Hello. I spent a large part of last year unemployed after being made redundant in Jan 2008. I spent many weeks using my credit cards to substitute my weekly income, as well as paying a couple of large bills for car jobs. As of March 2009 I am now in full time employment, although my wage is lower than I was used to.
I am now in a situation where I am unable to make the monthly payments on my loans and payments, and have only been managing to do so by borrowing from the cards. I am aware that this situation is not sustainable and that is why I have been looking into a possible IVA. I currently owe apx £16,000 (as well as a further £10,000 on a student loan) and my take home pay is apx £975 a month.
Having read a number of the stories on this forum, I have found that a lot of people enter into an IVA after months of phone calls and harrassment from their creditors. Since I live in shared accomodation, I am extremely reluctant to allow things to get that far.
Is having a history of defaulting on payments a requirement to be considered for an IVA (as in proving that payments are unable to be made), or is this just a situation that most people find themselves in because they have allowed the situation to get that far?
If the latter is the case, then I would like to look further into IVAs before the situation gets out of control and I have creditors phoning up a shared phone line asking for me.
It really doesnt matter that you are up tp date you are clearly struggleing so and IVA could be a good solution, i was up to date with my payments and my IVA was agreed.
Regrettably you will struggle to get an IVA with such a high student loan debt, as this company appear to have a block policy of rejection (unless you are offering a very high dividend in which case it would be questionable whether an IVA is the right option in any case).
As you are not yet at the level where the student loan needs repaying, I would suggest that you look into a DMP and try and get those credit card debts reduced as quickly as possible. Once they are repaid you can then tackle the loan.
As Sarah says it doesn't matter that you are up to date, if you are borrowing on cards to survive then you do need to take advice.
You need to speak to an IP who will be able to go through the various options with you. Have a look at www.iva.com and read the reviews from people who have used the IPs, or you could contact any of the experts who post on here. Melanie Giles and David Mond are both IPs who are recommended, and McCambridge Duffy (Michael Peoples posts on here) also have an excellent reputation.
You raise an interesting point regarding the student loan. I had not thought of the student loan as part of my problems, simply because it works on a complete different process (you only make payments when you earn more than £1250gross in any month, interest is tied to the rate of inflation -meaning it is barely rising at the mo- and whatever is left unpaid gets written off when you retire). I, however, included the student loan in the total as I was told in the advice I received to include it. This raises a couple of other questions:
1) Since the student loan is not causing me sleepless nights and I would be happy to slowly chip away at that throughout my working life in the same way as everyone else, is there an option to not include this as part of any IVA?
2) If the answer to 1) is "No", then is there any way that I could choose to pay slightly more towards the SLC when the arrangements are being made?
I do still feel that, discounting the Student Loan, an IVA could be a good option for me.
You can only exclude the student loan with the express agreement of all of your creditors and of course the loan company itself. Given the size of the loan, in comparison to your other debts, this may not be qacceptable to either side, but no harm in trying if you can persuade an IP to act for you in this regard.
