVA and the credit card repayments, you will only get yourself into more trouble.

Ringing and speaking with your IP for advice would be best.

Your IVA payment is already very low, so the options I was thinking of would not be suitable.

I think it would be best for you to consider other debt solution options such as DMP or bankruptcy. Would these be suitable for you?

garym1977

Thank you for your replies.

I have read about bankruptcy and it scares me too much, although I don't have any assets that are worth anything. Besides, I wouldn't be able to find the setup fee. I don't know how a DMP works. I will have to research it.

How can I explain to my IP what a mess I've made? Won't they just fail my IVA instantly?

Craig1981

Hi Gary

if you could manage the IVA payments on its own, what is the 6k debt for on the cards?

DMP is similar to the IVA you are currently on - however it is an agreement between all your creditors to freeze interest and make payment until ALL debt paid in full. So means monthly payments but will take you more than how long an IVA would do. (DMP can run for indefinite amount of years)

I cant see any other option for you but a bankruptcy for all debt. Notching up 6k in debt while on an IVA of £120 pcm, definitely means you need to look at spending habits as well, or the advice given to apply for the IVA was incorrect. however, if you used Stepchange, i don't think this would be the reason

either way, you must look at budgeting advice from a debt charity

PrettyKittyKat

Your IVA won't fail instantly, so don't worry. They will likely tell you that you are in breach (which you are) and should send you a letter of breach which gives you 30 days to rectify it (not all bother with this but they should do!). Within that 30 days to rectify the breach you would need to pay off the credit card debt or put a plan in place to do this, which is isn't something you can do.

What is it about bankruptcy that scares you? It certainly seems the best option if you have no assets.

It would take you around 6 months to save the bankruptcy fee if you stopped paying your IVA payment and paid it for the bankruptcy instead. It would take a few months for the process of the IVA failing anyway (Particularly if you didn't disclose the additional credit straight away and just stopped paying as you are only in breach after 3 missed payments) so you could save the money in that time.

Debt management plan is an (not legally binding) agreement between you and your creditors to pay reduced payments. You repay 100% of the debt with a DMP so it can take many years, however interest and charges should hopefully be stopped. It can be useful as a temporary solution if you think your circs may improve and you will have more disposable income to manage your payments or complete an IVA successfully.

garym1977

Thank you for your advice. It is much appreciated.

The £6,000 credit card debt is a result of comfort spending to address emotional / personal issues between me and a close family member. I don't feel as though I can disclose any more information than that on a public forum. I am not trying to excuse myself, just telling the truth as much as I can.

The thing that scares me most is actually speaking over the phone to my insolvency practitioner and owning up to what I've done. The fear of that make it impossible for me to face. Can I do it in writing?

Once again, thanks for your help.

ToxtethO'Grady

Hi Gary


Shows how responsible lending is a cornerstone of Vanquis policies, when your details would show on the Insolvency Register for your IVA!


The advice you've been given by PKK is probably the best option, you might have an IPA for 3 years with BR but at least your debts would be gone.