Help and advice please :(

Chris_Leeds

Hello

I lost my job some time ago and now I can't afford to pay my debts. When I was working I was able to pay my monthly fees, etc, because it was a fairly well-paid job.

I took a small payment holiday with some creditors, however, I still have loads of debt. I am currently making a minimum payment to each creditor (what I can afford), but the amount I owe each has vastly increased over time. I am trying to find work, but due to my health condition, I can't work full-time. Basically, I am truly ruined at the moment.

2 of my creditors are now sending me letters warning me of defaulting..which is freaking me out. Every time the letterbox goes I nearly have a panic attack.

I have been trying to weigh up my options..between a DRO and IVA , or defaulting and personally agreeing on a payment plan with each creditor.

It seems I will have bad credit for years regardless of what option I choose.

If I end up defaulting and sorting a payment plan out with each creditor, what really happens? Do the creditors add loads more interest? Am I worse off?

Or, is a DRO the better option? I only have around 40 pounds a month left, so I don't think I could afford an IVA. Also, my total debt is around 5.5 - 6K.

These creditors are relentless and the whole thing is making me depressed. It seems there is no way out. I have held on as long as I can because I thought I would have a job by now, but things have gone from bad to worse.

Any help or info would be appreciated.

Regards

Chris

Grumpelstiltskin

Under no circumstances consider an IVA for  such a small amount of debt, yes it is a small amount.

Go over to the Debt Free Wannabee board and post on there.

Read this to begin with.

IMPORTANT - Where to seek professional impartial advice about your debts. — MoneySavingExpert Forum

fatbelly

It sounds like a DRO from info so far but if you post a statement of affairs over on Debt Free Wannabee  people can give better help

https://www.lemonfool.co.uk/financecalculators/soa.php

sourcrates

If your not working, you should not be paying anything towards your non essential debts, write or email your creditors and tell them so, that will stop the collection activity.

Ideally you should have done this much earlier in the process, affordability is everything these days, you could have saved yourself a lot of grief had you done this earlier on.

Forget an IVA, you owe less than 6k, your looking potentially at a DRO, as a DMP requires an income, as would an IVA, and you don`t have one.

Chris_Leeds

sourcrates said:

If your not working, you should not be paying anything towards your non essential debts, write or email your creditors and tell them so, that will stop the collection activity.

Ideally you should have done this much earlier in the process, affordability is everything these days, you could have saved yourself a lot of grief had you done this earlier on.

Forget an IVA, you owe less than 6k, your looking potentially at a DRO, as a DMP requires an income, as would an IVA, and you don`t have one.

Ok, Thanks for the info, I should have done this earlier, but I thought I would have had work in by now.

Do I have to go through a Debt Agent to do a DMP? Or can I contact each creditor and arrange something? The reason I am reticent to do a DRO is that I am setting up a business with someone (which starts in Jan). He is currently the director for now, till I get things sorted. If I apply for a DRO and I get a decent wage coming in then I'm sure that would affect the DRO..

Also..I am halfway through studying at UNI part-time (1 year left), which I have had to defer a year... If I push for a DRO I would have to leave the course, because I still owe the university around 1K in fees. Thanks anyway.

fatbelly

You can set up a dmp yourself it has many advantages over using another provider.

Tools here are often useful

https://nedcab.cabmoney.org.uk/dmp.asp