Step Change recommending IVA?

stu12345_2

so at present your income statement is wrong and hence so are all your outgoings, cos you put it down you pay it all and she has no money in wages or rental income, it's total income, total household income we need to know to get accurate picture.

DID. you tell stepchange she has no wages, no family child benefit and no rental income to contribute to household. this is an important question !!!!


does she pay mortgage in her property 

cos if other posters see your  statement of affairs they will reach the wrong conclusion unless you change it.

iva work if you have very low free money at end of month once bills are split and lots of debt and own a house.

but I'm thinking your household isn't as poor as it appears which will cause you to make a highish monthly amount to an IVA which you want to avoid and if course there is the remortgage clause in year 5

cos if she has no mortgage and you add her wages, child benefit, rental income,your wages, then you can clear your and her debts without an iva

cos there is an extra  £1600 a month coming in in February even accounting for her debt repayments and indeed some good useful money at present still coming in

I mean at present she has about £1200 a month coming in, what is she doing with that apart from paying swimming lessons , her debts and TV licence and water??

just how much is she spending on running costs for her car, especially if she's not needing it for work 
she must be saving a lot up at your expense 

and that's even if you up expenses, car costs, food, leisure 

let's say £1100 at mo, and £900 after her debts add that to your £362, less upped expenses.
you could almost meet min payments on debts.

but you want to pay less so they default, interest stops, then the say  the expected long-term £1600 plus your £362 less extra expenses  means you really don't need an IVA imo, especially if you offer low repayments to creditors in a dmp whilst you save up in an emergency fighting fund for future discounts in full and final settlement offers 

I think if she has no mortgage hers and your debts could be cleared in 4 years even. with upped expenses, but less time with discounted offers too 

I think an IVA will be a serious mistake 

the key is making sure she has rental income and goes back to work in February 

elsien

@sourcrates and @fatbelly are well versed in these scenarios and have a broader depth of knowledge. I think I would wait for their point of view to come along. 

stu12345_2

yes looking forward to sourcrates and fat bellys comments, it be good if they look back at mines to see what they think and any errors I have done 
I think the way IVAs  are promoted for folks in debt that own homes, is they only pay £100 a month for 6 years and that's all, no remortgage, no increase if free left over income goes up.

especially if they apply and they are working, and even worse if there's two incomes coming in and only one IVA !!

fatbelly

Hi. My friend will no doubt be along later. We are two different people and sometimes take a different view.

It's 60 k debt in round figures, £300 to service it from the OP and wife doesn't want to be involved. She can't be forced to but should be kept aware of developments because if the mortgage or any other financial product is joint, her credit file will be linked to the op's.

With a house and a Warhammer collection (no idea what that is) to protect, stepchange should not have suggested bankruptcy as an option and really you should complain, though they would probably say they weren't promoting that option. That's where debt advice is today.

My first comment is When in a hole, stop digging. It looks as if you have been propping things up by increasing borrowing at increasing apr and that has to stop. You will need to be banking where you do not have debts, and start to default on payments, and build an emergency/fighting fund for a few months.

Now as for strategy it does appear to be between dmp (a very long one) and IVA. At this stage I would talk to Stepchange as a least-worst provider of IVAs and see how it goes, keeping your wife aware of the discussion.

Please post again when you have some more detail.

sourcrates

Sometimes we take a different view, yet on this occasion I must concur with my colleague, don`t rush into anything.

Whilst it appears on paper you are a reasonable candidate for an IVA, they are not as simple and straightforward as you may be led to believe, there are caveats for your payments to increase yearly, any windfall must be paid to the arrangement, re-mortgage in year 5 is an almost certainty, and if not a further year (at least) of payments will be required, your budget is tight, and you are constrained in what you can and cannot do.

A new angle to this may come your way towards the end of the arrangement, whereby some "preferred partners" may try to sell you a loan to pay off your IVA, you get a lot of people jumping on the bandwagon nowadays.

The only good thing about an IVA is that your home is legally protected from your creditors, and your assets are yours to keep, only in bankruptcy does the Rembrandt and the family silver have to be sold.

