IVA advice

Biscuitdunk24

Hi all,

I’ve just set up an IVA with Payplan and made my first payment this month. I’m starting to worry that I may have done the wrong thing and perhaps looked into DROs instead. I did my budget with PayPlan - previously had a DMP via StepChange but this was going to take me 11+ years to repay. My total debt is £34k and my only asset is my car which is valued on we buy any car for approx £4K. I live with my partner in his home - I’m not on the mortgage and we have no formal financial ties such as bank accounts etc. I think I rushed into the IVA as I just needed to try and resolve things and wanted the constant financial anxiety to stop. I was told that a DRO was no good for me as I had over £75 in disposable income. Before I moved into my partners house we had work done to it to make it big enough to fit us and the kids. We borrowed approx £8k from his dad to do this. I am liable for half of this (so £4K) at the minute he knows about my financial situation and has held off asking for the money but we do need to start repaying ASAP. I mentioned this to PayPlan but they said as I’m not currently paying it wouldn’t be factored into my budget, and if I was to start paying I’d be expected to cut back on other areas in order to afford it. The debts were caused by the breakdown of my marriage - took a lot of credit out in my name for ex husband who is denying any ownership of debts. This was coupled with moving into my own rented home with nothing for me or the kids so everything needed to be bought from scratch and it spiralled from there. I shouldn’t have buried my head in the sand about it and I have had periods of poor mental health in recent years too. I just need some advice as to if I’ve done the right thing or made a mess of my finances again. 

Grumpelstiltskin

I think you may have panicked and gone into the IVA too quickly.

Just because a DMP was showing to take 11 years with the flexibility of a DMP things could change and it would take less time than you think.

What do you do now?  Well you have 2 choices, carry on with the IVA or cancel your payment and let it fail.

sammyjammy

Was there no financial settlement with your divorce where your ex took on part of the debt even if it was all in your name?

Biscuitdunk24

sammyjammy said:

Was there no financial settlement with your divorce where your ex took on part of the debt even if it was all in your name?

No - at the minute we are going through the divorce process. We had no joint assets - we have children together but he doesn’t pay maintenance. They split the time 50/50 between us as he didn’t want to pay maintenance. He earns substantially more money than me but it’s never been something I’ve pursued.

RAS

In which case you really need to see a good divorce solicitor, preferably one keen on mediation. Debts you've accrued sine moving on may not be relevant but you ex's and your own pensions, any assets either of you own are counted as part of the settlement.

As are debts your took out debts to cover joint assets and activities and the fact that he is the higher earner, even if he's not paying maintenance.

ManyWays

How much are you paying to the IVA?

Biscuitdunk24

ManyWays said:

How much are you paying to the IVA?

£228 each month

ManyWays

If you can afford anything close to £228 then you arent likely to be eligible for a DRO, not even with some tweaking, Payplan were right.