A few questions from a newbie

[arrmickk]

Hi all

I have been avidly reading everyones posts for a few weeks and have finally plucked up the courage to post a message on here with our situation. I have a few questions swirling around my head and hope that some may be able to answer them. So here goes ....

My husband and I have joint debts of £28,000. (joint personal loan, credit cards in both names, catalogues; one each). My husband works but I do not as I am still on maternity leave (without pay). I am looking to return to some form of employment in the near future and am aware that if I do gain employment this income will be taken in to account if we were accepted for an IVA. We do not have a car anymore as we couldn't afford to run it and this has some bearing on what future employment I might gain with me having a young child (childcare etc).

I have a few questions with regards to our particular situation:

1. Is it possible to do a joint IVA whilst I don't work (I was prior to maternity leave self-employed as a child minder and am not going back to this line of work).

2. We are struggling to keep up to payments but so far have been able to make payments on time. What would happen if we contacted our creditors and said we can't afford their payments and offered to pay less? Would this affect us once we applied for an IVA? i.e. would they be more or less likely to accept our proposal if we had shown signs of struggling prior to filing the IVA?

3. Our house desperately needs repairs to the roof and chimney, guttering and internal walls damaged by damp and a few other areas (front door is unsafe and damaged). We have no central heating, which wasn't an issue prior to having a baby. We have managed for a long time without it. We really need to have at least the roof fixed but will never be able to afford it and it is letting a lot of damp in. I am worried that this will start to affect our little boy as well as us, healthwise, and cause problems in other areas. It has been like this since me moved in 4 years ago and we have never had any spare money to make repairs (I badly broke my leg and ankle just as we were buying the house and was out of work for almost a year! This is where most of the debt stems from).

4. I am not completely clear on how the monthly payments are calculated. Correct me if I am wrong but is it Total monthly income - less essential outgoings, and what is left goes towards the IVA monthly?

Thank you for reading my post and I hope that someone might be able to offer some advice.

Thank you [:)]

Marie

[Foggy]

Hello and welcome. You really need to have an in depth chat with an IP ( several of whom post regularly on here). However, with regard to offering reduced payments, I don't think that would adversely affect a proposed IVA, although it is "in the lap of the Gods" as to whether they would accept or not. It might be an answer to, through a debt management company, go into a DMP initially, which would allow you to negotiate an amount to set aside each month to save towards essential repairs -- again, this is a matter to be discussed with an IP who can be made aware of all the specifics.

You are basically correct as to how monthly repayments are calculated, the object being that you pay as much as you can reasonably afford.

Please chat to a couple of the IP companies (there are many recommended on www.iva.com ). The initial advice is free and they would be happy to help.

I am sure there will be more knowledgeable replies along shortly.

[Adam Davies]

Hi Marie
To answer your questions
1. There is actually no such thing as a joint IVA, you will both have IVAs[Individual Voluntary Arrangements]but they will be interlocking and based on joint income and expenditure. It is not unusual for one person not to be working, or on limited income
2. Once you decide on an IVA you will stop paying all your unsecured creditors, you will go into arrears. Some people make token payments at this stage, some don't, in my experience it has no bearing on the outcome of the IVA
3. It is unlikely that you will have any spare cash once in an IVA for repairs,however you may be granted a payment break if essential repairs are needed
4. An IVA is based on your disposable income, so the money left after reasonable living costs ranging from mortgage payments through to haircuts.

Explore all options including a debt management plan as this may suit short term until you decide on working again or not once the baby is born. It can be quite a smooth transition going from a short term DMP into an IVA

Regards

[Broke of London]

Hi arrmick - I'm so glad you found us.

Having read so many posts already you won't be surprised at me saying you need to speak to a couple of IPs for FREE information and advice. We often recommend www.iva.com as a listing and many firms also have customer reviews. And it goes without saying the experts on here are all fantastic.

1. I'm not sure if you can do a joint IVA while not working but it may be possible. There will be a solution for both of you.

2. Many people choose to stop making payments as soon as they enter the iva process to build up a contingency fund or make essential purchases (such as roof repairs)! Your creditors will start hounding you but they cannot do anything other than threats - the iva proceedings will protect you from debt collectors and bankruptcy proceedings. It doesn't affect how the creditors vote at all.