I have had an IVA, and it was not a particularly nice experience, for me it was totally wrong, as at that time I had no assets to protect, for you it may not be so, just get good advice and see what you think.

stu12345_2

like I wrote, £300 plus  pounds left over for you isn't an accurate picture in reality

did you tell stepchange that child benefit, her rental income and her wages are coming into the household, that's important for dent solution.

your wife has £1200 including your family child benefit, her wages and rental income at present which isn't showing up either in family income or her paying much in the family outgoings.

and when she goes back to worl full-time , there is £1900 coming i.n on top of your wages.
which includes her wages, rental income and family child benefit.


in any dmp , creditors looking for a repayment plan , hence a charity looking for a solution will need to know full incomes if partners live together and thus share bills based on who earns how much. and the ratio split.
to get a proper picture  and { you can also  declare they have their own debts to that they have to pay back)

in an IVA it is expected the same, of course neither a dmp or IVA will cause your partner to be liable for your debts. or you liable for hers.

here's a link below  for general rules for joint incomes when one of you  going for a dmp and how partners income is used in the financial statement of affairs

https://debtcamel.co.uk/dmp-affect-my-partner/

and the 3 screenshots are related to when an IVA is applied and there are 2 incomes coming in 

ByzantineByron

Thanks to @fatbelly , @sourcrates and @stu12345_2 for your advice thus far.

Spoke to Step Change and Money Advice today.

Both of them largely agreed on the following points;

• It is between IVA and DMP for me. Both suggested an IVA as a DMP in their words isn't protected against interest rate increases or lenders just saying 'no'. Both also suggested that while 75% of lenders need to agree to an IVA, none of my lenders are problematic in that regards.
• Both confirmed it would be a 6 year IVA and would reduce my monthly debt payments from circa £1300 to circa £200
• Both confirmed the obvious, that I cannot take any further credit but also that I can still live a comfortable life, maybe take a cheap city break and get the car fixed if needs be. More importantly I would be able to afford the upcoming nursery fees.
• Warhammer is a collection of small model figurines. If I sold the whole collection I would probably get between £2-3k but it's all in smaller chunks and dependent on finding the right buyer, I could make £3k in a month or I ight make £1k over 6 months.
• Both confirmed that I wouldn't be able to remortgage with another lender, but my current fix runs for another 4 years and 2 months and I can always re-fix with them or go STV (depending on interest rates)
• I've absolutely been open with the wife on this, but she's also clear that she cannot help. There's a lot of baggage around this, but this is absolutely a red-line for her. I did disclose her earnings, her expected earnings when she goes back to work and both were comfortable with it.

I'm wary, as I'm aware both have a bad rap but it is feeling like I might be one of those people that an IVA suits. I've got time, both were clear that I did not need to rush, or sign anything without feeling comfortable about it.

fatbelly

Well that sounds good. Just a reminder that they are selling something that nets them 1000s for filling in a few forms

When they say a 6-year iva, are they saying 5 years with the usual requirement to release equity in the 5th year, probably failing and meaning another year year of payments OR are they starting with a 6-year plan that might drag on further. Insist on the former.

They are not being entirely open about a dmp, for obvious reasons. In the real world there is no reason for scare stories. The real downdsde of yours is the length of time it might take

stu12345_2

I can't understand how you had £364 left over for debts when you never filled in partners rental income, her current  and future wages and family child benefit, on your earlier post this morning.

 but after declaring this extra £1100 to £1900 , step change say you now got even less money left over£200.????


there is more chance of me becoming prime minister, than that will be the amount you pay in February or indeed any month going forward after that.

something not right

and I've never known a creditor not accepting a dmp, you could put down you spend £40 a week in fags and they will still be hally to accept a dmp.

step change sounds like they are reading from a script and totally wrong with this only £200 left over, especially after you added in the £1100 to £1900.extra household money that your wife pulls in.

if you lose job iva fails, you owe everything plus £8000 in IVA fees on top, back to square one.

 if your wages go up and hers , thus giving you more free contributing income , you have to give it to the IVA.
your Warhammer games do not come into this what so ever., there is no need to mention it to any debt charity.

and in IVA in year 6 equity will have to be released in a remortgage.

being open with wife is fine, all youre doing is working out her share of the bills after she has paid back her monthly debts, 

when you go a charity  dmp interest is 99% almost stopped immediately,I've been on one that's what happens, you can delay a dmp for a few months to increase the speed of your defaults.

I think you should ask another charity to work it out, like I said declare your debts, the  full wages and benefits  coming in for both and a side note to your wife's monthly amounts to her debts she pays.


citizens advice and national debt line 


don't mention your Warhammer figures, it isn't needed to be known in an IVA , dmp or bankruptcy.

lock them in a cupboard until your debt solution has been and gone, then do what you want with them

sourcrates

Fatbelly makes an important point, by far the vast majority of those who sign up to an IVA never read the paperwork.

Months later they post on here about how unfairly they have been treated, they didn`t understand what they were signing up too, etc etc etc.

Now I understand you do not fall into that camp, as you are doing your due diligence and rightly so, but if you don`t ask, you don`t get, so make certain you have the terms and conditions of your arrangement fully agreed and in writing, before you sign anything, because once its rubber stamped by the court, you will be bound by it.