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  • FIRST POST
    • garym1977
    • By garym1977 13th Sep 18, 9:23 AM
    • 12Posts
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    garym1977
    IVA and 2 credit cards
    • #1
    • 13th Sep 18, 9:23 AM
    IVA and 2 credit cards 13th Sep 18 at 9:23 AM
    Hi.

    This is my first post.

    I have two years left on my IVA. Due to being too ashamed to tell my IP that I couldn't afford to live, I now have two credit cards on top of my IVA.

    My question is this.

    Should I inform my IP about the situation and come clean, or should I try and deal with the credit card company myself and try to keep up with the IVA?

    I feel rotten that I have put myself in this situation but am willing to do as much as I can to settle my debt. I find it impossible to speak over the phone to creditors. It is my silence that has contributed to my position.

    Any advice would be greatly appreciated.

    Many thanks in advance.
Page 1
    • PrettyKittyKat
    • By PrettyKittyKat 13th Sep 18, 9:05 PM
    • 629 Posts
    • 595 Thanks
    PrettyKittyKat
    • #2
    • 13th Sep 18, 9:05 PM
    • #2
    • 13th Sep 18, 9:05 PM
    Your credit cards are a breach of your IVA (I presume they total more than 500 and you haven't received permission to have them). However, you are not the first and won't be the last to do this.

    If your IVA is unaffordable you MUST speak with your IVA company to ensure your I&E is up to date and discuss options. There are ways that your payment into an IVA can be reduced.

    How much are your IVA payments and how much debt do you owe to your two credit cards? Once I know this I will be able to give more specific advice
    • garym1977
    • By garym1977 14th Sep 18, 3:46 PM
    • 12 Posts
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    garym1977
    • #3
    • 14th Sep 18, 3:46 PM
    • #3
    • 14th Sep 18, 3:46 PM
    Hi. Thank you for your reply.

    My IVA payment is 120 a month and the two credit cards total 6000. I could manage the IVA on its own. Its the credit cards that I can't. That's why I wondered if it was worth tackling the credit card company (Vanquis) on my own.
  • National Debtline
    • #4
    • 14th Sep 18, 4:24 PM
    • #4
    • 14th Sep 18, 4:24 PM
    Hi Gary and welcome to the forum


    If you ran up the credit card debts because the IVA payments were not leaving you enough to live on, it suggests that the credit card payments are not the only problem here. Certainly start with a statement of affairs (SOA) to see what your normal income and outgoings are before paying any of your debts http://www.stoozing.com/calculator/soa.php.


    Sometimes it is possible to add extra debts into an IVA, but that would depend whether your other creditors found that reasonable. I would recommend contacting one of the free debt advice agencies for some impartial advice on what to do next.


    Best wishes


    Susie
    @natdebtline
    We 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 Steps
    • garym1977
    • By garym1977 14th Sep 18, 6:03 PM
    • 12 Posts
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    garym1977
    • #5
    • 14th Sep 18, 6:03 PM
    • #5
    • 14th Sep 18, 6:03 PM
    I did contact StepChange a while ago but they told me the only advice they could give was to tell my IP. Would I need to do this in writing or would I have to speak to them? I am paying the debts at the moment but falling behind with rent and buying food daily because I can't afford a weekly shop. A crash is looming.
    • PrettyKittyKat
    • By PrettyKittyKat 14th Sep 18, 7:57 PM
    • 629 Posts
    • 595 Thanks
    PrettyKittyKat
    • #6
    • 14th Sep 18, 7:57 PM
    • #6
    • 14th Sep 18, 7:57 PM
    I agree with National Debtline. You have accrued more debt since starting your IVA than you have paid off, this shows that the IVA is not suitable. Unaffordable most likely, possibly coupled with not changing your spending habits.

    There is no point trying to keep up with the IVA and the credit card repayments, you will only get yourself into more trouble.

    Ringing and speaking with your IP for advice would be best.

    Your IVA payment is already very low, so the options I was thinking of would not be suitable.

    I think it would be best for you to consider other debt solution options such as DMP or bankruptcy. Would these be suitable for you?
    • garym1977
    • By garym1977 14th Sep 18, 10:24 PM
    • 12 Posts
    • 0 Thanks
    garym1977
    • #7
    • 14th Sep 18, 10:24 PM
    • #7
    • 14th Sep 18, 10:24 PM
    Thank you for your replies.

    I have read about bankruptcy and it scares me too much, although I don't have any assets that are worth anything. Besides, I wouldn't be able to find the setup fee. I don't know how a DMP works. I will have to research it.

    How can I explain to my IP what a mess I've made? Won't they just fail my IVA instantly?
    • Craig1981
    • By Craig1981 15th Sep 18, 5:58 AM
    • 307 Posts
    • 135 Thanks
    Craig1981
    • #8
    • 15th Sep 18, 5:58 AM
    • #8
    • 15th Sep 18, 5:58 AM
    Hi Gary

    if you could manage the IVA payments on its own, what is the 6k debt for on the cards?

