Advice to take out IVA or set up agreements with creditors ourselves

RAS

Any SOA done by a debt charity would use a similar value. If you don't want to share that, just add a tenner to some other categories.

fatbelly

It should not make a difference whether you do it yourself or use a fee-free firm like Stepchange or Payplan

You can use our soa but think about how a creditor would view things. Don't be afraid to fudge the figures in your favour and don't be over-generous

flower_girl_3

Can we use the MSE budget planner to send our SOA or can someone please put a link for a form creditors will accept.? 

We have now been in initial discussions with citizens advice bureau to get second opinion on our best route forward. 

My husband and I have been carefully going over our income and expenditure figure. The biggest challenge is putting down a realistic figure from my self employed earnings.  I’ve got regular clients so I’ve based income on that ( I’m a private tutor) I’ve calculated over 38 weeks as most are only term time and then added a 10% margin for cancellations. 

I’ve got a figure that is about as realistic as I can get ( can’t use last 3 years tax reports as I’ve had to reduce hours sure to increase of ME symptoms) 

RAS

You don't need to show creditors your SOA. After they default, they may retain in house, assign to a debt collector or sell the debt.

Whatever happens, you'll get a letter telling you how to pay. Most often this includes a reference number and details of the account number.

They may ask you to call to set up a payment. Don't as you don't want DDs. Just go into your own account and set up a SO that you can change as you need to.

Do reply telling them that you have health issues and your income is variable and not year round. 
 
I'd suggest that you use months when you get extra to build your emergency fund and a contingency for months you don't earn. If that builds up you could try full and finals, or just clear a small debt to make admin easier.

tigergambit

flower_girl_3 said:

An update: Last week my husband and I have worked out a realistic budget including my actual tax and NI payment for last tax year. I’ve managed to complete my tax return for 2024-2025 so I have a real figure. 

We are now able to contact our creditors, credit cards and loans, to make an offer of payment. 

Could we use the MSE spreadsheet we have used to help us ( what an amazing budget planner that actually captures real life) 
my only concern is that we have budgeted a realistic amount for Christmas and birthdays based on our income, bills and debt.  £50 a month.

I presume creditors would not accept this and would want that to be used as part of our money left over after priority bills and essential outgoings? 

Is there a different firm we should use and would it carry more weight if it was produced by a recognised debt agency? 

Make sure debts have defaulted before you speak to creditors. That's very important.You don't have to prove the accuracy of your SOA. They have no means of checking anything. It will pay you to have a think about your strategy now. 

Do you intend to pay off the full amounts over time or do you want to maintain a reasonable lifestyle and settle by F&F settlements down the line? If the latter then you need to pad out your SOA and share it so that you can start saving a settlement pot. In future years you share further SOAs showing increasingly difficult circumstances which develops a pattern for creditors and builds a plausible story to base your F&F on.

Either way this is a long game. Even waiting for defaults takes ages. You need to realise this and change your mindset accordingly if you haven't already.

Good luck with this. Always remember that you are now in control and don't be published around.

flower_girl_3

Thank you both for that input 

You have both introduced something I’ve not thought about. One of my creditors has already put my credit card account with them as ‘default’ and has passed it on to Westcot to recover money. 

I’ve not spoken to them yet but intend to this week 

my husband and I want to pay the amounts outstanding with our credit cards but not the interest. We have been in persistent debt for over a year and not making progress because of the interest charges. 

Can I clarify a few things.
my husband and I can access each credit card account and set up a standing order for an affordable amount 
do we need to speak to the creditor (credit cards) before we do this?
should we send each a letter to make the offer and ask if they can freeze or reduce interest?

the difficulty comes for my husband especially as the credit card ring up and then they was to go through a financial assessment over the phone - HSBC was particularly pushy and wouldn’t let me be involved in the call ( my husband wears hearing aids but still has difficulties with certain accents and also struggles to process new information quickly - we told them that at the start of the call but the call handler was really difficult about it) 

Grumpelstiltskin

So you are thinking of paying off the debt with a credit card?

If so that is a big no, you should not be using  any form of credit  whilst you are paying the debts off.

sourcrates

Grumpelstiltskin said:

So you are thinking of paying off the debt with a credit card?

If so that is a big no, you should not be using  any form of credit  whilst you are paying the debts off.

No, the OP was referring to their credit card accounts, and wanting to repay them, not pay them with a credit card, you can`t do that anyway lol.

sourcrates

flower_girl_3 said:

my husband and I want to pay the amounts outstanding with our credit cards but not the interest. We have been in persistent debt for over a year and not making progress because of the interest charges. 

Then you are best off following the advice on this forum and letting your creditcard accounts default.

Once defaulted all interest is stopped, and whatever you choose to pay towards the debt, goes to reducing your balance.

Banks can only make temporary arrangements to stop or reduce interest whilst the account is active, as you are both still governed by the credit agreement you signed, until you default on that agreement, no permanent solution will be available, once defaulted, all options are open.

Grumpelstiltskin

sourcrates said:

Grumpelstiltskin said:

So you are thinking of paying off the debt with a credit card?

If so that is a big no, you should not be using  any form of credit  whilst you are paying the debts off.

No, the OP was referring to their credit card accounts, and wanting to repay them, not pay them with a credit card, you can`t do that anyway lol.

OK Sorry, my brain isn't 100% in gear today.