now struggling to keep up

[firebolt]

My husband and I have debt totalling around £30,000. We owe around £20,000 to HSBC and £10,000 to Northern Rock. We have only been late on payments a few times but are now struggling to keep up, especially as I'm on maternity leave and won't be returning to work.

If we went for an IVA, how long would it take to be approved? What would we do in the meantime (would we stop making payments, or just continue to pay what we can afford)? We can't afford to keep paying the full amounts, but I worry about being charged for late payments and the interest is terrible.

My husband is a police officer. Will they definitely not be told about the IVA because my husband is really worried about it affecting his job.

Many thanks.

[jo_b]

I cant remembering paying any money to the companies i owed money to whilst my IVA was being processed. As for your husbands job he has nothing to worry about, no one finds out about the IVA unless you decide to tell anyone and to be honest if they did find out they could not do anything about it. Jo x

[MelanieGiles]

Hi firebolt

As you only have two creditors, who are both notoriously difficult to deal with, an IVA is not really a workable option. What you should do is negotiate lower payments with both creditors directly, based upon your disposable income when your maternity pay has ceased. If this does not work, then I would approach a debt management company to act for you and put together a DMP.

Make sure that they tell the creditors that your husband is a policeman, and that bankruptcy is therefore not an option.

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

[neverending]

Hi
In reply to your specific questions
1]6-10 weeks is the norm and you would be advised to stop making any payments whilst your IVA is arranged and approved.
2] Your husbands employer will not be informed and I can,t recall any problems,employment wise, with Policemen entering an IVA.
Do be sure that an IVA is right for both of you.
are you homeowners and if so is your equity greater than 30k ??
If so then you are not actually insolvent and an IVA will not be applicable for you.Have a chat with a company on this site,you have nothing to lose !!

[firebolt]

Would IVA definitely not be an option? I can't imagine how long it will take to repay the debt if we don't do IVA, and bankruptcy is definitely not an option because of my husbands job. We have 2 young children and I really want to dig us out of this debt. We have tried consolidating it before which is why we owe HSBC so much, but we just keep prolonging the loan (we have literally extended it every single year for 3 years now so I just can't see how we will ever pay it back).

We are currently renting. We have already sold our flat in order to pay back some debt (we had to move because of husband's job and couldn't afford a property locally so ended up just selling up), but we're no better off! We would love to buy again but would have to use the keyworker HomeBuy scheme to have any chance of affording a house big enough, but we can't do that if we have debts over 1£15,000! It's a horribly vicious circle that we simply cannot break out of

[MelanieGiles]

Hi again

Creditors (and therefore IP's) do not really accept IVA's when there are less than four creditors. There is no legal reason for this, but practically and commercially the bank's feel that there is no need for them to cover IP fees where you could easily divide a disposable income figure by the debts and carry on making the repayments directly.

Work out your income and expenditure, to see what is left to offer to creditors. Whilst you may have to repay the payments for longer than the 5 years generally operated for IVA's, I am afraid that is the price to pay for borrowing money.

How much do you think you could afford to pay each month? It might be worth asking the creditors if they will cease charging interest, but I would doubt that they will agree to that in the long-term. Perhaps you could consider going back to work on a part-time basis to increase your disposable income.

Your property owning plans will probably have to be put on hold until your debts are at a more manageable level.

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

[firebolt]

Thanks for your help. I do completely understand that it's our own fault for getting into debt in the first place. But I also feel a little p*ssed off that they allowed us to borrow so much. HSBC have been fobbing us off with bigger and bigger loans for over 3 years now and it's reached the point that we have no way of paying them back Northern Rock convinced us we could afford a mortgage and gave us a loan to use a deposit, but we couldn't afford the repayments, ended up selling and still owe them the loan!! We even had to pay them an early redemption charge for the privilage!

I know it's our fault really, but we're young and easily persuaded by these big financial companies who simply throw money at us! If we hadn't let HSBC consolidated our debts last year, then we would have more than 2 creditors!!

It seems really unfair that we can't be considered just because we only have 2 creditors ... we only have 2 because we've already attempted to consilidate everything but is simply hasn't worked.

I can't go back to work part-time because I'm a student. I need to finish my degree if I'm going to have any chance of earning enough money to dig us out of this horrible hole

I'm honestly too scared to call HSBC again because I know they'll just extend the loan again and I really don't want to be in debt the rest of my life. It is making life so hard for me and my husband, especially with a toddler and newborn to think of. After rent and bills, we only have about £300 available for repayments. And that literally would leave us with nothing for emergencies.

Sorry to whinge so much! I am just literally in tears over all this and my husband is so angry that things have got so bad.

[MelanieGiles]

Hi again

One thing you must stop doing is beating yourselves up about this situation. You need to look after yourself, as you now have a another little one to think about, and your husband has a very stressful job.

I completely agree with you about the lending policies of these banks. I have my own view of the Northern Rock "together" product, which encourages people to stretch to barely affordable mortgages on the back of a dangerous unsecured loan. Great for the first few months whilst you are enjoying your new home, but it starts to bit after a while.

HSBC have a habit of offering continual consolidation and top-up loans without always verifying affordability. It is perhaps a little strange that both creditors have the toughest voting criteria in the country within IVA's.

And believe me living an expenditure budget stipulated by HSBC's voting representatives is not fun. You would be left with no contingency budget and expected to survive on about £370 for food, toiletries, cleaning products and leisure activities per month (equates to £28 per person) and £50 for clothing.

Whose names are the debts in, are they both joint? Would you consider a debt management plan as a last resort?

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

[firebolt]

Just sneaking back in before I go to bed!

We have one HSBC credit card in my name, one is my husbands name, a loan in both names. The Northern Rock loan is in both names.

We would consider anything that we could reasonably afford and that would, one day, mean we were debt free!! If it takes longer than 5 years, then so be it. It would be worth it in the end.

[MelanieGiles]

OK - so I think you need to seriously look at proposing a DMP, and as you are at the end of your tether with HSBC perhaps it might be better appointing a debt advisory company to assist you.

I do not do this type of work personally, and you could do no better than refer matters to Thomas Charles or Finebridge who are both experts on this forum.

Bear in mind that you are taking a very responsible attitude towards solving your current debt problems, and you should both be very proud of that! Try and pay as much as you can into your DMP - as the more you pay the lower the term.

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

[freelili]

Hello Firebolt

Just wanted to say, you are not alone, I too have debts with HSBC who continued to phone and increase my loans after every 3 month period, it is quite difficult to refuse them, they know how to push it.(I am a single mom and owe as much as you) I said no twice before agreeing and since I had just moved house I actually needed the money anyway, they seem to make you feel like you are making the right choice. I know how stressful this is and how you know deep down, you signed on the dotted line, Not only is it break the stress-ometer stessful but you have guilt and self anger to deal with as well, not to mention a baby and toddler. I am so sorry that an IVA is not possible for you. (if you hadnt tried to sort it or had gotten more credit cards you wouldnt be exluded, dont do the latter though please) I am in a DMP at the moment and it has worked for me so far. There is no point in self-blame, you are suffering enough. Hold your head up high, phone someone and ask them to help you. A person who cant make a mistake cant do anything. (there are thousands of people with debt)

My thoughts are with you.
take care

LILY