Debt advice - Jumped the gun with IVA, Relationship complication

stuckinarutt2025

Hi everyone, I'm looking for some guidance if possible.

My total debt is around £28,000, and I'm a few months behind on two loans and three credit cards (I’ve only just received a default notice this month). I explored an IVA because I’ve been unable to make full payments to my creditors following a substantial increase in my mortgage last September due to the BOE rate changes — the increase was £600 per month.

I’ve been working with PayPlan and have a creditors' meeting scheduled for 29 May. However, I’m now having second thoughts and wonder if I’ve gone for quite an extreme option. My relationship has also been affected by the debt situation, and I’m not sure it will survive. If we end up selling the house, I’m concerned that the debt plus IVA fees could completely wipe out any equity I’d be entitled to — which would make starting over much more difficult.

Reading through the forums, I’ve seen that some people are self-managing a DRP and offering token payments to their creditors. Could this be a better option, considering how my circumstances are changing? And do any of you have experience or thoughts on whether I might have jumped into an IVA too quickly?

Grumpelstiltskin

Yes you have jumped too quickly, you need to check all possible avenues before you agree to an IVA.

Cancel now, today, and come back for further help.

stuckinarutt2025

Thank you for this. I suspected I may have jumped straight to the most severe option.

I’ve contacted PayPlan to request that this action be paused. I’d greatly appreciate any guidance on the next steps to take. I’ve started looking into a self managed DRP using the 'NED' Citizens Advise website, which seems to come highly recommended on these forums.

Grumpelstiltskin

If you are going to go self managed you need to stop paying all unsecured debts and wait for them to default, in the mean time save as much as you can towards a fund to cover emergencies and possible settlements.

Token payments just prolong the agony, so don't do them.

Do you have any joint accounts with your partner? are they named on the mortgage?

Answer these questions please.

stuckinarutt2025

OK, thank you — I won’t make any token payments at this time.

We have a joint account for bills and another for food shopping, but my debts are not with the banks these accounts are held with.

We also have a joint mortgage. The debt has been a point of tension, which ties into the relationship issues I mentioned earlier. This is partly why I wanted to pause the IVA — depending on whether we’re able to resolve things, the long-term outcome might be that we have to sell the house if we separate.

ManyWays

You definitely do not want an IVA if your relationship is rocky and the house may have to be sold.

In addition to Grump's questions, can you post a Statement Of Affairs please. https://www.stoozing.com/soa.php

 

stuckinarutt2025

Thank you here is the Statement of Affairs as requested:

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary	Amount(£)
Total monthly income	2,018
Monthly expenses (incl. HP & secured loans)	1,978.54
Available for debt repayments	39.46
UNsecured debt repayments	0
Amount left after debt repayments	39.46

Personal Balance Sheet Summary	Amount(£)
Total Assets (things you own)	403,000
Total Secured & HP Debt	-334,593
Total Unsecured Debt	-25,895
Net Assets	42,512

Household Information

Number of adults in household	2
Number of children in household	0
Number of cars owned	0

Income, Expense, Debt & Asset Details

Income	Amount(£)
Monthly income after tax	2018
Partners monthly income	0
Benefits	0
Other income	0
Total monthly income	2018

Expenses	Amount(£)
Mortgage	1051
Secured/HP loan payments	0
Rent	0
Management charge (leasehold property)	0
Council tax	100
Electricity	42
Gas	42
Oil	0
Water Rates	30
Telephone (land line)	0
Mobile phone	174
TV Licence	15
Satellite/Cable TV	92
Internet services	53
Groceries etc.	220
Clothing	50
Petrol/diesel	0
Road tax	0
Car Insurance	0
Car maintenance (including MOT)	0
Car Parking	0
Other travel	40
Childcare/nursery	0
Other child related expenses	0
Medical (prescriptions, dentists, opticians etc.)	20
Pet Insurance/Vet bills	0
Buildings Insurance	14.54
Contents Insurance	0
Life Assurance	25
Other Insurance	0
Presents (birthday, christmas etc.)	10
Haircuts	0
Entertainment	0
Holiday	0
Emergency Fund	0
Total monthly expenses	1978.54

Secured & HP Debt Description	Debt(£)	Monthly(£)	APR(%)
Mortgage	334593	(1051)	0
Secured & HP Debt totals	334593	-	-

Unsecured Debt Description	Debt(£)	Monthly(£)	APR(%)
Marks & Spencer Loan	13489	0	0
Tesco Bank Loan	6913	0	0
Creation Loan	462	0	0
Paypal Credit	992	0	0
MBNA Card	784	0	0
John Lewis Card	1224	0	0
Dividebuy Loan	2031	0	0
Unsecured Debt totals	25895	0	-

Asset Description	Value (£)
Cash	0
House Value (Gross)	403000
Shares and bonds	0
Car(s)	0
Other assets (e.g. endowments, jewellery etc)	0
Total Assets	403000

stuckinarutt2025

For context I have added my percentage of the household expenditure (30%).

fatbelly

An IVA is a 5 or 6 year plan and if you sell property during the term you could easily end up paying the debts in full plus the IP fees. 

On your soa I cannot see how you can make any sensible offer of payment.

How much are Payplan proposing that you pay?

stuckinarutt2025

The payment I was going to make to Pay Plan in the IVA was £61.00.

stuckinarutt2025

There would be some wiggle room in my contribution to food shopping/the travel cost (petrol), but yes I agree that amount would be tight.