Feels like I'm being pressured into an IVA

mancity22

So basically I am in around £29000 of debt and in June I made the decision to stop repaying as my whole month wages was going within a week purely to repay debts.

I got in touch with Stepchange and completed the budget and it left me with £46.17 left over a month. They recommended either a Debt Management Plan or a DRO. So I applied for breathing space (which ends soon) and started the process of a DRO through Money Wellness and she just wanted some evidence of rent payments but as my partner was covering my half of the rent I didn't have this so I left it. 

Cut to now I am on a Token Payment Plan with StepChange but still receiving letters, emails and texts from creditors and with breathing space ending soon I'm starting to worry. I've just done a full month and at the end I had about £30 left over and that's without paying any of my debts as the TPP payment isn't coming out until August. 

I got back in touch with Money Wellness and they wanted to re-do a budget but this time they said as I live with my partner they need to do a joint budget. A lot of things they said "this seems a bit high can we bring it down" so basically most things got cut and it seems like I am shopping in Aldi from now on eating basic food. I accept I got myself into this mess and I'm trying to take responsibility, I don't live a lavish life but these budgets don't seem to care that there's a cost of living crisis. 

At the end they said I would have around £250 left over therefore I definitely don't qualify for a DRO. Well I definitely do not have £250 left over which they can see from my bank statement. MW passed me onto Freeman Jones and they said that basically yeah you have to do a joint budget for a DRO which you wouldn't qualify for, however the £250 isn't a set amount and if you can only afford less then we would adjust for that. 

Well how about £250 less which means you might as well just put me on a DRO then?

How can you said I have too much left over, but yeah if you don't have enough then you don't need to pay £250 a month. 

Now I get that £250 is a hell of a lot less than what I would be paying if I was making minimum payments and it does get written off after 5 years, but still I am struggling to manage my money and I do not have much left over at the end of the month. 

I told them I need time to think about it and read up so they're calling me back on Wednesday. The guy from MW initially advised bankruptcy but I told him no so now they seem to be pushing an IVA onto me which I'm unsure about. 

Should I go ahead with an IVA or just pay my token payment plan for now and see if I can start managing my money better? Or should I get in touch with Citizen's Advice and see what they recommend? 

Sorry for the long post. 

Grumpelstiltskin

If you are renting and have £29k debts under no circumstances even think about an IVA.

Go over to the Debt Free Wannabee board complete a SOA and take the advice you get on there.

Grumpelstiltskin

Start by reading this thread on DFW

In Debt and Wannabe Debt Free? First Steps! — MoneySavingExpert Forum

stu12345_2

when you apply for a dro they take the grand total wages coming in,{ the same way benefits are. worked out if you live with a partner, you will get my drift, keep reading on)

 the insolvency application takes you and partners  earnings in order to work  out your % of the total household income, they then apply that % to the household bills and living costs, eg food, clothes, rent, gas, but not debt payments 
if you do have less than £75 left a month then you qualify in general.

eg you earn 1000 partner earns 2000 rent is 500 so you by dro calculation rules you pay 166, a third. he pays 333.
 food is 300, he pays 200, you pay 100
you get the idea.
it doesn't matter if you say he pays the lot or you pay the lot  or you pay all the food, he pays all the rent, that's not how the calculations are done.

that's not how insolvency application is worked out 

they then add up all your contributions take it from your net wage and Tara if it's less than £75 a month you qualify 

regarding rent, they want to see the tenancy bill for the year which shows weekly or monthly amount due, they then apply the % income share as I explained, then they will work out what exactly you are due to pay, by the dro calculation rules.

if his names on the tenancy agreement that is, and if it is then you give the insolvency application folk eg money wellness his wage per month as I explained 

hope this helps, I gave up with money well ness, who are thick and useless for my DRO application and went to Christians against poverty who are free and more switched on with the rules 

mancity22

stu12345_2 said:

when you apply for a dro they take the grand total wages coming in, you and partners and work out your % of the income, they then apply that % to the household bills and living costs, eg food, clothes, rent, gas, but not debt payments 
if you do have less than £75 left a month then you qualify in general.

eg you earn 1000 partner earns 2000 rent is 500 so you by dro calculation rules you pay 166, a third.
you get the idea.
it doesn't matter if you say he pays the lot or you pay the lot 
that's not how insolvency application is worked out 

That's the thing, when I did my own budget it does fall below £75 and my bank statements clearly show I have less than £75 left at the end of the month. But for some reason when I did the joint budget it says I have over, but that's not how real life works. 

Brie

Money Wellness is a business and as such needs to make a profit.  Best way to do that is to get you to pay them.  So they will push for an IVA or a DMP because a DRO won't give them any of your cash.

I suggest you go back to StepChange, NationalDebtLine or CMA which are all charities not businesses.

And yes post an SOA/your budget on the Debt free forum as there will be lots more expert advice there.

stu12345_2

money wellness often do a pure 50 50 split on bills regardless of who earns the least or the most.
citizen advice bureau do it based on exact  % ratio of income.
 try complaining or ask what split they did or how the did the income% split.

if not go elsewhere like Christians against poverty who actually come to your house if you like  and work out paperwork and they are lovely and not judgemental or rude

step change don't do dros any more, money wellness won the contract from them

national debt line don't do them either but will direct you to a charity that does like all those mentioned 

ps bank statements are useful to prove your wages in a dro application, but don't show partners wages or the split that is needed by the charity to work their calculations  out 

it just shows you paid the bill from your bank account 

that's why both income statements are needed and then bills

stu12345_2

note when you did a dmp calculation with step change did you list your partners wages for stepchange to work out hi
s correct % contribution to the bills

mancity22

stu12345_2 said:

note when you did a dmp calculation with step change did you list your partners wages for stepchange to work out hi
s correct % contribution to the bills

No partner's wages were not listed, just my portion of the bills. 

I think I will get in touch with Citizen's Advise today and see what they say. 

Whilst I feel like the guy from Money Wellness had good intentions, he was saying things like "some people really want to go for an IVA but they're not eligible so you're lucky really". That's when I had alarm bells ringing, my situation is far from lucky! 

stu12345_2

you can't give an accurate picture if you just state your portion of bills

so, facts, figures and full numbers need to be given in order to work out the % split and to see EXACTLY how much you have left at end of month 

like I said what you say you pay or indeed how much you think you should pay isn't used when it comes to debt solutions especially insolvency eg dro IVA bankruptcy, as the rules are strict concerning who pays what and what % split should be contributed 

some places won't split all bills eg cab wont  split the road tax, car insurance, it's only who owns the car, but CAP and moneywellness will.


note if you earn much less than partner and they do a pure 50 50 split, then obviously it will make you appear much poorer and vice versa is they do the correct calculated split it will give exactly how rich or poor you are at end of month.
of course if you earn much more than partner, you don't want a 50 50 split as it can make you go above £75 easily  as it will wot out you pay less than you really should on a true % split

stu12345_2

the fact that money wellness thought you had more than £250 left and wanted freeman Jones, who are an IVA company to wangle the figures in order for you to fit better, explains everything doesn't it in the cut throat world of getting a new customer for their business 

note can you keep us updated on how things goes, as your situation is of great value to others reading this