Debt advice ?
Hey,
Kinda embarrassing but i need some advice if possible.
Im currently in 24k worth of debt, 12k is a loan which comes out every month £280 at 6.9% apr, have currently paid off 5k in a year so far, however i have 3 credit cards 1 of which I'm paying interest on but I'm currently paying £700 a month on debt in total.
i earn £1600+ a month after tax, plus whatever commission i earn but I'm struggling to pay off these cards.
I guess the question is would an IVA bee good for me ? or do i need to be paying out more than whats coming in ?
Im sick of paying £700 + on debt a month and my credit rating is now not strong enough to get another loan. If i had another load id be fine. I also rent my own apartment and have just downgraded from living in a City Centre to the outskirts.
I know its my fault etc.. and my lesson has been well and truly learned
Kinda embarrassing but i need some advice if possible.
Im currently in 24k worth of debt, 12k is a loan which comes out every month £280 at 6.9% apr, have currently paid off 5k in a year so far, however i have 3 credit cards 1 of which I'm paying interest on but I'm currently paying £700 a month on debt in total.
i earn £1600+ a month after tax, plus whatever commission i earn but I'm struggling to pay off these cards.
I guess the question is would an IVA bee good for me ? or do i need to be paying out more than whats coming in ?
Im sick of paying £700 + on debt a month and my credit rating is now not strong enough to get another loan. If i had another load id be fine. I also rent my own apartment and have just downgraded from living in a City Centre to the outskirts.
I know its my fault etc.. and my lesson has been well and truly learned
0
Comments
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Have you thought about going on a DMP instead?
Step Change can help you.0 -
CanadianDream wrote: »Have you thought about going on a DMP instead?
Step Change can help you.
Does that affect your credit score the same way an IVA does ? like the 6 years before its off the credit report?
I have never missed a payment on anything and my score still isn't even that bad, I'm just not allowed to borrow anymore money.0 -
Not being allowed to borrow more is a good thing. IVA/DMP your credit history will be trashed for at least 6 years, but it will probably effect you for 10 years.
Before you think about defaulting on your current upto date debts do the PPI reclaim thing, sell everything your can, down value your car, reduce your monthly spending and overpay highest interest debt first.
Just being sick of making the repayments and not being able to borrow more is not a good enough reason to start the DMP/IVA route - if you are struggling to pay for essentials and living costs then that would be the time.
Good luck and report back.0 -
Hi AusAaron,
I would like to echo some of what foxy-stoat has said above and also say that before you default on any payments, I would suggest posting a SOA on here. You can find that on the DFW board as a "sticky". This will help people to understand whether the IVA/ DMP route is really suitable to help you, or could it more of a hindrance.
If the minimum payments are sustainable (and potentially over payable) then neither a DMP or IVA would suit you and instead you need to look at ways to clear the debts quicker. This could mean overpaying, but it would certainly mean no longer using the cards. Hopefully this helps,
Laura
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
I kinda get what the OP is asking.
Credit cards seem a never ending way of owing money.When you are in debt but still paying min payments on the cards it can make you feel trapped, card companies still let people rack up debt when the warning signs are there.0 -
I kinda get what the OP is asking.
Credit cards seem a never ending way of owing money.When you are in debt but still paying min payments on the cards it can make you feel trapped, card companies still let people rack up debt when the warning signs are there.
Agree 100% but the person spending the money needs to take control of their life, the credit card companies are not going to do that as they are offering a credit service - one which the person will pay for many times over.
Credit cards have their place, low or 0% balance transfers are useful but you need to plan to pay the debt off, not just park it until the deal ends, maybe to a shuffle or 2 but no longer than 3 years.
Cards with interest rate of 20% + should only be used to purchase food/fuel and clear it when the statement comes in, build your credit history up but dont pay interest. If you are then you are overspending. Doesnt matter if you have 1, 2 or 5 cards - your living outside of your means as one card gets full they get another and another and when the credit runs out, that is IVA/BR time - I know, I have done it.
If your in the spiral now then you need to get yourself an excel spreadsheet and budget your monthly bids/living costs with the minimum payments and work out how much you are left. No going out and enjoying yourself as you have already done that with the debt - just basic spending. Do the PPI claim thing, 0% interest shuffles, sell everything you can and throw all the money into the debts.
Most IVA's last 6 years so if it will take longer than that and you have no mortgage then its an option.0 -
I've seen a few posts recently that suggest that most IVA's are for 6 years, and I am not sure where this came from.
The vast majority of IVA's are for 5 years, exceptions being homeowners with equity, where it will normally be 6, and if the creditors specifically request 6 years. The debtor has to agree to that, but statistically speaking, such modifications are relatively rare.0 -
Ok, I meant the fallout from an IVA will last 6 years.0
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