Help, is an IVA right for me?!?

Annieareyouok · 24 September 2018 at 5:57PM

Hi everyone

First post here so bare with me if I’ve asked anything stupid.
I am in what I would call ridiculous amounts of debt. Circa £20k on credit cards loans and catalogues. I have been very stupid. I have a good job and take home about £1700 per month which is very stable, I currently live with my parents and pay about £250 a month rent to them.

My credit cards are maxed out and on high interest, I am finding it really hard to get through the month without needing to borrow money. It is getting to a point where I am starting to feel absolute disparity around this and I really need some help. My credit rating is horrendous!! I have been recommended an IVA by a friend. Basically, I am looking to move in with my partner in the next couple of months, I currently spend about £300 a month on petrol but when I move in with him this will go to next to nothing as he lives very close to my work. We have discussed and worked out that half the bills/rent on his flat will be about £400 a month. Which there is no way I’d be able to afford right now, and I feel like this debt is spiralling out of control and never ever going to go down.

Would an IVA be the right way to go? I understand it will affect my credit score for a few years however, my credit score is already awful and if there is light at the end of the tunnel I am prepared to work for it! I am only 27 so hoping I can get this debt all put to bed before I’m too old and this be a very expensive lesson.

Thanks for any help you can offer.

Fiona_CW · 24 September 2018 at 7:47PM

Go to Step Change website - you can fill in your details on there and they can recommend which debt solution is best for you

sourcrates · 24 September 2018 at 8:46PM

Hi,

Forget your credit score for starters.

Good advice to go to the stepchange website, an IVA may not be the best option, if your debts are below 20k a debt Relief Order may be a better choice.

RMJ20 · 24 September 2018 at 8:49PM

Definitely speak to Step Change they are life-changing. I've been where you are. 5-6 years in an IVA seems like forever when you're at the beginning but it is so worth it. Your stress goes and you get your life back on track. Well done for wanting to do something sensible about it.

Years_of_debt · 24 September 2018 at 8:55PM

In short if you want to pay 20k back go for an IVA. If you don’t want to pay your debts back take a DRO.
DRO is always best as your financially back to stage 1 after 12 months I.e you don’t owe a penny. Paying £400 a month for 60 months in an IVA is pointless if you can get it all wiped after 12 months on a DRO.

fatbelly · 24 September 2018 at 9:03PM

I think you need to get yourself into the new situation, maybe give it a few months to make sure it's going to be stable, then look at the numbers.

I am dubious about £400 covering half the rent and bills. In my area, that might just cover half the rent, but not half the council tax, electricity, water, gas, tv licence, phone and broadband. You will still have to buy food and clothes and I assume you're keeping the car so there is still the tax, insurance, MOT and some fuel. Add in something for health costs and gifts and maybe an insurance or two, and I don't think you'll have much left.

No I think it is unlikely that an IVA would be the best option, even if Debt Remedy says it is. As I see it you do not have any significant asset like a house or business to protect.

If you meet the criteria for a DRO:

•Must not be a homeowner,

• Debts less than £20,000,

• Can have a car worth up to £1000,

• No other assets of more than £1000,

• Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

• Cannot have had a DRO in last 6 years.

that would be your best option. Failing that, if your surplus repays your debts in under 5 years go for a debt management plan. If longer than that, bankruptcy

DannyPearce90 · 10 January 2019 at 9:29PM

I can't see how a DRO would be suitable with that level of income. A DRO would be referred to the Official Receiver and the same investigation would happen as happens within bankruptcy. This isn't a nice process to go through, all though it may be the right solution for some people.

Fatbelly is correct though. Stepchange promote IVA's as they charge bnetween £4500-£10,000+ for the fees. Even though they are official a "charity".

Explore the DRO. If you can get it, do it!

TubbyDown · 11 January 2019 at 11:19AM

Is that how much Stepchange charge! i thought they were supposed to be a debt charity!!!

fatbelly · 11 January 2019 at 1:43PM

All IVAs carry two sorts of fees. They do vary but each IP should be upfront and transparent about their fees

Mermaid89 · 11 January 2019 at 4:07PM

On an IVA it's not uncommon for the fees to be circa £5k+

Help, is an IVA right for me?!?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free