What to do?

[Whoopsadaisy]

Hi
I have been reading this great forum for some time, although haven't had the courage to post until now!
I have a problem!
We are about to propose a 58p in the £ return on £120,000 debt. (Creditors' meeting pending)
My wife has just heard that due to restructuring at work, she is in line for a 36% payrise.(Not heard officially, but it is 99.99% likely to happen by September)
Basically this means we could probably just afford to pay our monthly debts without entering into the IVA. (Albeit we now have arrears of four months due to IP recommending we stopped all payments, and have had umpteen nasty letters and phone calls-and we would only be able to make minimum payments on the 5 credit cards)
What do we do?
Do we stop IVA proposal?
Do we ask IP to amend offer prior to meeting?
Do we wait until first months increased pay and then tell IP?Will he amend monthly amount immediately, or wait until first annual review?
What do we do with the extra money in the meantime?
How do we clear the arrears?
We know a DMP would be unsuitable due to the amount we owe, but could we negotiate directly with creditors to avoid the IVA?
Thanks

Sorry for all the questions, just want to do right thing!

[BlueShoes]

Welcome to the forum, Whoopsadaisy!
I'm not sure that only being able to pay the minimum amount on your credit cards each month is the same as being able to meet your monthly debt payments? Do the minimum payments cover the interest?
If not, I would say you are still insolvent, despite your wife's big payrise.
How much do you owe on the cards?
I'm sure one of the forum experts will be able to answer more specifically.
Blue

[Whoopsadaisy]

We owe

£48,000 on credit cards
£52,000 on personal loans
£12,000 on catalogues
£8,000 in overdrafts

[ivorquestion]

Welcome to the forum, Whoopsadaisy!
I'm not sure that only being able to pay the minimum amount on your credit cards each month is the same as being able to meet your monthly debt payments? Do the minimum payments cover the interest?

Yes the banks make sure that they get their cut before they reduce your liabilities.

The problem with only paying the minimum payment is that it massively increases the time it will take clear the debt. This is even if you stopped using the cards altogether.

You will effectively be treading water until you win the lottery

[hara]

your wife's increased wages is not set yet in black and white.Hence as the things stand you do not have it you do not know where these promises will end? Hence I would not count on it yet.

DO NOT MAKE ANY AMENDMENTS YET ON A PROMISED ASSUMPTION.

As you have already started the process my suggestion is to arry on.

Also as you have not paid for a few months interest will have accumilated along with charges.

IVA has also its constraints and set back.

It ties you for 5 years.

Affects credit rating.

But as you have not paid for a few months your credit rating may already have been affected.

Discuss with your IP,who may be in a better position to advice.

At end final decision has to be yours.

Hara.

[Whoopsadaisy]

So do you think we should proceed with the IVA?
Our disposbale income is going to increase significantly (about £850 a month)
What should we do about our proposed IVA figure? The meeting with creditors will happen before this payrise is implemented. So do we stick with the 58p in pound offer, and let the IP increase our contribution at the first annual review?
Do we tell the IP before the meeting?
Do we wait until afterwards, or is that dishonest, as we could afford to pay much more for the first year if we come clean?
Thanks

[BlueShoes]

I agree with hara; until that payrise is confirmed, you shouldn't make assumptions, even if you are certain it will happen.
I would tell your IP that a payrise might be pending, and see what they say.
Best to be open and upfront about these things.
Will the extra money mean you can pay back 100p/£? In which case I think the duration of the IVA is reduced, once all the debt is paid.
Good luck
Blue

[Whoopsadaisy]

Not sure Blueshoes, about the 100pence in pound bit, would have to ask IP.
If IVA approved and we pay the original 58p in pound, and we have £850 surplus income for first 12 months until annual review, what do we/can we do with it?
Can we spend it? Save it? Will it be taken off us at review?
We are aware that the monthly contribution would increase at annual review so we can add it to original payments as our expenses certainly wont go up that much, but in meantime is it ours?

[fudge34]

Hi - for what its worth I completely and utterly agree with what the others are telling you. This is just my opinion and obviously seek advice but i would go forward with the IVA as you have your i and e now and tell them that there may be a payrise in the offing but this is not CONFIRMED! One thing I have learnt in my life is that you can never take anything for granted (husband had stroke when he was just 29) and that what may happen does usually happen but you need to make sure you are not promising things that you haven't actually got in your hand yet. When I was completing my IVA I was advised by my IP that even if you gauranteed a payrise you should never count on this towards your IVA especially in the first year as this is when you really need to make a concerted effort to keep to your 'fixed' payments if you did go in higher than you need to ensure that you can make these payments comfortably. Just my opinion!

[scaredkez]

when your wife receives her payrise you should inform the IP straight away and believe me they will act on it and up your payments they will not wait until 12 months, so be up front now, you will not be receiving that 850 surplus that will be ate up in the iva so make sure you get your I+E right when it does. the surplus is not yours and you would get a nasty surprise 12 months in when they ask you for it!!
kerri

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

[Adam Davies]

Hi
Speak with your IP as I would suggest delaying your IVA proposal until you are sure of your wifes pay rise.£850 per month is a huge difference and if you feel that you can meet your contracted minimum payments then technically you will no longer be insolvent and an IVA would not be suitable.
I hope your IP does not look at your situation from their commercial point and advise you to enter into the IVA.
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

[tracy.h]

Hi i agree with Andy on this,regarding being insolvent but obviously with not making payments to your creditors for the last four months it obviously doesnt meen even with a big payrise that you will be in a poistion to get on track immediatly with creditors.
And interest will be building on your debts.
Maybe if and when your wife gets this payrise you will be able to negotiate with your creditors and pay a little extra each month.Still doesnt stop the interest building up though.
Will be interesting to see what your ip says on this matter.
And well done to your wife on her payrise,i hope it will all work out for you both.

Tracy