    DMP is similar to the IVA you are currently on - however it is an agreement between all your creditors to freeze interest and make payment until ALL debt paid in full. So means monthly payments but will take you more than how long an IVA would do. (DMP can run for indefinite amount of years)

    I cant see any other option for you but a bankruptcy for all debt. Notching up 6k in debt while on an IVA of 120 pcm, definitely means you need to look at spending habits as well, or the advice given to apply for the IVA was incorrect. however, if you used Stepchange, i don't think this would be the reason

    either way, you must look at budgeting advice from a debt charity
    • PrettyKittyKat
    • By PrettyKittyKat 15th Sep 18, 9:41 AM
    • 629 Posts
    • 595 Thanks
    PrettyKittyKat
    • #9
    • 15th Sep 18, 9:41 AM
    • #9
    • 15th Sep 18, 9:41 AM
    Your IVA won't fail instantly, so don't worry. They will likely tell you that you are in breach (which you are) and should send you a letter of breach which gives you 30 days to rectify it (not all bother with this but they should do!). Within that 30 days to rectify the breach you would need to pay off the credit card debt or put a plan in place to do this, which is isn't something you can do.

    What is it about bankruptcy that scares you? It certainly seems the best option if you have no assets.

    It would take you around 6 months to save the bankruptcy fee if you stopped paying your IVA payment and paid it for the bankruptcy instead. It would take a few months for the process of the IVA failing anyway (Particularly if you didn't disclose the additional credit straight away and just stopped paying as you are only in breach after 3 missed payments) so you could save the money in that time.

    Debt management plan is an (not legally binding) agreement between you and your creditors to pay reduced payments. You repay 100% of the debt with a DMP so it can take many years, however interest and charges should hopefully be stopped. It can be useful as a temporary solution if you think your circs may improve and you will have more disposable income to manage your payments or complete an IVA successfully.
    • garym1977
    • By garym1977 15th Sep 18, 10:30 AM
    • 12 Posts
    • 0 Thanks
    garym1977
    Thank you for your advice. It is much appreciated.

    The 6,000 credit card debt is a result of comfort spending to address emotional / personal issues between me and a close family member. I don't feel as though I can disclose any more information than that on a public forum. I am not trying to excuse myself, just telling the truth as much as I can.

    The thing that scares me most is actually speaking over the phone to my insolvency practitioner and owning up to what I've done. The fear of that make it impossible for me to face. Can I do it in writing?

    Once again, thanks for your help.
    • ToxtethO'Grady
    • By ToxtethO'Grady 15th Sep 18, 10:33 AM
    • 129 Posts
    • 70 Thanks
    ToxtethO'Grady
    Hi Gary


    Shows how responsible lending is a cornerstone of Vanquis policies, when your details would show on the Insolvency Register for your IVA!


    The advice you've been given by PKK is probably the best option, you might have an IPA for 3 years with BR but at least your debts would be gone.
    • Craig1981
    • By Craig1981 15th Sep 18, 11:30 AM
    • 307 Posts
    • 135 Thanks
    Craig1981
    Shows how responsible lending is a cornerstone of Vanquis policies, when your details would show on the Insolvency Register for your IVA!
    Originally posted by ToxtethO'Grady
    Disagree slightly - they are good provider for building your history back up - i got my vanquis within 18 months of the start of my IVA. I however didnt overspend and used it for the purpose of rebuilding, like they designed to do
    • garym1977
    • By garym1977 15th Sep 18, 12:51 PM
    • 12 Posts
    • 0 Thanks
    garym1977
    It looks like my best course of action then is to stop paying my IVA and my credit cards and save up to apply for bankruptcy. Do I inform my IP (Aperture) that I want to stop my IVA or should I just stop payments and if I go this route, will I owe Aperture any money?

    Also do I inform Vanquis that I intend to file for bankruptcy and can no longer pay them or does all of this have to be done through an insolvency practitioner?
    • sourcrates
    • By sourcrates 15th Sep 18, 2:10 PM
    • 15,269 Posts
    • 14,362 Thanks
    sourcrates
    It looks like my best course of action then is to stop paying my IVA and my credit cards and save up to apply for bankruptcy. Do I inform my IP (Aperture) that I want to stop my IVA or should I just stop payments and if I go this route, will I owe Aperture any money?

    Also do I inform Vanquis that I intend to file for bankruptcy and can no longer pay them or does all of this have to be done through an insolvency practitioner?
    Originally posted by garym1977

    Hi,


    I would just stop paying, nothing will happen quickly, you can write and explain the situation as and when you see fit to do so.


    Aperture take their fee from your payments, it could be at some point fee`s may be owing, but if your going bankrupt, that may take care of them.


