Income and expenditure

RAS

Thanks for the extra info.

The basics are that bankruptcy, IVA and DRO are all forms of insolvency.

IVAs are designed for people with high debts who need to protect an asset. Since you're not a property owner, do you have any Mona Lisas in the attic? They also have the strictest budget and the longest repayment period generally 72 months if you don't have an asset to realise. The IVA provider takes a fee (£4-9k), the cheaper ones being non-profit. If your situation improves or you get a windfall, you could pay back the entire debt plus the fee. Money Wellness was Gregory Pennington.

Bankruptcy budgets are more realistic and any payment agreement generally lasts 36 months. However assets are at risk, so Mona Lisas are an issue.

A DRO has strict "excess" income and allows minimal assets. Stepchange no longer offer them but CAB and CAP do. You do require a stable income for the 12 month duration.

Since you've only got three defaults with Stepchange, I'm guessing you went straight into the IVA without waiting for defaults? Do you have any sort of emergency fund, now?

stu12345_2

if you can cut your fuel mot repairs hobbies down a lot, and reorganise your child care costs, there is a possibility of a dmp.a proper one, not a £1 month one.
but I would target a DRO first, then bankruptcy last 

can I ask, do you think in the near future you may meet and live with a new partner, cos 2 wages are better than one when living together, and that may mean you don't need an insolvency solution. just a thought that should be in your mind 

no way do you suit an IVA, you have not signed any deals with money wellness and  you are free to go elsewhere for advice 

anywhere else will ask are you dealing with another advisor at the moment, you will have to say no if you cut all ties with money wellness 

Sharp_claws

RAS Posts: 33,033 Forumite 

Today at 4:46PM

Options

Thanks for the extra info.

The basics are that bankruptcy, IVA and DRO are all forms of insolvency.

IVAs are designed for people with high debts who need to protect an asset. Since you're not a property owner, do you have any Mona Lisas in the attic? They also have the strictest budget and the longest repayment period generally 72 months if you don't have an asset to realise. The IVA provider takes a fee (£4-9k), the cheaper ones being non-profit. If your situation improves or you get a windfall, you could pay back the entire debt plus the fee. Money Wellness was Gregory Pennington.

Bankruptcy budgets are more realistic and any payment agreement generally lasts 36 months. However assets are at risk, so Mona Lisas are an issue.

A DRO has strict "excess" income and allows minimal assets. Stepchange no longer offer them but CAB and CAP do. You do require a stable income for the 12 month duration.

Since you've only got three defaults with Stepchange, I'm guessing you went straight into the IVA without waiting for defaults? Do you have any sort of emergency fund, now?

I haven't accepted the IVA. I was surprised when that was the advise hence me posting here.
I don't have any Mona Lisa's

Emergency fund is my dad right now. I've been cutting back as much as I can in places. I currently have a DMP of which I pay £62 a month.

stu12345_2

as you have a stable income  eg a perm job (not a temp or seasonal job as an advisor could refuse a dro if you don't have a steady perm job )and as you have less than £75 a month excess money, you should not be on a dmp, but a dro and your debts will be written off after 12 months.

and you probably have less than £62 a month cos you may be cutting back unessarily 

I would complain to money wellness to do their calculations again to show you are eligible for a dro and tell them to start the application.

cos they have wrongly did your expenses, and to get an IVA you need to pay £100 a month min for 5 years, and more money every time you get a rise or regular overtime.

a DRO or bankruptcy will see you debt free in 12 months, not the 5 years with an IVA.

if money wellness can't or won't do DRO, go elsewhere either the CAB or Christians against poverty.

Sharp_claws

I started the application for bankruptcy but I'm not planning on submitting it anytime soon. The figures I put on there says its likely I won't have to make any payments but it would be scrutinised by the OR. That's with cutting back on areas too.

I will contact CAB and see what they say.

Floss

Sharp_claws said:

Emergency fund is my dad right now. I've been cutting back as much as I can in places. I currently have a DMP of which I pay £62 a month.

Can you actually afford that £62? 

I get what MW are saying about your childcare - on paper you pay out £400 but get £285 given to you in your UC income so you actually pay £116. 

kimwp

Floss said:

Sharp_claws said:

Emergency fund is my dad right now. I've been cutting back as much as I can in places. I currently have a DMP of which I pay £62 a month.

Can you actually afford that £62? 

I get what MW are saying about your childcare - on paper you pay out £400 but get £285 given to you in your UC income so you actually pay £116. 

It depends how it's accounted for. They pay £116 for childcare, but they get money towards that in UC.

So on an income/outgoings statement, if the UC payment includes money towards childcare, then the outgoings should be the full childcare amount.

I can't go back to check the numbers as I'll lose this draft message, so I'll make some up:

Income:
£800 UC payment which includes £300 to childcare

Outgoings:
£400 payment to childcare 

OP's cost of childcare is £100, but income and outgoings include the UC contribution to childcare.

Sharp_claws

kimwp said:

Floss said:

Sharp_claws said:

Emergency fund is my dad right now. I've been cutting back as much as I can in places. I currently have a DMP of which I pay £62 a month.

Can you actually afford that £62? 

I get what MW are saying about your childcare - on paper you pay out £400 but get £285 given to you in your UC income so you actually pay £116. 

It depends how it's accounted for. They pay £116 for childcare, but they get money towards that in UC.

So on an income/outgoings statement, if the UC payment includes money towards childcare, then the outgoings should be the full childcare amount.

I can't go back to check the numbers as I'll lose this draft message, so I'll make some up:

Income:
£800 UC payment which includes £300 to childcare

Outgoings:
£400 payment to childcare 

OP's cost of childcare is £100, but income and outgoings include the UC contribution to childcare.

Exactly this! So out of that income, £400 is then paid out. Although 85% comes back through UC it is accounted for within the income. The £400 leaves my account, not £116.
Right now it is tight but I have just cut my budget more and made spaces in my bank account to put the different areas into eg food, fuel etc. As I spend the money I will take it from the space to pay. Hopefully this will help me with cutting back.