80k debt, shared ownership & self employed. IVA or something else?

JoeBloggz00

MovingForwards said:

Can you post a statement of affairs so members are able to fully assess your situation and make appropriate suggestions.

Incoming

Child Benefit 87

Child Maintenance 520

UC  960

Total  £1567

Outgoing:                    Monthly 

Santander Mortgage	223
Pet plan	30
Amazon prime	7
Rent	297
o2	25
Sky	35
Eating out	100
Apple	10
Netflix	10
Gas & Elec	70
Car PCP	329
food	200
petrol	300
car insurance	80
IVA
water	10
	£1726 total

 Debt                       Current    Limit        Monthly 

MBNA	5500	7000	130
Barclaycard	8000	8000	133
Monzo  overdraft	2000		110
AA	24219	28622	366
Hitachi/Novuna	8900	9000	271
HSCB	3000	4000	70
Hastings	10100	11000	220
Paypal	1700	3500	118
Starling	4000	4000	0
Novuna	9000	10000	287
Tide	4000		70
	£77919		£1775

Grumpelstiltskin

Amazon Prime, Sky, Eating out,  Apple and Netflix won't be allowed.

Petrol is that business or private use?

If it's business it wants putting on business expenses.

JoeBloggz00

Sky is broadband which I need for work as I also work from home half the week, Prime can go, Apple is for my Daughter but can go again and I was told a reasonable amount of eating out and social life is allowed. 

Petrol is both and of course if business then it goes through the company. 

I'm aware of meant I'm meant to do re expenses and so on as have been running companies for 15 years now, that's not my issue. My main ask, and I repeat again, is is a IVA the right thing - or would you consider selling the home - 

I'm simply asking for opinions on the bigger picture. I don't need the expenses picked apart as I've done that for 2 hours with the debt line already - and of course will cancel what I need to. 

What I would like to know is 
1) Are you allowed to still live a decent life or is everything scrutinised by the IP 
2) Can I still take things like a holiday once a year, so we can still have some form of quality of life 
3) If you had equity in a house, would you sell and move in to rental and try to offer full and final settlements to each of the loans etc, or would you enter in to an IVA and stay secure in our house 

fatbelly

An IVA is individual so you should be able to build something into the plan to deal with the car situation at the end of the PCP.

Now that we have your soa we can see that an IVA is a viable option if the detail can be agreed on.

I was surprised that you don't pay council tax - presumably you are in one of those rare areas that give 100% relief to those on UC.

You will have an annual review.

Expenses have to be 'reasonable' so a cheap holiday could be factored in to the agreement.

However, I wonder if £80 is going to be enough - it may be a hard sell to get creditors to agree to that.

If it fails then I wonder if token offers, try to save a lump sum, try full & finals would be a suitable strategy

On your final question, if I had equity in a house, would I sell and move in to rental and try to offer full and final settlements? No, I'd want to stay in the house as long as I could afford the mortgage. Non-priority debts  can be kicked down the road for a bit.

JoeBloggz00

fatbelly said:

An IVA is individual so you should be able to build something into the plan to deal with the car situation at the end of the PCP.

Now that we have your soa we can see that an IVA is a viable option if the detail can be agreed on.

I was surprised that you don't pay council tax - presumably you are in one of those rare areas that give 100% relief to those on UC.

You will have an annual review.

Expenses have to be 'reasonable' so a cheap holiday could be factored in to the agreement.

However, I wonder if £80 is going to be enough - it may be a hard sell to get creditors to agree to that.

If it fails then I wonder if token offers, try to save a lump sum, try full & finals would be a suitable strategy

On your final question, if I had equity in a house, would I sell and move in to rental and try to offer full and final settlements? No, I'd want to stay in the house as long as I could afford the mortgage. Non-priority debts  can be kicked down the road for a bit.

I've already paid my council tax off but that should be on there actually, will add it on. 

We only have one creditor who would need to agree to it apparently, the AA, as my loan with them is the one that falls within the 40% of debt owed, or something, I can't remember how the chap worked it out but he said he thinks they would go for it. 

Thank you, I though the same as moving children in to a rental and going back a step scares me. I will send the letters off to the creditors to get some breathing space for now, and go with the IVA.. I think. Is it a scary thing to be in? I just worry that I won't be able to live without fear of my every move being monitored, and adding to my anxiety. 

MovingForwards

I wouldn't sell and move into a rental either, especially with children.

Potentially consider a DMP, especially if you're business can bring in more money as after debts have been sold on from the original creditor you'll get away with lower full and final settlements.

Or, if you want a fixed conclusion and know there will be an end date in 5 or 6 years, go with the IVA. 

sourcrates

For an IVA to be agreed, 75% of your creditors by value of debt need to agree to it.

So if one creditor holds 75% or more of your debt value, then yes, you just need to convince them that this is the best option they have for getting any return on there money.

I also don`t think £80 a month is a viable amount though, remember creditors will be looking to get the best return possible from you, so convincing them of that is your number one priority.

They may want to negotiate your payment amount with you, before making a decision, don`t rely too much on the advice of the person selling you the IVA, unless you are taking advice from a debt charity, all they want is money from your fee`s.

Actually being in an IVA is no big deal to be honest, life goes on as normal, you are not watched or checked up on, you have a yearly review, at which time your payment will almost always increase, you must budget correctly because of this, that is very important.

Your income must remain as stable as possible as well, a lot of IVA`s fail due to bad budgeting decisions, and ignorance as to how an IVA actually works, but in your situation, it looks to be a viable option, but be prepared to have to increase your monthly payment.

Otherwise you could go with the saving up a lump sum/final settlement strategy suggested by fatbelly, the normal debt collection process can take many years as debts are bought and sold by various collection companies, so nothing happens quickly.

The IVA option may seem attractive, but keep in mind the re-mortgage clause in year 5, if that`s not possible, you may be looking at another one to two years of payments instead.

gizmo111

These are all personal debts and your income is not stable - I would go for token payments for a couple of months and tehn a realistic DMP - much easier than a IVA.  Not sure why  business debtline got involved, you may have used the credit for the business but the company doesn't owe them - although it may well owe you!

Spendy_no_more

Let me start by saying I'm no expert but my thoughts echo gizmo111 above - these are all personal debts, therefore if anyone else came to the Boards saying they had this level of debt surely the advice would be a DMP? The fact that JoeBloggz incurred the debt due to supporting their business, does not make this business debt as it's all in their sole name. I don't see IVA's recommended very often on here (due to the fees involved and the fact it's 'sold' to people), the first answer is almost always a DMP so would be good to hear from the experts about why an IVA would / could be more suitable in this situation - or can a DMP be more suitable? Least that way you can do a full SOA accounting for ALL expenses (annual and monthly) and start budgeting for these costs, paying token amounts to the debts in the meantime. If you have better years in your business then you can use this to make full & final offers to the debts. You mention none of these debts are secured against your home which is good news. I don't think you need to worry about losing it as these are all non-priority debts. I definitely wouldn't sell a secure home and asset to pay off non-priority debt, leaving you and your child in a precarious costly rental situation.

fatbelly

The reason a dmp isn't a great solution here is that there is little available as a monthly payment - maybe £80 - and the debt is large at around 80k. That would be a 1000-month plan, around 83 years.

An IVA sorts out the debt in 5 or 6 years

AA is around a third of the debt total so they could block the proposal. That's not the same as saying that they could alone agree to it

As sourcrates says, 75% by value need to agree and that would take some doing at a return of 5p in the £