40k debts, 36k pa salary - IVA?

[Anna]

Hi,

I have spent all day today on this Forum but still need a bit of direction based on my personal circumstances.

I have the following debts:

Abbey National Loan - about 13200 outstanding another 3 years to pay off on 6.4 intersts rate

Abbey National Credit Card - balance ob 8000 which will never be paid off as the card is MBNA and they have increased my interest from 15.9% which I had for few years to 26% (!!!!) and only after a month worth of phone calls went down to 21% which is still way too high to even dream of making any repayments, just the interst is about 135 per month

Tesco Loan - 5900 outstanding with another 2.5 years to pay off at 7.8%, paying at 250 per month

Lloyds TSB Credit Card - not using this one as only got it some time ago for balance transfer for 7.8% for the life of balance - 6250 outstanding, paying at 125 per month

Student Loan - not sure how much is left but got about a year to finish paying off this one at 85 per month so I assume there is about 1000 outstanding, low interest (inflation rate)

DFS Hp (settee) to finish paying off later on this year - 59 per month, about 600 remaining.

Overdraft with Abbey National - 1400 which cost me 10 per month


**********************

In total I am currently paying 1200 per month in repayments which reduce the amounts I owe - apart from the Abbey (MBNA) credit card which I have no hope of paying with the crazy 21% APR.

I have NOT missed any payments so far but can not cope with paying 1200 every month. I was so far - by using the credit card for daily expenses.

The idea of 5 years on IVA scares the hell out of me being honest but I have to be realistic here and after all I have seen so far/tried so far - this seems to be the only option for me.

I can comfortably afford to pay 400-500 per month towards my debts.

My take home salary is 2123 per month (after Tax and NI), plus 70 per month ChB.

I am a single parent, with a 16 yo daughter in full time education, 1 large dog, 1 cat, living in a council flat (cheap rent), I do not have anything I could sell (no car etc) and no savings whatsoever.


My questions:

1) Would I qualify for IVA?

2) Can IVA be set for 3 years and not 5?

3) Is reducing repayments from 1200 to 400-500 per month possible given my circumstances as described above? The figures may be SLIGHTLY off but not much, I have to check the exact outstanding figures and will do so on Monday.

4) As my bank is Abbey and my CC is with Abbey (but MBNA) and together they are more than 25% of the total debt - is this likely to cause problems if they both "gang up" together?

5) Applying for IVA - at which point one should open a new bank account? I need one that gives me a card which I can use to pay online, cash card will simply not be enough for me, there is no way I could live with just a cash card. I do not carry cash with me, I pay by debit card absolutely everywhere. I do not need an overdraft or any credit but a debit card that is accepted widely. Also an account with Internet banking is an absolute must.Any advice?

6) At which point do DD need to be cancelled when applying for IVA? All my debts are paid by DD from my current account, as well as all my bills.

7) My daughter who is 16 has got a saving and current account with Abbey. If I went for IVA and go a new account - can they take any money from her account?

I am financially supporting my mother abroad - can this be added in my financial statement as one of the expenses? The money is passed over in cash by friends going "back home" as bank transfers abroad are too expensive/.

I am sorry to post so many questions - hope someone can help me out here and offer advice?

I have tried switching cards/getting another loan to lower the repayments by stretching the term of the loan etc but no luck. I have also tried finding another job but as I already work full time and have a kid at home - this is not an option.

Thanks a lot,

Anna

[Anna]

Sorry - one more question...

When applying for a new bank account - do I have to tell the new bank about IVA application?

[Anna]

Started a blog...No idea why it does not show under "Blogs" here?

http://anna.blogs.iva.co.uk/

Another sleepless night....

[gimmewine]

Hiya, sleepless nights are the worst aren't they. I don't know much about IVA's so can't advice you on that. In relation to a bank accounts try this link

http://www.moneysupermarket.com/current ... esults.asp

It shows you a variety of basic accounts and what you get with them. Personally, I bank with NatWest (basic account) I have a card which is accepted at cash machine and in shops. They provide internet banking no problem. The only thing is that the card is not always useable on line as quite a few sites will not have the maestro set up. However, I am now the proud owner of a prepaid credit card into which I transfer x amount a month for my xmas fund, then in November, December I shop on line. No reason why you can't do the same.

One bit of advice, if you are still using credit cards to supplement the cost of paying £1,200, don't. All it will do is make the ultimate amount of debt higher. Much better to try and negotiate for reduced settlements pending the IVA proposal and try to get the interest frozen, but again your IP will be the best person to advice you on this.

[Anna]

"One bit of advice, if you are still using credit cards to supplement the cost of paying £1,200, don't. All it will do is make the ultimate amount of debt higher."


I can not any more, there is 8100 limit on my card and 8000 balance.


"Much better to try and negotiate for reduced settlements pending the IVA proposal and try to get the interest frozen,"

I know, tried that - no luck.


"but again your IP will be the best person to advice you on this.""

Hope to get one soon...

Thanks a lot for your post...

Trying to go to bed (again) and get some sleep.

Night Night

[jonesy]

hello

its seems that we are in the same boat i also have debts around £35,000 and take home £36,000 per annum.

i have started the process of starting an iva with grant thornton
i am also very scared by the process my iva repayment is coming out at £600 per month a debt managment was coming out higher and was advised against it as the creditors can still come after you.

i have applied for a basic account with the co-operative bank and they accepted me over the phone it took 25 mins and you don't need to mention the iva, the account is an online account and the card is visa electron you can set up standing order and direct debits.

hope that helps need to work on my finance now ! stressed out jonesy

jonesy

[Anna]

Thanks for your post Jonesy.

