DRO/IVA/Bankruptcy advice

Dazed_n_Confused99

Hello 

I'm desperately trying to get some advice DRO/IVA/Bankruptcy having gone around in circles!

After speaking to Step Change, I was advised to take the option of a DRO to clear my debt. However, when speaking to Money Wellness (the company Step Change advised I speak to to arrange this), I was told that I wouldn't be eligible for a DRO and that my best option would be an IVA. After going through all my income/expenditure and debts yet again I was then eventually told a few days later that they were unable to assist me with this, as they didn't think enough of my debtors would agree to an IVA. They advised that my only options were to go with a debt management plan (something I really don't want to do) or file for bankruptcy.

The main issue which appears to be preventing me from taking either option is the fact that I pay for a salary sacrifice car via my employer and shows on my pay slip as 'lease vehicle'. It is technically a company car (i.e. I incur BiK tax) and I am tied in for having the lease payment deducted from my salary (before tax) until the lease expires in mid 2026, so can't get out of paying this unless I leave my job. I have £1k deducted but because of the tax / NI savings in reality this works out to £650 pm (I know this still a lot but at the time I could afford it, as I was still with my ex-wife at the time who had an income each month).

The other issue is the fact that I pay around £250-300 a month for my kids football/after school clubs despite also paying £1000 pm child maintenance (I have 3 kids), and they believe this will be disputed by my creditors when applying for an IVA.

Having gone through my budget with Step Change I'm left with only £3 pm. I had to do the same with Money Wellness and with a bit of cutting back they managed to get this up £85 pm (so I would be eligible for an IVA).

I have spoken to Citizens Advice and they have booked a telephone appointment to go through my situation further but this isn't for another month, as that is the earliest appointment they have.

Can anybody give me some advice on what I should look to do and what my options are? I'm not averse to going bankrupt but both Step Change and Money Wellness both strongly advised against this originally, saying that I was at risk of being hit hard on the amount I would be expected to pay back each month and that I could risk having my salary sacrifice vehicle taken off me.

As this is a company car and I'm stuck with paying for it can this happen and could it even mean that I lose my job over it? Also; would paying for my kids football/sports clubs been seen as excessive? Their mum simply won't be able to afford to pay for these as she is on benefits and I really don't want them to not be able to continue, especially as two play football at an elite level.

Some details about my debt and income:-

I earn £73k PA (£6,125 pm) However, my take home pay is £3,450 due to the car and normal deductions.

My debts total circa £37k (mainly credit cards).

I can provide full details of my income/outgoings from my Step Change plan if needed.

Sorry for such a long post but I'm at my wits end trying to get out of the situation I'm stuck in and keep getting passed from pillar to post.

Thanks 

Grumpelstiltskin

Can you answer this please.

Do you rent or have a mortgage?

ManyWays

When this lease ends, will you have an option of taking a much cheaper one?

Dazed_n_Confused99

Grumpelstiltskin said:

Can you answer this please.

Do you rent or have a mortgage?

I rent. Thanks

Dazed_n_Confused99

ManyWays said:

When this lease ends, will you have an option of taking a much cheaper one?

I will have the option of a cheaper car but I'm not sure how much less

Grumpelstiltskin

OK I think you will have enormous problems convincing your creditors that you have to pay so much for your children.

The amount you pay how does it work out with the gov.uk website?

Calculate your child maintenance - GOV.UK (www.gov.uk)

Dazed_n_Confused99

Grumpelstiltskin said:

OK I think you will have enormous problems convincing your creditors that you have to pay so much for your children.

The amount you pay how does it work out with the gov.uk website?

I have previously used this calculator and it says the estimated amount is £1,055 pm

Grumpelstiltskin

OK Then that is what you should pay and not pay for anything else on top of that.

Dazed_n_Confused99

Grumpelstiltskin said:

OK Then that is what you should pay and not pay for anything else on top of that.

Ok, thanks. However, unless I'm forced to I won't stop paying for them to continue being able to play football

Grumpelstiltskin

You can't afford to pay that so you will have to make a decision, could you increase your income to cover the cost? or do you want to get further into debt?

OK Could you complete a honest SOA.

https://www.lemonfool.co.uk/financecalculators/soa.php

and we can see if there are any suggestions to reduce expenditure.

sourcrates

An IVA would be madness, Bankruptcy insane, a DRO impossible due to the car and your spending.

Debt management plan ticks all the boxes, why are you so adverse to it?

You can continue to make payments for your kids, you have a high wage, so its just a case of paying what`s affordable over a longer period of time, thus retaining your current spends, albeit according to budget, repaying your debts, and you retain control.

what`s not to like about that?