cannot afford to repay my bills and survive

[glen.f]

Hi there i am a ltd company boss, who has a £14000 business loan, and on a personal note a £11.5k loan and a £16.5k loan. I am looking at taking a full time job where my income will be approx £1500 worse off so i cannot afford to repay my bills and survive. I also have a car valued at £20k ( but i owe £26k under a pcp)......I own my house woth around £170k, with mortgage of £137k. my credit history is terrible and cannot remortgage...i can always afford to pay the mortgage but what else can i do with the other bills ??? i really cant lose my house...

[MelanieGiles]

Hi glen and welcome to the forum

Can you tell me what a "pcp" is - probably quite obvious but it is Friday evening!

You have debts of approximately £42k and equity of £33k - is the property jointly owned? And can I ask why you are moving from a well paid job to one which pays substantially less? Is the limited company in financial difficulties also?

An IVA or a DMP may be possible if you have disposable income available to pay creditors on an ongoing basis, but with an IVA you would be required to remortgage your property during the final year to raise equity to pay over to creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[gavin]

Hi glen and welcome to the forum

Can you tell me what a "pcp" is - probably quite obvious but it is Friday evening!

You have debts of approximately £42k and equity of £33k - is the property jointly owned? And can I ask why you are moving from a well paid job to one which pays substantially less? Is the limited company in financial difficulties also?

An IVA or a DMP may be possible if you have disposable income available to pay creditors on an ongoing basis, but with an IVA you would be required to remortgage your property during the final year to raise equity to pay over to creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

PCP IS A Personal Contract Purchase
Personal Contract Purchase is highly attractive and increasingly popular. It combines low, fixed monthly payments with exceptional flexibility at the end of the agreement. Your car's guaranteed future value is calculated (based on agreed mileage and age) and becomes deferred as a final payment (balloon).


Crucially, you don't commit to buying the car at the outset. Instead, you use it for 24-48 months, deciding at the end of the agreement what you want to do. Either:

1) Buy the car by paying an agreed minimum residual value

2) Part-exchange the vehicle for another

3) Sell the vehicle privately (settling the balloon)

4) Or, subject to mileage and condition, return the car with nothing more to pay (e.g. if depreciation resulted in negative equity)


PCP is ideal if you're opting out of a company car scheme. You use your company car allowance to fund your PCP monthly payments without paying company car tax.

Low risk - A minimum future value is guaranteed
Low deposit - keeps valuable personal or business cash available
Low fixed monthly payments - perfect for budgeting
Choice - Buy the car, part-exchange it or just return it
A better car - lower payments can help you choose a higher specification car
Tax breaks - If you're opting out of a company scheme, your cash alternative isn't subject to company car tax
VAT free - no VAT on payment

[MelanieGiles]

Thanks Gavin - that information has been really helpful.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[gavin]

Thanks Gavin - that information has been really helpful.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

no problem

[glen.f]

hi there, i am being offered a job for the company i currently contract for, if it do not get it/accept it i do not have any other cliennts to work for. the property is in my name only, i have heard of something from my solicitor where the loans are paid back when i sell the house (whenever i decide to?) is this the IVA ??? i cannot remortgae as i have only been with mortgage for 6 months, and each ti9me i have paid a few days late which means i am in arrears in there eyes! so i dont think they will let me remortage - also what can i do about the busioness loan as essentially i will not have a business anymore ? but i did sign a personal guarantee for the bus-loan (my solictor has checked the property records and the only finance secured on my house is the mortgage) for these loans, what am i looking at paying back per month if i get accepted for an iva ?

[Adam Davies]

Hi
With you business loan you owe 42k,not including any shortfall from the car.
Under an IVA you may be able to continue repaying the car until the end of the IVA or until you are in a position to hand it back.Alternatively you could hand the car back now and add the shortfall to your debts.
I think what your solicitor was referring to was a charging order where an unsecured loan is secured against your property.It could also be the equity release clause that will form part of your IVA,if accepted,where you will have to remortgage in the fourth year and pay a part of your equity into your IVA.
With your new job how much disposible income will you have after you have paid your mortgage,utility bills etc etc ?
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[glen.f]

i will want to hand the car back/sell it etc, and add this to the loan total. my total income is still TBC as the job offer will be discussed tomorrrow (if it get it or not) so will post back when i know more info. essentially by the sound of things, i can set up an IVA for the halifax/hsbc loans, the hsbc bus loan and the shortfall of the car pcp - and pay a small payment each month to them all, and after 4 years remortgage and pay them back anything else outstanding? is there some form of calculator which would determine how much i would owe back to the creditors (seen adverts for 75% of theloan being taken off etc!) will i be able to remortgage after 4 years ? surely having an iva is really bad for my credit rating etc ?

[mikebdomain]

As long as you pay your IVA (it is shown on your credit file as active and not failed) you will be able to remortgage in four years. The IVA will not have a massive adverse effect on your mortgage application.

FREE ADVICE IS THE BEST ADVICE

Mortgage Broker
Specialising in adverse credit.

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[Adam Davies]

Hi Glen
An IVA works by you having to pay into it all your disposible income over five years,you will also have to remortgage and release upto 85% of your equity in the fourth year[your payments wll be adjusted to account for your extra mortgage payments].
Your creditors are the people who agree to your IVA or not and 75% of them[in relation to money owed],that vote on the day,have to say yes.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[glen.f]

'all' my disposable income????? what does this mean, surely i am allowed money each month for socialising, clothing, holidays etc ??? these companuies cant expect us to live on nothing, (obviisly we are allowed rent, food etc!!) but with no other life quality - whats the point?

[glen.f]

ps, it also sounds like i pay them lots of money still each month (for 4/5 years) then give them upto 85% of my money in my property when i remortgage???? is this right? so really its just making my payments lower each month to the creditors then giving them all there money back at the end from when i remortgage??? so where does this 'wipe off upto 75% from your debts come from???'

[scaredkez]

not all iva's write off 75% of the debt, and i think thats were lots of people get confused, you have to pay back as much as possible by way of your disposable income, so if you think an iva is for you, you will have to come to an agreement with your ip as to what you realistically can live off for the next 5 yrs, there is no luxuries i am afraid, and they don't allow for holidays and socialising, but if you are committed and really want to pay as much as possible back, then it will work for you as it has for so many others,most iva's have a 4th yr equity clause also where you have to remortgage.
if you went BR you would lose your car and possibly your home if you have equity in it, you really need to work out what your best option is
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[glen.f]

OK THATS GREAT THANKS, ANY WAYS OF KEEPING MY HOUSE IF I GO BR ?

[glen.f]

PS, IS THERE NOT AN OPTION WHERE THE CREDITORS PUT A CLAUSE WHEREBY IF I SELL MY HOUSE THEY GET THERE MONEY? SURELY THATS BETTER THAN AN IVA ??? AS I CAN LIVE THERE LIKE NORMAL (I.E 'HAVE A LIFE'), PAYING NO MONEY TO THE CREDITORS BUT IF IF I SELL THEN I AM FORECED TO GIVE IT TO THEM? WHAT IS THIS CALLED AND HOW DO I GO ABOUT THIS ???