    Again with vanquis, nothing happens quickly, in the time it takes you to save the fee the card account will likely still be with collections.


    You can apply for bankruptcy online only, here :


    https://www.gov.uk/apply-for-bankruptcy
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Free Legal advice see : http://legalbeagles.info/
    • garym1977
    • By garym1977 15th Sep 18, 2:45 PM
    • 12 Posts
    • 0 Thanks
    garym1977
    I have been researching bankruptcy on the Citizens Advice website and it seems a scary option to me.

    What will happen if I carry on scraping by to pay the IVA and ask Vanquis for some time to see if my situation improves or pay them back when my IVA ends and give them a token payment in the meantime?

    When I check my Vanquis statements, I have paid at least two thirds of what I have borrowed already. Would they settle for getting the rest of their original money back in time rather than not at all?
    • Craig1981
    • By Craig1981 15th Sep 18, 3:47 PM
    • 307 Posts
    • 135 Thanks
    Craig1981
    the longer you wait, the longer it will take to be discharged and cleared from bankruptcy

    sorry to say, but dont try to delay the inevitable, unless you have more work hours/pay increase guaranteed income on the horizon
    • sourcrates
    • By sourcrates 15th Sep 18, 4:20 PM
    • 15,269 Posts
    • 14,362 Thanks
    sourcrates
    I have been researching bankruptcy on the Citizens Advice website and it seems a scary option to me.

    What will happen if I carry on scraping by to pay the IVA and ask Vanquis for some time to see if my situation improves or pay them back when my IVA ends and give them a token payment in the meantime?

    When I check my Vanquis statements, I have paid at least two thirds of what I have borrowed already. Would they settle for getting the rest of their original money back in time rather than not at all?
    Originally posted by garym1977

    It is an option, but as you are struggling already, it would not be sustainable, bankruptcy is not much different to your IVA, just a different procedure to go through, and its pretty much guaranteed, no what ifs or may be`s.


    The only real difference is that your bank account may be frozen, so you may need to get another basic account, or keep plenty of cash available, and you have a telephone interview with the OR to discuss your budget (do it correctly this time) and potential IPA, that's it really, after 12 months your discharged, you may have to pay an IPA for up to 3 years (if you have more than 20 disposable income), your bankruptcy, as with your IVA, would be on the insolvency register for the duration, and on your credit file for 6 years.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Free Legal advice see : http://legalbeagles.info/
    • garym1977
    • By garym1977 15th Sep 18, 5:54 PM
    • 12 Posts
    • 0 Thanks
    garym1977
    Won't Aperture make me bankrupt when they know about the credit cards? I've got a feeling they will.

    The thing that worries me about bankruptcy is that it says that some landlords won't let you stay in rented property if you are made bankrupt. I don't know if this applies to a council house. I have been late with my rent and council tax regularly.

    I'm not sure.

    It looks like bankruptcy is my only option but will have to do.plenty of research first.
    • sourcrates
    • By sourcrates 15th Sep 18, 8:46 PM
    • 15,269 Posts
    • 14,362 Thanks
    sourcrates
    Won't Aperture make me bankrupt when they know about the credit cards? I've got a feeling they will.

    The thing that worries me about bankruptcy is that it says that some landlords won't let you stay in rented property if you are made bankrupt. I don't know if this applies to a council house. I have been late with my rent and council tax regularly.

    I'm not sure.

    It looks like bankruptcy is my only option but will have to do.plenty of research first.
    Originally posted by garym1977
    I doubt they will want to fork out 680 to make you bankrupt and get nothing in return, what possible benefit would it bring them, you have no money or assets.

    The fact youve been neglecting essential payments shows your current situation is untenable, this is designed to be a fresh start for those that need it.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Free Legal advice see : http://legalbeagles.info/
    • PrettyKittyKat
    • By PrettyKittyKat 16th Sep 18, 12:11 PM
    • 629 Posts
    • 595 Thanks
    PrettyKittyKat
    IP's very rarely pursue bankruptcy for failing their IVA. I'd imagine the only cases they would is if they knew there was significant assets which would repay creditors, and of course they can take fees from. Which isn't the case for you.

    Yes you have breached your IVA for getting additional credit, but in all the different breaches that can occur this isn't a major one.

    You can just stop making payments, ignore the phone calls, and then write to them to explain the situation and your intentions once you get your 3 months missed payments breach letter if you prefer.

    I would recommend calling StepChange again and discussing bankruptcy, how it works, what it means for you etc. Be realistic with your budget for the I&E, the current one hasn't been sustainable so you must have been spending more on some items. I know you said it is due to a family situation that caused an emotional response but don't be afraid to say you need more on your budget. In bankruptcy having no disposable income left for a payment means you don't have a monthly payment to make, and if you do it will be for 3 years and needs to be affordable.
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