A bit of debt clarity.

BLOOMERS40

Hi,

Was wondering if anyone could offer a bit of advice around my debts, or more so my now confusion on the potential solution.

I've read loads on here and other things on line about the best way to go to clear my 61k of debt.

It will either be a DMP or IVA and looked through stepchange particularly with budget tools etc.

I'm married a home owner with a joint mortgage with my wife. Currently we have a joint bank account to pay bills shopping etc. The debt or the majority is all in my name and is all credit cards loans. 2 debts are in joint names. All the debts are defaulted for some time now, in fairness I'm surprised I haven't been issued with a CCJ reading others posts. My wife is wanting to get a separate bank account to manage my debt separately. 
If we had separate bank accounts would a submission for an iva or DMP take her account into consideration for my debt? And in an expedendature list to the IVA or DMP would I be able to put all the bills on my outgoings almost to protect her wages from my debt. When looking into IVA s I assumed we could get a joint one but seemingly this can't be done. I assume that the likes of council tax, energy bills would need to be 50 50 on an expenditure the only bill legaly I guess is the mortgage being joint.

With A DMP as much as it sounds less intrusive I'd be 100 by the time it was paid off based on what I can afford per month. And again reading the great advice on here not sure if the creditors would accept a DMP anyway.

I haven't heard from some of the debts for a long time well over a year and been defaulted for 2 years nearly. However some are daily amd whilst most I have explained my scenario I haven't had any further legal action.

I've just been made permanent in my job and feel in a better place mentally and financially to tackle this but equally want to try and keep my wife's wages separate to my mess, driven by a gambling addiction as well as being unemployed causing the defaults.

Any advice or where to start would be most welcome and appreciated.

Thank you

RAS

Please get yourself a new basic bank account and arrange for your salary to be paid into it. And if possible take one name off the joint bank account. You can't prevent your wife's credit record being affected because you have joint debts and a mortgage, but the first part of protecting her income is to separate out your finances as much as possible.

Grumpelstiltskin

For us to give you advice tailored to your situation please do a SOA.

If you read through this thread.
In Debt and Wannabe Debt Free? First Steps! — MoneySavingExpert Forum

You will see the link to the SOA. Format it for MSE and copy and paste on to here.

Make sure it is accurate.

When we see that we can advise you correctly.

BTW If the debts were caused by an addiction have you received help in conquering that addiction?

As RAS said because you have joint accounts with your wife her credit record will be affected.

sourcrates

IVA`s are individual, hence "Individual Voluntary Arrangement", from what you say, being a homeowner and 60k in the red, it might be the route to take here.

Budgets are normally done on the basis of a family`s spending, I`m afraid the wife will be involved with this.

There is a re-mortgage clause in almost every IVA in year 5, and the constraints of an IVA do not suit everyone, overtime/windfalls etc all must be paid to the arrangement in some value or another.

It would be the sensible choice, as your home is protected from further action by an IVA.

Debt management, not many plans run their full course, many are settled early, you save regularly into a settlement/emergency fund, debts are sold all the time, for a fraction of their face value, debt purchasing companies take over, and in time settlement offers get made, you can normally settle, depending on various factors, for anywhere between 40% and 60% of a debts value.

You mention legal action, its actually quite rare, it just seems to be more prevalent at times, but that`s due to the large number of outstanding debts, rather than an increase in judgements.

Some debts are never chased at all, commercial decisions are made on how a creditor should proceed, and sometimes do nothing is exactly what they do.

As a homeowner, your choice is between IVA & DMP, no matter which you choose to take, make certain you get advice from a souse that`s not trying to sell you anything, the debt Charites for example, this forum, National Debtline/Debt Camel, are all good information providers with no agenda whatsoever.

BLOOMERS40

@sourcrates thank you for the information that certainly clarified this up about the joint money being brought into it.

Only a few of the creditors are chasing at the moment so would it be more beneficial to work out a payment plan with these individually of the ones that are chasing? and the ones that are not leave to one side at present? So rather than going into a dmp put a payment plan in place with the ones chasing.

