IVA or DMP or DRO

42 Posts

Hi Everyone. So basically I am seeking advice with regards to my debts. I have approximately £16000 unsecured debts (Loans, 4 Credit Cards, Creation and Overdraft).Almost 2 years ago I was in contact with Stepchange and I really should have taken their advice of doing an IVA. But I was proud that I would be able to pull it off and pay my debts accordingly. However, I must admit I am finding it now more difficult. My Santander loan balance of £2800 will finish by March 2023 so I am thinking I don't have long to go. I am paying £438 per month for that.
Meanwhile I have been in touch with Barclays today and I have just agreed a repayment plan of £92 × 47 months. My credit card balance is £2747. Calculating it that means I would be paying £4324. So that means in interest alone I would have paid £1577. Now this really got me disheartened as we can barely make ends meet now plus the fact that we don't have any savings. I have also a little girl which I feel so sorry for coz I can barely provide for her needs. I do not have any priority debts and all my other credit cards are up to date but on minimum payment.
I am not British but a permanent resident and I am hoping to get my citizenship next year. I am not sure if this will affect it?
Plus we are hoping to be able to save for a mortgage in the next 2-3 years but is just finding it so hard with every little expense that we have. What would be your advice for me? I might be in touch with Stepchange again and see what their advice would be.
Meanwhile I have been in touch with Barclays today and I have just agreed a repayment plan of £92 × 47 months. My credit card balance is £2747. Calculating it that means I would be paying £4324. So that means in interest alone I would have paid £1577. Now this really got me disheartened as we can barely make ends meet now plus the fact that we don't have any savings. I have also a little girl which I feel so sorry for coz I can barely provide for her needs. I do not have any priority debts and all my other credit cards are up to date but on minimum payment.
I am not British but a permanent resident and I am hoping to get my citizenship next year. I am not sure if this will affect it?
Plus we are hoping to be able to save for a mortgage in the next 2-3 years but is just finding it so hard with every little expense that we have. What would be your advice for me? I might be in touch with Stepchange again and see what their advice would be.
0
Latest MSE News and Guides
Replies
Once you've done that ("format for MSE" then copy/paste into here) we can take a look, remind you about anything it looks like you might have missed, hopefully identify a few savings you might make and also someone here should be able to suggest which way might be best for you in terms of getting to grips with things.
The overdraft goes in unsecured debt.
A few questions.
With respect to loans, can you add the end date for the loan.
Who is the third adult and where is their income/contribution to the household income?
You have a shiny car, car insurance, but no petrol, road tax, parking or maintenance? And £200 of other travel?
Are you sure this is Hire Purchase rather than PCP or leased? And can you explain why you have a shiny car but no running costs AND pay other travel costs?
V12, Ikano and Creations have obviously been used to buy new shiny things. Whilst you've obviously bought stuff, are you sure the debts are secured on those things?
Is your partner fully aware of the situation.
You mention that you save £30 a month towards Christmas and birthdays - does this realistically cover the household spend on these? Consider presents, extra/special food, travel to see relatives if that occurs, and anything else you spend on for those events - and decide whether £360 a year actually covers it - my guess is it doesn't. (I know it wouldn't for me and I don't have a child to buy presents for!) Also - if it is being saved then where is it? With less than 2 months to go ahead of Christmas now I'd be expecting to see more than £11 in cash assets to cover the expenditure at that stage?
Good solid question from RAS above re all the secured finance - what exactly are those loans secured ON? If it is a big flashy TV and similar items, and the loans are straightforward Hire Purchase agreements, then is there an option to simply stop paying and let them repossess? Or hand the items back and be able to terminate payments?
You are also showing all the debts at 0% - my feeling is that this is very much not the case though. Is anything at all on 0%? Have you double checked to see if any of the CCs can be BT'd to 0% cards? (My suspicion is it will be a no but you have nothing to lose by looking and applying if anywhere shows even a small chance of acceptance.)
Bottom line is that unless you can find £600 more income, OR make £600 of savings on your routine household costs (Spoiler alert - that one's not going to happen), then you are going to have to stop making payments to the unsecured debt immediately. Initially you could ask the providers of all unsecured debt for breathing space - that will buy you a couple of months thinking and decision making time. That gives you time to complete the missing areas of the SOA, revise your budget going forwards, and to decide whether a DMP is going to be suitable for you or whether a different approach is needed. That's not my area so I'll leave one of our resident experts on debt solutions to advise on that aspect. Whatever route you go, it may be best to look at something that can be revised in March next year when the loan finishes as that will obviously free up a lump of money each month.
You've actually taken the hardest step by acknowledging that there is a problem and looking for help on it. Now it's time to build on that and start repairing the problem. I will say that I think you'd do best to put thoughts of mortgages o the back burner for the time being - I'm afraid your credit file is not going to emerge from this unscathed. Right now though that isn't your biggest concern so don't let that worry you.
I'd be looking at a dmp on the unsecured debt as you can afford the secured debt.
However. like the others I'm not sure that it actually is secured.
can you talk us through the following
You should still be getting CT for the step-son until he finishes college. And if he has another parent, she needs to be be chased for support as well.