I could not go as high as 600 with an IVA, it would have to be 400, and at the worst 500.But with 500 it would be a bit risky already, considering it is a 5 year commitment.

Anna

[jonesy]

i think that i am going to get my down to £500 going to work with my figures again with my adviser

i am just starting the process of writing the letters to my creditors to tell them i am in trouble and i am seeking prof advice
very scarey

i also am unusre when to cancel dd as my bank is one of my main creditors i have two loans with them

what a bloody nightmare eh

jonesy

[Anna]

Jonesy - not good to see someone else in similar financial mess to my own but good to be able to maybe hold each other hand and pass the kleenex in the process.

I have not started anything yet. I have only really gave up on trying to find a different solution yesterday after a flat refusal from 2 banks to consolidate/spdread over longer period/lower the monthly repayments.

Reality hit my hard and I can no longer kid myself "I will cope" as I can clearly see I can not. Each and ever refused application means the next one is going to be refused (recorded credit searches on your file etc) so there is no point trying any more.

I really hope someone answers my 1001 questions from the post above as I doubt I can start anything this month - my salary gets paid into my account in about 10 days. All DD (debts and bills) come out on the 1st of each month (with a few later but those are minority).

From my understanding so far I would need to arrange to have my salary paid into different, new account. That means I will need to transfer DD for the bills and cancel DD for the debts - I need to know when to do it as the last thing I want is to end up in arreas for the debt payments on top of the problems I have now.

I am not sure how long does it take to cancel DD? I have a feeling it is a week before they are due to be taken out of the account? I know they are "called for" before the date thay are actually taken from the account. I do not want to make a mistake there.

So many questions - still.

Hope all goes smooth for you.

Hugs

A

[jonesy]

start with setting up the basics account with the co operative bank it usually takes about a week i had my paperwork yesterday and have to provide two pieces of id which i will take along tomorrow

don't worry about the direct debits at the moment just make a list of the days they go out on and then cancel when you get the account set up

i also get paid on the 26th so i think the iva will miss this month meaning it will be a tough month for me cash wise

start the process of the iva today or tomorrow
they will ask you to list all your creditors, addresses and amounts owed, prepare a budget list all your payments going out and the dates then what you need to live they will go through this with you
and will try to get you the best payment you can afford to repay.


all the best

jonesy

[Anna]

Jonesy - I have a feeling we work for the same employer.. been on the telly quite a lot recently, huh?

I will wait for Melanie to come back to forum and hope she sees my post, puts some light in the situation for me and possibly take my case on.

There is not much I can do on weekdays daytime, the nature of my job prevents me from being able to call/receive calls (work as IT Trainer - can not have a lenghty phone conversation while instructing a group of people on what NOT to press on the keyboard ;:) so I am trying to do as much research as I can right now, at the weekend.

Will try to call the banks now to confirm the outstanding balanes- some of them are open on Sundays... See what I can do now.

Hugs

A

[jane.l]

I have no idea if we are doing the "right" thing or not, but here is my experience: We have a 120% mortgage Northern Rock(£113,500)& a secured loan, Picture(£35000) 1 unsecured loan,Northern Rock(20000) a credit card Northern Rock(£6500) and 2 catalogues (£500aprox each) and 2 cars on HP. We wanted to move to a cheaper house and have a smaller mortgage and transfer the secured loan over and continue paying, even tho things have been tight! Final straw came when the secured laon company refused to allow the sale of our house and will not transfer the loan to another property unless we pay £10000. Our credit is up to the max and I am sick of living on the breadline to pay all the bills, we cannot continue like this, so after I had spoken to Picture Finance and was told I was not allowed to sell my house, I rang our IP and started down the IVA route, the IP has written to all our creditors explaining the situation. The same day, I emptied my bank account, opened a new one, I did not mention the IVA, I cancelled all the direct debits on the old account and have not paid any creditors since. We have used the money to secure a rented house and are moving in at the end of the month. Our house situation here is a total mess, we had a buyer and are waiting now to see if Picture finance will "lift" the second charge and alllow the sale to complete, if not, we will have to let the house be repossessed as we cannot pay all our creditors. We have been advised to pay all the important bills,like rent, gas, electric, council tax, etc and the other debts will have to be sorted out after the house situation has been resolved. We may even have to go bankrupt at the end of all this,its been a nightmare couple of weeks and I bet it will get worse, but you have to not let it stress you too much, I have unplugged the phone 'cos Northern Rock are constantly ringing me and I just explain the same things over and over again to them!

[Anna]

Jane thanks for posting.

I am hoping for Melanie to see my post and advice if this is a good idea to cancel all debts DD now (I can do it online).

Not sure if I have enough time to ask my payroll to pay this months salary to a new account - provided I can open one tomorrow.

Not sure how to quickly transfer bills (DD) to a new account not to miss any.

Posted in Blog again http://anna.blogs.iva.co.uk/

I am just so tired... going out with the dog before it starts raining.

Will check the Forum later.

Hugs to all

A

[Anna]

Opsssssssssss - just started raining, pretty bad too.

Looks like everything is against me...

[Anna]

Just re done my budget/expenses sheet and 500 is too much.

To be realistic, I need to get IVA below 500, as close to 400 as possible. 400 would be ideal with a good chance of being able to keep up with the payments for 5 years.

400 over 5 years is 30 000. How much of that would go towards debts repayments? Not sure how much would be the fees for IP so not able to calculate what percentage of debt would be pait, the "per pound" ratio.

Anyone knows a "plus/minus" figure for fees?