Myself and my husband are in the process of setting up an IVA. We are due our first meeting next week.
I have a few questions.
1) We can’t meet our minimum payments without leaving ourselves with nothing to live on (we have 3 children to provide for). Should we cancel the direct debits and not pay, or is this the wrong thing to do?
2) Do we need to contact each debtor and explain we won’t be paying and that we are speaking to someone about setting an IVA up?
3) We have opened up a new bank account that is not linked to any debtors, is that correct?
4) Do you think we will get our IVA approved? We owe £40k. Our income is £2,374 a month (I don’t work). Our expenditure is £2,032 a month (all bills and living costs) leaving us £342 a month to pay to debtors. We have a house but have no or little equity in it at the moment.
We are both very stressed out at the moment and are just scared about the whole situation.
You do not need to pay your creditors whilst setting up an IVA but I advise going into online accounts and removing contact details.
If anyone does phone you can explain this or refuse to answer security questions so they cannot carry on.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
We are speaking to stepchange.
So should I ignore any contact about missed payments? I’m scared they would get bailiffs involved as we haven’t set the IVA up yet.
I thought I would have to contact debtors to let them know what we are planning to do?
I doubt any debt collectors/bailiffs will turn up - if they did you don't need to speak to them or open the door, Make sure you read all paperwork from Stepchange before signing. Your creditors will be informed by Stepchange. Save payments as a contingency fund for any emergency whilst setting things up.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
mumof3 wrote:Myself and my husband are in the process of setting up an IVA. We are due our first meeting next week.
I have a few questions.
1) We can’t meet our minimum payments without leaving ourselves with nothing to live on (we have 3 children to provide for). Should we cancel the direct debits and not pay, or is this the wrong thing to do?
Yes cancel the DD's.
2) Do we need to contact each *debtor and explain we won’t be paying and that we are speaking to someone about setting an IVA up?
*creditor. Little point if you are acting quickly as the chosen IP will do this for you, but you can if you want to hold them off in the meantime.
3) We have opened up a new bank account that is not linked to any debtors, is that correct?
Yes that's fine. I presume its a basic bank account/s with no overdraft facility.
4) Do you think we will get our IVA approved? We owe £40k. Our income is £2,374 a month (I don’t work). Our expenditure is £2,032 a month (all bills and living costs) leaving us £342 a month to pay to debtors. We have a house but have no or little equity in it at the moment.
This will be up to creditors to decide - Stepchange should give you a good idea whether or not they think an IVA is viable after your meeting.
We are both very stressed out at the moment and are just scared about the whole situation.
Don't worry - the best thing is you are taking steps to sort things out. Bear in mind some IPs use protocol terms and some don't. Those that do will likely include an extra years extension in lieu of the equity in your home so bear that in mind.
I agree with the others re stopping the payments if they are unaffordable. Some people pay a token payment. If they contact you simply tell them the truth about the IVA. Ditto on the bank account - you have done the right thing. Although it's a scary time till the IVA is accepted - you're joining thousands of others in the same boat and I'm sure you'll be fine. It sounds as if the IVA is in the creditors best interests as well as yours. Looking after 5 of you during the IVA is a costly business, so try to ensure the IVA payment is as low as is likely to be acceptable to the creditors. Get a second or third opinion if you feel that £342/mth will leave you financially tight.
Completely agree with all of the above. The IVA payment shouldn't leave you living on beans on toast and should be affordable -- cut the cloth too tight and the seams are likely to break !
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Not for this year but consider doing online surveys and saving up for next year so you can use vouchers - it has funded Christmas for me for many years.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Foggy wrote:Completely agree with all of the above. The IVA payment shouldn't leave you living on beans on toast and should be affordable -- cut the cloth too tight and the seams are likely to break !
I’ll put up the budget later on once I can concentrate. Then if anyone has any suggestions that would be great!
We found Stepchange to be superb from start to finish so if you stay with their IVA dept you'll be in good hands.
You never hear of any issues with them on this forum.
Good luck.
IVA completed with StepChange.
Last payment Sept 2016 CC Oct 2016
We found Stepchange to be superb from start to finish so if you stay with their IVA dept you'll be in good hands.
You never hear of any issues with them on this forum.
Good luck.
That’s fantastic news. They have been really helpful up to now!
Mortgage - £414 what it is
Other secured loans (help to buy) - £38 what it is
Ground rent and service charges - £5 what it is
Council Tax - £138 This might well be made a creditor
Gas - £30 what it is
Electricity - £50 what it is
Water - £35 what it is
TV Licence - £13 what it is
Buildings and contents Insurance - £21 might be refused
Life Insurance - £30 might be refused
Repairs and Maintenance - £30 might be refused
Food, toiletires and cleaning - £500 [color=#FF0000 2 adults & 3 kids £612[/color]
Clothing and footwear - £95 2 adults & 3 kids £93
Meals at work - £40 £42 per adult
Sport, Hobbies and entertainment - £70 2 adults & 3 kids £71
Sundries and emergencies - £58 2 adults & 3 kids £83
Dentist/Opticians - £28 2 adults £28
Medicines/Prescriptions - £22 2 adults £22
Fuel and Parking - £120 £200 per car
Spares and servicing - £15 £30 per car
Telephone, mobile and internet - £59 2 adults & 3 kids £77
Pets, pet food and insurance - £20 £34
Hairdressing - £40 2 adults 3 kids £45
Childrens pocket money - £30 £36 for the three
School trips and acitivites - £21 £21 for the three
Road tax - £25 What it is
Vehicle Insurance - £49 what it is
Vehicle breakdown cover - £17 might be refused
Childcare - £20 what it is
Life insurance - £30 Might be refused (and duplicated above)
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
