Advice, asap, please!

thenest23

Hi everyone, 
Completely new to forums but really need some realistic advice. I'll keep it short, i have around £16,500 worth of unsecured debt. Across small loans and a credit card. I have been on maternity leave and am returning to work part time. My little one will be starting nursery which is obviously going to put a dent in outgoings, my average income will be £1500 pm. And currently i am paying £500 on debt repayments, i am yet to default or anything but have quickly realised i will not be able to meet repayments once i am paying nursery fees. 
I spoke with pay plan today and they have recommended an IVA as we own our home, at the time i thought this sounded like a good idea but im getting very scared at the prospect of this process. I have been assured few people do equity realease so its unlikely ill have to sell me home etc. They stated a dmp would take about 24 years so suggested that wasnt a good idea! 

Has anyone got any advice they would be able to share? Or reassurance? I have a phone appointment with the insolvency practitioner tomorrow so any advice before that would be gratefully received! 
Thank you 

fatbelly

You are right to consider the prospect of equity release in the 5th year of an IVA. The change in legislation to allow this to be done by secured loan has muddied the waters here. You really need a crystal ball to know what the attitude of lenders will be 5 ears from now, and what your house value will be.. Historically, that's right though - few people have had to release equity in  this way..

So you have 16.5 k of debt and (according to payplan) £57 per month surplus. If you have little equity now, then you may be inclined to take the gamble.

Have a read at debt camel before your telephone appointment

https://debtcamel.co.uk/iva-equity-release/

Queen_of_the_Hive

Hi thenest23, I couldn't comment on the IVA situation however I really recommend posting your query on the Debt Free part of the forums. There are a lot of others that have been in similar situations (or worse) and they may be best placed to advise you. I'm a parent who ended up in 10k of debt after returning to work and am paying this off slowly and the debt free boards have been great for support as this is a marathon not a sprint. 

thenest23

Thank you ill post on there and check the website link, thanks! 

sourcrates

It’s ok I will move the post for you.
I have deleted your other post, just use this one, thanks.

ryanm8655

It sounds like you have done an SOA of sorts, could you share it?

You say we, so where is your partner in this? Does the £1500 include their income?

thenest23

No the 1500 is my income. It is not his responsibility to be included in this, these are my debts so i have only done my income and my contributions if that makes sense. I dont know how to share my soa they have sent it over in a pdf. Basically with childcare contributions at 340, mortage and bills 575 food 130, and my ither outgoing i was left with 56ish to pay into an iva. 

HampshireH

But childcare etc is his responsibility.
Are your and your partners household bill payments proportionate to your incomes?

thenest23

Oh sorry i wasnt clear! We pay half for everything, i actually earn more but he has less outgoings as the debts are in my name. That childcare cost would be my half, we split every single bill that links to the household if that makes sense. 

ToxtethO'Grady

Just a thought based on your situation. You said your little one is starting nursery and the childcare is taking a lot of your money but if your child starts school during the term of the IVA the IP may say you have more money as your childcare costs have reduced. They may want to move the extra money in to the IVA and you'd end up paying more back.

Have you an idea of how much you would save in childcare when your child goes to school?

Galloglass

It is not his responsibility to be included in this, these are my debts so i have only done my income and my contributions if that makes sense.

So it will be equity release from your half of any residual equity? The ability to get ER will depend on two signatures. Do you have that agreement in principle?

as the debts are in my name

We're they wholly and exclusively incurred by you?

Separation of debts and liabilities can be tricky and though you may have a plan now, it is best to have all the details agreed (in writing) before you set out on the IVA. There are some figures recently that up to 27% of Creditfix's IVAs fail but only 7% of Stepchange do. The IVA suggestion comes with a health warning depending on who you are working with.