3. Are there any grants available for heating? Any money you save during the set-up phase could be put towards repairs on your home. It takes about two to three months so this should cover some repairs if not all. I would discuss this in depth with the IPs you speak to as you may be able to claim for some areas of maintenance in your expenditure - I don't know of anyone who is doing this but you can only ask!

4. Yep - you are completely clear! Total income minus essential expenditure = amount available for creditors. The CCCS website has a list of expense categories to give you an idea.

One of the professionals may be along with some definitive advice for you.

Good luck and let us know how you get on x

[Broke of London]

oops! I spent so long reading and typing I completely missed the first two responses!! Where I differ from Andy - ignore me!

[Foggy]

.... another thing .... if you have ANY questions or concerns, feel free to ask away. Even if you think it's a silly question (incidentally there ARE no silly questions :0) ) someone else might be wondering the exact same thing and be afraid to ask.

Best of Luck

[arrmickk]

Thanks guys for all your advice so far. This helps a lot! I looked at the DMP option, but it would appear that they also use all disposable income to put towards payments for creditors, and therefore I assume I would not be able to save any money for repairs. The roof is going to be about £3000 in total so we are in a pretty desperate situation and constantly using the cards to just survive.

Thanks again for your advice

Marie

[Broke of London]

Once you are in the IVA you are likely to be better off than you are now and able to maintain a comfortable if basic standard of living, and you have the comfort of knowing that your debts are shrinking rather than growing every month.

It will be difficult to fund repairs from your expenditure so speak to a couple of IPs to ensure you are getting the most sympathetic advice on how this situation will be treated. Andy's idea about a payment break is a good one.

[andrea1968]

We are in an interlocking iva and I dont work-so that isnt a problem.

[Foggy]

Marie -- are there any grants available from your local authority for repairs ?

[arrmickk]

Thanks andrea1968

Foggy - I have looked in to this and my local authority no longer offer grants to private home owners for house repairs unless they are elderly or vulnerable adults. They only do interest free repayment loans and equity release loans...we have barely any equity in our home due to the current economic situation (we bought just before the market dropped).

Broke of london - We have been scraping by on next to nothing for 4 years so I am hoping that once we can see the light at the end of the tunnel we might start being able to have a life. We have no car, don't really go anywhere or do anything and have not had a proper holiday in the last 3 years only the odd night away here and there. As with most people in our situation, we know we created the problem but there has now come a point where to remain sane we need something drastic to improve things.

Thanks again

marie

[Foggy]

Marie, you are definitely not alone in your situation regarding the stress and deprivation debt causes (certainly here). However, having found us we will do all we can to offer advice and support. There is a solution to the problem, we just have to discover the best one.

[arrmickk]

Thanks....it does help to know that we aren't actually going to be swallowed by the black hole! It just makes me feel so sad and helpless that my son is starting to explore and I can't afford for him to even go regularly to playgroups or playgyms and my sister often helps. She is an absolute godsend where not having a car is concerned, as is my mum.

Just as an aside as you may be able to answer this...I saw on a nother post that was a few years old, that if you owe to a family member, then they can be taken in to account as a creditor, but will not receive a dividend payment...but this means that they have a vote towards accepting your IVA..the post said it would reduce the acceptance votes from 75% to 50%? Is this true...I just did CCCS evaluation and we owe £26,500 (£1,500 less than I thought! bonus! lol) and we owe my mum £13,000 as she helped us out 4 years ago when I broke my ankle but as I had such a long time out of work we just built up massive debts again. Is this true or just out-of-date information does anyone know?

Thanks

[Broke of London]

Arrmick - I won't be alone in remembering being in your position. Once you make that first call to an IP you will feel a huge weight lifting from your shoulders. When you hit rock bottom, the only way is up!

Creditors will sometimes allow you to take out new credit under very exceptional circumstances. Mention these council loans when taking advice and see whether the IP/ creditors would allow repayments to be factored into your expenditure. IT is a bit unorthodox going into an iva with the intention of getting more debt, but your house doesn't sound as if it could last another 5/6 years without reairs. And you need a healthy environment for your little one.

[Broke of London]

They will be taken into account as a creditor and may well be asked to step aside for dividend purposes. The voting % can be a bit confusing so I'll let someone else explain it to you and me!