IVA / Debt Advice Please

SteadyEddy22

Hello everyone.

I’m looking for some advice on how to move forward with my current debts. I have been reading through the forums for a couple of weeks and there always seems to be good advice, so I’m hoping I have put this in the right place!

Currently have outstanding debts totalling approx. £77k. It all initially started with Covid, I’m self-employed and required a credit card to get by for the majority of the year. Also, as Covid struck, me and partner had just exchanged on our first home (which we went all in for not knowing what was coming with the lockdowns etc.). Anyhow, I had my own payment plan to get on top of things but things just spiralled. No one to blame but myself as I feel I was fairly reckless in the sense that I wasn’t watching my money as I should have. But not reckless in the sense that I was spending it on holidays etc. Eventually this has led to me getting loans out to pay other debts.

Now I am back to using credit cards just to get by with the basics – food, clothes and just general bits, as all my money goes towards my share of the bills and my monthly payments (to note I have never missed a single payment).

I now just want to get out of it and from the research I have been doing I think an IVA is the only solution.

One of my main concerns is losing the house if I were to go the IVA route, although I have constantly read that they cannot make you sell the house/remortgage to pay off the debt. Our outstanding mortgage value is currently £293,500. But we have a Help to Buy on the property which is 20% of the value of the house. The estimated value of the property, according to our mortgage page, is £518,000. But the same house type on my estate has recently gon on the market at £500,000. And a close friend of mine who is an experienced estate agent thinks it would be at most £480,000 (sorry I’m not sure if any of this information helps). It is also a joint mortgage.

In regards to my self-employment – I am CIS which means the people I work for/with stop 20% of my earnings for the tax man. Which usually results in a £1-2k rebate depending on expenses. The last tax year my turnover was £60500, so was averaging around £4000 take home a month. But the project I was running stopped in September, and the new project I am on now means I only take home around £3800 a month. Hoping that later In the year that will increase back to around £4000.

So I really want to get on top of this asap. I was not aware of an IVA, or any of the solutions/help you can get to be honest. Thus being the reason I have continued to make my monthly payments and carry on the debts. I just always assumed it would be bankruptcy and lose the house. Suppose you could say I just buried my head in the sand. I’m extremely ashamed of the situation I have put myself in, mainly for my family, as I feel I have let them down.

I have filled out the budget expense using the tool recommended and copied below. We are a family of 3 with a dog, and my partner is currently pregnant with our second child due later this year. Also to add that we have always shared the bills on a percentage basis, to ensure we are left with equal amount spending money each (not so much recently as it has just been about getting by). So, my partner would be due half of what is left from the joint income after outgoings. All debts are my own and un-secured.

 

Any help and advice will be much appreciated. Thanks all.

SteadyEddy22

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 3800

Partners monthly income after tax....... 1500

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 5300[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 1390

Secured/HP loan repayments.............. 129

Rent.................................... 0

Management charge (leasehold property).. 40

Council tax............................. 307

Electricity............................. 100

Gas..................................... 100

Oil..................................... 0

Water rates............................. 122

Telephone (land line)................... 0

Mobile phone............................ 60

TV Licence.............................. 15

Satellite/Cable TV...................... 80

Internet Services....................... 35

Groceries etc. ......................... 700

Clothing................................ 80

Petrol/diesel........................... 0

Road tax................................ 0

Car Insurance........................... 78

Car maintenance (including MOT)......... 24

Car parking............................. 0

Other travel............................ 80

Childcare/nursery....................... 150

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 40

Pet insurance/vet bills................. 50

Buildings insurance..................... 11

Contents insurance...................... 11

Life assurance ......................... 0

Other insurance......................... 50

Presents (birthday, christmas etc)...... 50

Haircuts................................ 90

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 100

(Unnamed monthly expense)............... 0

Dry cleaning............................ 30

Work meals.............................. 50

nappies and baby items.................. 80

Car lease............................... 450

Partners debt........................... 100[b]

Total monthly expenses.................. 4602[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 518000

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 518000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 293500...(1390).....0<

Help to buy....................100000...(129)......0[b]

Total secured & HP debts...... 393500....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Barclaycard....................8650......250.......0

Barclays Overdraft.............3000......60........0

Very catalogue.................5000......290.......0

Barclaycard business...........1900......65........0

Admiral money loan.............38554.....501.......0

Vanquis Credit Card............2650......30........0

Lendable loan..................14029.....271.......0

MBNA...........................1500......50........0

HSBC...........................2000......50........0[b]

Total unsecured debts..........77283.....1567......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 5,300

Expenses (including HP & secured debts). 4,602

Available for debt repayments........... 698

Monthly UNsecured debt repayments....... 1,567[b]

Amount short for making debt repayments. -869[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 518,000

Total HP & Secured debt................. -393,500

Total Unsecured debt.................... -77,283[b]

Net Assets.............................. 47,217[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Grumpelstiltskin

OK Being self employed have you spoken to Business Debt Line?

Basically if you can't afford to pay your unsecured debts stop paying them.

Some of your SOA could be tweaked, £700  groceries, £80 TV, clothes, dry cleaning work meals ( on top of the large grocery  spend)

You also need to separate any business debts from your personal debts.

sourcrates

I`ll move this to debt free wannabe for you, as it won`t see much traffic on the IVA board.

