Step Change recommending IVA?

ByzantineByron

I think I get your logic. By declaring my wife's income the theory is that as a household we would have more towards the IVA payments. However my wife has been clear that she is not contributing a penny. I got myself into the mess, I get myself out. I've declared her income and her repayments but I will speak to CAB to get their viewpoint.

@fatbelly - They briefly touched on a 5 year plus equity release but definitely suggested the 6 year plan from the off. I will have another chat with them on the 5 year plan as the less time I'm in this the better. That's definitely the reason I'm unsure on the DMP as well, it could be a long time and it was packaged that it affects my credit score pretty much the same way an IVA does.

stu12345_2

your wife is not liable for your debts in any shape or form,that's important

but her wages, rental income and family child benefit is all part of the household income
and that is how it effects how much you pay to your dmp or IVA monthly payment.

like I posted in my screenshots dmp or iva creditors will want to see total household income to ensure you are contributing your correct share towards the household bills 
and not paying too much or too little towards them

in the same way when you fill in an income and expenses form to your creditors, you list all income  and benefits coming in (and any debts the partner is paying back if they have any)

, so creditor can work out how much you can pay to your debts once it's been
 worked out what you pay towards Household bills and outgoings based on what your % of the total money coming in to household

eg if you earn lots and she earns little then you can prove that you have hardly any money left over at end of month cos you have to pay the most towards Household bills 

that's my point

in the same way when you claim for eg universal credit, if you have a partner that works and say you don't, you have to include their income as it's all total money coming in.

I know bad example but you get my drift 


when you speak to citizens advice state wife's wages now and in November and in February and of course the family child benefit and her rental income.
and see what they say for each different event period, cos in an IVA you are looking for stability for 6 years 

ByzantineByron

@sourcrates - 100%. I actually read the Terms and Conditions, but it comes with what I do for a living.

ManyWays

I think an IVA now is unwise, I suggest getting a DMP started and then looking again after 6-12 months when your partner is back at work and it is possible to produce an I&E based on facts not expectations.

That will also let you see how many of the creditors have frozen interest (in my experience that may well be all of them). And you can use this time to look at making affordability complaints against all of the lenders going into the DMP as winning any will remove interest and cut the amount you have to repay.

ByzantineByron

@fatbelly @sourcrates

One question I had on IVA is that the proposal recommends I stop my current payments to creditors while the proposal goes in. That seems a little counter intuitive as every advice ever seems to be 'continue making payments as normal' but I can see the logic in wanting to prove that you can make payments.

Are you able to shed any light on this? I'm happy to start cancelling direct debits but want to be certain before I do. 

fatbelly

Whatever the chosen strategy, I recommend stopping contractual payments to creditors. If you could genuinely afford to make them, you wouldn't need a debt strategy. Most people are robbing Peter to pay Paul and need to stop.

Some organisations recommend token payments. Not really a big fan. All it does is slow things down. For a dmp, you want the defaults. For a DRO you need to treat creditors equally. For bankruptcy you need to save the £680 fee.

I guess in an IVA things happen quite quickly so there's just no point in paying creditors. You'll be paying the IP soon enough. Maybe the thought is that creditors may vote against the proposal if they are still being paid. I don't know

ByzantineByron

Thanks, turns out Halifax won't allow me to cancel direct debits unless I speak to them in person or call them so that's what I'll do. 

fatbelly

If you have online banking you can cancel a d/d in seconds

ByzantineByron

Just as an update, Money Advice through Bennett Jones got the IVA approved yesterday.

It will be a big change, but I'm going from having £11.41 a month after payments to pay for groceries and petrol to having £889, so it's night and day.

No changes to the initial proposal except creditors reserving the right to chase joint applicants for any debt, of which there are none.

Thanks for all the advice everyone, in the three weeks leading up to it I obviously stopped using any form of credit and it really opened my eyes to how much I was throwing money around that I just did not have, so I'm hoping this is the start of a long term change in my spending habits and living within my means.

Felt BN were good in explaining the conditions, especially as I have a side hustle painting Warhammer models and how the proceeds from that will be used to make extra payments to the IVA, which is fine ultimately. I can't have my cake and eat it too.

fatbelly

Thanks for reporting back