Need Advice!

LutonStudent

Hi All, 
Hope you're all well.
I need some advice, over the past six years, I've got myself into a pickle with unsecured borrowing. I'm 26 and work a full time job to which I am currently furloughed. My cards are nearing the end of their zero percent interest and I know it's going to be tight and I'm not actually hacking at any of the balances, just paying off the interest. I want to explore the route of a possible IVA. Can anyone see if this will be accepted? As Tesco Bank hold the majority of the debt in question. I believe that if I am made redundant, I will have no choice but to do so. I have never defaulted on any payments - Will I still be considered even though I have not defaulted?
SOA below.

Thanks in advance.




Statement Of Affairs And Personal Balance Sheet
Household Information
Number Of Adults In Household 1
Number Of Children In Household 0
Number Of Cars Owned 1

Monthly Income Details
Monthly Income After Tax £1,525.00
Total Monthly Income £1525.00
Monthly Expense Details
Private Rent: 437.50
Council Tax £70
Electricity £37.50
Gas £0
Water Rates £25
Mobile Phone £56 (contract)
TV License £12.00
Satellite/Cable TV £11
Internet Services £11
Groceries Etc £100
Clothing £15
Petrol/Diesel £100.00
Road Tax £12.00
Car Insurance £30
Car Maintenance (Including MOT) £10
Pet Insurance/Vet Bills £30
Contents Insurance £5
Presents (Birthday, Christmas Etc) £15
Haircuts £16
Entertainment £40
Emergency Fund £50
Total Monthly Expenses £1,083.00

Assets
Cash £0.00
House Value (Gross) £0.00
Shares And Bonds £0.00
Car(s) £600.00
Other Assets £0.00
Total Assets £600.00


Secured & HP Debts
Description Debt Monthly Apr
HP And Other Secured Debt £0.00 0.00%
Total Secured & HP Debts £0.00

Unsecured Debts
Tesco Bank - £11250 - 4.9% APR for life (£180 P/M minimum)
Tesco Bank - £5400 - 0% until January 2020 then 18.9% APR (£50 P/M minimum - will be £180 in January 2020)
Lloyds Bank - £3600 - 3.4% until May 2022 then 34.9% APR (£50 P/M minimum)
Halifax - £3200 - 3.4% until May 2022 then 34.9% APR (£45 P/M minimum)
Barclaycard - £900 - 18.9% APR (£25 P/M minimum)
Hitachi Car Loan - £3100 - 14.9% APR (£105.00 P/M)
Very - £180 (£15 P/M)

Monthly Budget Summary
Total Monthly Income £1,525
Available For Debt Repayments £442.00
Monthly Unsecured Debt Repayments £470.00
Amount Surplus Or Short For Making Debt Repayments £28.00

Personal Balance Sheet Summary
Total Assets (Things You Own) £500
Total Hp & Secured Debt £0.00
Total Unsecured Debt £27,630.00
Net Assets £500

fatbelly

An IVA is bankruptcy for someone who is protecting an asset - usually a house, sometimes a business or an expensive car.

You have no assets worth protecting so the question is whether you should declare bankruptcy.

An income payment order, on your figures, would be 442 x 36 = 16000 in round figures. Your debts are 27600. A debt management plan at the same figure would take just over 5 years (the duration of payments in an IVA!).

In your situation, I think I'd be looking at those expenditure figures. You're only £28 short of making ends meet. Halve the mobile phone, or knock £28 off the EF or the entertainment, or some combination of those, and you're there.

If your situation improves as you come back from furlough, you can throw more at your debts. With an IVA you could face paying back more than you owe.which I think makes it the worst of the 4 options I have outlined.

mwarby

If the OP went for bankruptcy, the amount for food could easily be doubled, but the emergency fund I think would need to be £20. There are probably other items which could be added, such as medical (prescriptions, dentist, opticians etc). I think you'd be looking at about £300-350 IPA, although this would go up when income goes back up.

I agree with fatbelly on IVA not being suitable. A DMP might be an option but your looking at 5-6 years. Bankruptcy is an option but I'd think long and hard about the impact that might have long term, your credit history will be bad for 6 years, and for things like mortgages the 'have you ever been declared bankrupt' question will come up, it's worth noting the times that question is asked there will 99% be one asking about arrangements with creditors (ie IVA). Also bankruptcy may see you paying more in IPA than the debt if circumstances improve

I'd suggest that DMP is probably your best bet, if your made redundant bankruptcy is perhaps your only option (an IVA with no income isn't hugely viable). If yiu had an IVA and were then laid off your IVA could fail(reduced income would need a meeting of creditors, they wouldn't need to accept new prospsed payments), which gets you back to square 1, with IP fees as an additional debt

sourcrates

Any debt solution requires you to have an income, the only exceptions are Debt relief order, and Bankruptcy, in your case, if that happened, then Bankruptcy would be your only realistic option.
IVA’s are really only suitable if your debt is upwards of 40k and depends on your disposable income.