SteadyEddy22

Hello @Grumpelstiltskin

Thanks.

I haven’t spoken to them yet, but will be phoning them tomorrow. They were closed over the Christmas break. I have done the budget on their site though and have pretty much copied across from their template budget, which has groceries and the other items as separate. Reason for the high grocery budget to some degree is allergies / intolerances my partner and child have. Buying free from stuff is not cheap and does actually add quite a bit to the food bill. But, it could and will be tweaked. Also the creams my child uses are speacilist creams due to sensetive skin, and these are not cheap either. From what I read on the business debtline advice is to just put what you estimate the budget to be. I think I will have a better understanding once I speak to them tomorrow.

sourcrates

Basically how this debt management process works is you stop paying your non priority debts, as you can`t afford them, and its silly to keep plodding on regardless.

Ideally you let everything default, by non payment, as that ensures all interest stops etc, I`m not sure how this will work with business debts, you may be wiser after speaking to Business debtline.

Next you work out what you need to live on, your essential spending, rent/mortgage/council tax/ utilities/food/transport etc etc, you should also budget for some savings if you can, as that can help to settle some or all of what you owe, further down the line.

What is left goes towards your non priority debts, so if you have say £400 disposable income left over you then split that amount between your creditors, and continue with that until you either pay it off, or can get a settlement on the debts.

Now you can do this yourself if you wish, its very easy and simple to do, and you retain all control over matters.

Brie

Well done for posting.  It's a good start.

Questions - no child benefit?  no petrol or diesel or is the car electric?  Also do you watch live TV or use iPlayer at all?  If not cancel your TV licence as it's not required.  If you do watch live, can you cancel some of the other TV services?

ManyWays

The very large admiral loan, how long ago did you take that? was it for consolidation or a business loan? Admiral would have a veto over an IVA, a good IVA firm such as Payplan would know if they are likely to use it. 

When does your mortgage fix end and is it likely to go up or down at that point?

Previously you earned too much to get child benefit, you may now be under that. Worth looking into.

I think talking to Business Debtline is a very good idea. I dont think IVAs are a good option if your income may go up a lot, but see what they say.  Also be clear when your partner will be on maternity leave to them, as that impacts as well. 

SteadyEddy22

sourcrates said:

Basically how this debt management process works is you stop paying your non priority debts, as you can`t afford them, and its silly to keep plodding on regardless.

Ideally you let everything default, by non payment, as that ensures all interest stops etc, I`m not sure how this will work with business debts, you may be wiser after speaking to Business debtline.

Next you work out what you need to live on, your essential spending, rent/mortgage/council tax/ utilities/food/transport etc etc, you should also budget for some savings if you can, as that can help to settle some or all of what you owe, further down the line.

What is left goes towards your non priority debts, so if you have say £400 disposable income left over you then split that amount between your creditors, and continue with that until you either pay it off, or can get a settlement on the debts.

Now you can do this yourself if you wish, its very easy and simple to do, and you retain all control over matters.

My concern about a DMP was that from what I read you are not contracted to anything, and they can come for you at anytime. A priority for me is that the house is secure and cannot be taken. Probably an impossible question to answer - but how likely is it one of the debtors would push for this during a dmp?

Also at £400 a month it would take around 17 years, providing interest is stopped on the debts, so I assumed would get rejected. I will likely top-up the payments as and when, but initially would the £400 not put them off? Or do they legally not have much say on a dmp if it is all I can afford? Sorry for the question.

Thanks.

SteadyEddy22

ManyWays said:

The very large admiral loan, how long ago did you take that? was it for consolidation or a business loan? Admiral would have a veto over an IVA, a good IVA firm such as Payplan would know if they are likely to use it. 

When does your mortgage fix end and is it likely to go up or down at that point?

Previously you earned too much to get child benefit, you may now be under that. Worth looking into.

I think talking to Business Debtline is a very good idea. I dont think IVAs are a good option if your income may go up a lot, but see what they say.  Also be clear when your partner will be on maternity leave to them, as that impacts as well. 

The Admiral Loan was taken out in May 2025, for £25000 to consolidate other debts. It shows as £38000 outstanding on the app when I log in with interest added.

We have recently remortgaged in October and the payments went up about £500 as we had a really good interest rate before. So this hasn’t helped.

Yes sorry we do get child benefit. My turnover is above the threshold, but when I do my tax return and add my expenses it drops below the threshold.

Ok will do, thanks. I don’t think it will go up a significant enough amount for it to sway my decision. But will see what Business Debtline say tomorrow.

Thanks.

SteadyEddy22

Brie said:

Well done for posting.  It's a good start.

Questions - no child benefit?  no petrol or diesel or is the car electric?  Also do you watch live TV or use iPlayer at all?  If not cancel your TV licence as it's not required.  If you do watch live, can you cancel some of the other TV services?

Thank you.

Yes sorry we do get child benefit. The car is electric so goes through our electric bill. We do watch live tv, and unfortunately im in a contract with Sky until January 2027 but i do not plan on renewing as it is massively overpriced in my opinion.