The IVA in the grand scheme was really my only option but if I can tackle the debts or the smaller ones as if I'm honest I don't know who owns some of them any more I have a large loan with Tesco it has been defaulted for over 2 years apart from a 6 month statement from them I haven't heard anything.

Interesting about ccj it has been causing me sleepless nights at present not saying ofcourse it won't happen but its been a fear.

@Grumpelstiltskin I will work on this, I've completed an soa and have worked it out personally but will put this onto the format thank you

@RAS thank you for that, it makes sense is separating it out, if this was separate then I guess I can complete a SOA taking just my earnings.

sourcrates

BLOOMERS40 said:

@sourcrates thank you for the information that certainly clarified this up about the joint money being brought into it.

Only a few of the creditors are chasing at the moment so would it be more beneficial to work out a payment plan with these individually of the ones that are chasing? and the ones that are not leave to one side at present? So rather than going into a dmp put a payment plan in place with the ones chasing.

An IVA is very formal, legally rubber stamped by a court, with plenty of legal rules to follow, it is insolvency after all.

DMP (or payment arrangement) not so formal, its actually quite an informal arrangement, especially if you do it yourself, your terms, your rules.

Creditors have no say as to whether they accept a DMP or not, you pay what you can according to your budget, if they don`t like it, all they do is either assign the debt to a collector, who will accept what you offer, or they sell it, and the same applies again.

Pretty much what you say goes, which is why I prefer this option above all others.

You may have 60k in unsecured debt, but once its sold and time has passed, that 60k might be settled for around half of that, if you were lucky.

You may be worried about your property in a DMP, as there is no legal protection, it is always a risk granted, but you took that risk when you borrowed that money initially, and as long as some kind of payment arrangements are in place, legal action won`t be on the cards, but for arguments sake, lets say a creditor did take you to court and their claim was granted, again, as long as the court agreed payments are maintained, no further action will happen.

They only tend to go for orders for sale if no arrangements are in place, they are so rare these days official records stopped being kept in 2019.

stu12345_2

you include your wife's wages in a sao, cos you can then see the total money coming in the house, then you can see what%  each contribute based on wages ratios  , thus then include the food, clothing, council tax, elec, gas, water, birthdays, leisure, savings, emergency  fund, which is shared based on the ratios

so if she earns the same it's 50 50, but if you earn double, then it's split 66/33.
then you can see what exactly you have left out your wages after you and wife have split household outgoings by wages ratios, for you to contribute to your debts

a ccj will not just be created , you get warning in a letter before action from creditor, which allows you to settle the debt or agree a payment plan with creditor.

ccj only if that plan or settlement isn't acceptable with creditor

BLOOMERS40

Thank you again @sourcrates the information provided certainly has eased my worry a bit. 

When you mention orders for sale, I assume this is outstanding debts for a collection agency to purchase? Apologies just for clarification.

So for arguments sake if I set up a payment plan to what I can Offord on my own terms to the creditors chasing me currently and not make contact with the ones that aren't then it potentially will keep them at bay from any further action. And with the ones that are not chasing don't want to stir it up if they are potentially ignoring this.

Especially if there is a chance if like you say I'm lucky and settlement fees are in place.

I'm not massively concerned about my credit rating after getting my gambling addiction under control, and the financial mess I find myself in loving within my means and not taking credit is what I intend to do going forward. Not planning on moving either.

Would it be best to contact the debt charities first or easier to set a DMP up myself?

@stu12345_2 thank you for this mate, some of the letters I have had aim towards court but have never said a date or it is happening. Seems to be the loansvand credit from less known lenders as opposed to Tesco Nationwide Virgin etc.

Grumpelstiltskin

Don't rush into any payments.

You need an SOA that will work, it's easy to underestimate your costs and you need to save as much money as you can towards an emergency fund. You need cash in hand as an emergency will crop up, they always do and you won't have access to credit so at least 6 months budget is best.

ManyWays

This article https://debtcamel.co.uk/hard-choices/iva-dmp/ looks at the choice between a DMP and an IVA

BLOOMERS40

@ManyWays thank you for the link to that, was very useful. Certainly has ne thinking an IVA is probably not the best option. I'm so glad I posted on here, wish id done it a long time ago.