IVA- Payplan

Mckenna

Hoping someone has experience with this.
after a marriage breakdown I have about £34k unsecured debt. Currently I ship out about £700 a month on minimum payments getting no where fast, as I get into the end of the month I lean back on credit to make it.

I have approached payplan with a view to an IVA. We went through a budget over the phone, but I was missing a few payments for my partners expenses that they wanted even though the IVA is just for me.

looking at the breakdown of how far we got, it suggests a payment to payplan of £1760 a month - our disposable income if you will.

this does not seem right... that is virtually my entire pay per month.... which means my partner would subside my entire life...

my understanding is our disposable income should be split between us in order of %of income.... is this correct? 

The suggested payment would defeat the purpose of the IVA...

they are calling me back Monday for the few bits of details I was missing.

sourcrates

Are you a homeowner, or do you rent ?

When you produce a budget, its not something you can create ad hoc over the phone in ten minutes, its something you take time over, and include every single little thing you spend money on, the morning paper, the ice cream you buy little jimmy, the latte or two, you have with Doreen at coffee time, you account for everything, and include emergencies, you must have an emergency fund.

Don`t rush into anything here, Payplan sell IVA`s, yes, sell them, they are acting as a sales company, rather than a debt advice company, this is because your broad circumstances fit the profile of an IVA as a solution, to see if this is true or not, we need to get to the nitty gritty details that will determine what`s best for you.

So if you can run us through your circumstances we will know more.

Mckenna

I am not a home owner anymore. I live with my partner who is the tennant for a council property.

I can not consider bankruptcy, this would cost me my job. 

Whilst I am yet to miss repayments, I can not afford them as they stand, I lean back on credit at the end of each month to get by Payplan partner with Unison which is how I ended up there.

My debts total about 33k, credit cards and loans, I have no assets to sell/protect. I pay 700 ish a month currently which leaves me about 1k for all my actual outgoings, you can take 300 a month off that for my children.
I need to reduce my monthly payments to stop the cycle of needing the credit hence I am looking at formal solutions.

we spent an hour going through budget, but I did not have figures for some of my partners things so looking to complete the budget on Monday. 

I am just concerned that they seem to be broadly suggesting such a large monthly payment ... over double without consideration for most of that disposable income being my partners (who earns more than me) as I say as it stands currently with the unfinished budget it would be my entire months pay....

fatbelly

Are you sure that bankruptcy would cost you your job but an IVA would not? They are both formal insolvency solutions and sit side-by -side on the public insolvency register.

That calculation doesn't sound right. It should be your income and your share of the expenses that is used. Your share of the expenses is proportionate to the incomes, so e.g.if you earn 2x your partner, you pay 2/3 of the expenses.

£1760 per month means you will pay 60 x £1760, except you won't because that is well over the value of your debts plus fees and charges, but you will pay a lot more than you would have done if you just went for a debt management plan.

So I think the IVA is a non-starter on their calculations and I'm surprised they're even suggesting it

Mckenna

Unfortunately so on the IVa vs bankruptcy front.

this is my point, I get we didn’t finish the expenditure yet. However surely the calculation should remove 55% of the disposable income ... my partner earns 55% of our household income.

her disposable income is hers, it’s not mine. 

sourcrates

Nothing to stop you getting a "quote" from stepchange for an IVA.

Tell them you were not happy with the figures Payplan produced, see if they can do better.

You are not obligated to use any particular provider, shop around, don`t be afraid to ask questions, its a big step your taking.

Many people fail to ask the important questions before they sign on the dotted line, one reason IVA`s have such a high failure rate, you want to be sure whatever you agree to, is sustainable for anywhere up to 6-7 years.

fatbelly

Or even going with a decent IP

https://debtcamel.co.uk/choose-iva-firm/

No property so should just be the 5 years

But unless you can get an IVA around the £200-£300 range I'd be inclined to just do a debt management plan with full& finals to finish. Doing it yourself if necessary.