IVA... best option?

Debtworrier1981

Hi, 
I am approximately 28k in debt. Split between 3 credits cards and 3k on a loan and probably 1100 overdraft between my two accounts. Although I have been making my payments I am not getting any close to ever clearing my debts, although my loan is due to end in 11 months time. A family member has also been giving me some money each month to help out, but I want to stop this as it’s a burden on her. 

My eldest son is due to leave college so from September my income is going to fall drastically as I will no longer receive maintenance and tax credits for him.
I have 3 other children at home, and have been receiving maintenance for them from my ex partner but his job is touch and go and he has just said he will have to cut my maintenance down dramatically. 

I receive wages, tax credits and child benefit. 

After going through some of the budgeting advice online, if I can get £30 a week maintenance from my ex I would be able to offer £100-120 a month to be creditors. I wanted to go down the DMP route initially but after looking at these figures I do think an IVA would be my best option? 

I own my own home, there is equity in the property, but, I have within the past few days gone on to a new 5yr fixed rate mortgage. I would have no issue remortgaging if able at the end of the period as I would only have 5 years left on my mortgage by the time an IVA would end. 
I have set up a new account with Starling, no overdraft facility, and I am currently changing over all my income and d.debits to this account. I have already paid all my debts this month, and I have now cancelled all of my direct debits for them. I plan on using the money I would have paid from next month to form an emergency fund. I will start budgeting as if my income has already dropped to the levels of September to prepare. I was advised re. a DMP that I would be best letting the accounts default first. Does this stand with an IVA? To save an emergency fund I have no option but to not pay the creditors. Any advice would be greatly received. 

fatbelly

You're definitely in IVA territory. Have a chat to a couple of IPs.


You don't need a dmp first - just stop paying them while you build a small emergency fund


People tend to talk to Payplan and Stepchange. Also try these


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

The thing that concerns me a bit is that your surplus is entirely dependent on your ex's maintenance payments and you said on your other post that he is not a reliable payer.

Debtworrier1981

Thank you. I could definitely find the £100 a month if he suddenly failed to pay, even if it just meant using the money budgeted for something else. I would just have to make it work and if it meant cancelling a gym membership and walking more and using the car less I think it would be manageable over those years. Far more than having more than having a DMP that would never get anywhere. Would you suggest sending letters to the creditors advising I am seeking debt advice? Also, how quickly should I contact somewhere like Stepchange, should I maybe wait another few weeks to wait for the defaults? Thank you 

fatbelly

I think start talking to IPs now so that you find one you are comfortable to work with, and understand the proposal.

You can send a breathing space letter to the creditors if you wish - personally i wouldn't bother. They'll find out soon enough. But there's a template here

https://nationaldebtline.org/sample-letters/hold-action-your-account/