IVA or not?
Hello. I am new here and would like to know if I should apply for an IVA. I have roughly £25000 worth of debt under my belt, accumulated over the years and have been in a constant struggle to get this mess under control. I have not missed a single payment on a credit card or loan so far, but the amount I owe is now so large that I find myself working more and more hours to meet the payments. I currently work 70+ hours a week, 7 days a week, have not had a proper Holiday in a few years, apart from a couple of days here and there and am now on breaking point. My young daughter suffers because I don't have much time to spend with her and I am always tired and stressed. I tried to consolidate all my debt, as I could probably pay back up to £350-£400 a month but in the current climate no Bank is willing to take on that "risk". I approached 2 companies for debt advise. One asked me for £250 upfront and to close all my accounts and get a new one, cancel all my loan direct debits and leave the rest to them. I have always made sure that my accounts are in good order-not unauthorised overdrafts and no returned payments, so it feels cowardly to me to run away from it all like a thief in the night. Please advise on the pro's and con's of an IVA, what the implications are other than a stain on my credit history and if I can keep a normal current bank account and how I should go about solving this mess. (Sorry, that's more than one question.)I apologise if this has already been answered elsewhere here and if that's the case would be happy to be directed to the right place. I am a private tentant, drive a old car (which I need for my weekend job as a community carer)and no savings, apart from my daughter's holiday fund of £200. The money I owe consist of 2 credit cards and 2 loans (never missed a payment in 4 years!)and an authorised overdraft on my current account.
Thank you for any advise.
Hi Chris and welcome to the forum.
Your questions are all valid and I think that you were right not to pay up front monies without knowing what the best option is for you never mind even agreeing to it.
Consolidation is clearly difficult as you have no security and it seems you have investigated this avenue. This leaves bankruptcy , debt management or an IVA as the other main options if you are not meeting your repayments. If you can afford £350-400 per month you are clearly insolvent as this amount of money would not service your level of debt.
Debt management may be a reasonable option as you would clear your debts in full in about 6 years if all creditors froze interest and you administered the payments yourself. However, it seems you have two jobs and a car that will not last forever so perhaps your surplus income is not as high as you think.
Bankruptcy or IVA do also seem viable options but obviously both have their downsides as well as advantages. It would be worth your while to contact an IP firm for some free advice and explore all your options more fully.
I do agree with the advice to open a new bank account as you will want to protect your wages from being seized by the bank if they find out you are struggling.
Last edited by Michael Peoples on Mon Oct 05, 2009 2:39 pm, edited 1 time in total.
Hello Michael. Thank you very much for your reply. Debt Management would still be my preferred option (that might change because the more I research the more I realise that I might have bitten off more than I can chew), however I read that the repayments are based on income. Would both incomes be included (although the weekend job generates an unreliable amount of money, as it is an Agency job) or just the amount I earn in my steady job?
It would not be wise to use the full amount of your second income regardless of which option you choose. It would make more sense to offer half after expenses which would be an incentive for you to do the work while also improving the offer to creditors. At least the monies would only be due when you actually did the work and you would not be under pressure if you could not find any weekend work or just were not up to doing it.
If you remove the second income your surplus for creditors would obviously drop but it would be more realistic as no one can be expected to work two jobs for an indefinite period.
Given the figures you are quoting, a DMP would potentially be a better option for creditors as you could largely repay your debts in full over a reaslistic timescale. But if your income reduces, by giving up the second job, then you could be back into IVA territory.
Thank you for your reply, Melanie. I have been researching for most of the evening, reading through this forum, to figure out the best way for me. There is an endless stream of IVA stories, some of them really encouraging, some of them quite scary, especially when it comes to the struggeling part, when you can't afford to buy new clothes for your kids. Also, a huge amount of guilt has set in: that's me reflecting on how could I ever have gone that far. Why did I have to place that 10 book-order on Amazon, that put me even deeper into debt thinking that I'll just work a few hours more next month to repay it? "Next month" came and went and the car needed new tires and the repayment never happend. I am sure that most people on here have faced up to that guilt and a sense of failure. I have tried so hard, and yet it's just not good eneough. I could probably manage for another 4-5 years until the loans are all paid up and then focus on the credit cards. But by then my daughter will be 15 or 16 and will remember me as the ever absent Mum who thought that work was more important than spending time with her daughter. Anyway, I have sent an application to an IP who comes well-recommened by this Forum, and I am more than ready to face my demons. Thank you to whoever created a place like that. It means a lot to me to see that I am not the only one and that there can be light at the end of any tunnel.
ChrisB, welcome to the forum and I am so pleased t read that you're enjoying the forum, do stick around and get further advice/support or just for a chat along your journey to debt freedom. You're doing the right thing by addressing your problems now and by contacting an IP you'll get some good clear advice that will help you move forward. Make sure you're 100% happy with the advice given and the relationship has to be a good one with your IP as this relationship needs to be maintained for 5 or 6 years.
I sincerely wish you well and hope you stick around with us.
I personally have felt guilty re the debts and have also done the working too many hours and been the absent parent, in an IVA we live frugally but have a quality of life that we didn't have before our acceptance into our IVA, there are no more stresses each month and wondering which way to rob Peter to pay Paul.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Hello Lesley. You are right. The more I read the more I realise that a good support network is just as important as getting "a good deal". My first contact with a debtsolving company was rather unpleasant, as they were very vague on options and fibbed on the fees. They told me that I would now have to make a one-off payment which would mean that I would not have to pay anything for another 2 months, when my real payment plan kicks in. Thankfully my suspicious mind picked up on it and I asked if that was going to be their fee, to which he replied "Sort of". Needless to say that I vowed to struggle on, no matter what, until I found someone who would be honest with me. I am not naive enough to think that a Debt Solving/Advise Company lives of air and Thank-yous. Of course they will have to charge a fee.
After that I was put off for a while, until I came across this Forum. And for the first time I can speak about the things that keep me awake (well semi-awake...I usually fall asleep anywhere I go...lol).
Thanks for all the encouragement and the warm welcome. I will try not to "talk" too much. It's my time to listen, I think. ...and LISTEN I shall very carefully (in a good way):-)
hi chris theirs more to life than working 24/7 to make ends meet.taking time off to spend with your family ,then budgeting with the help of a iva working more reasonable hours,could be a solution that could give you and your family a more happy and stress free life,with a debt free life in the medium term of 5 years.if you could afford aprox £200 a month after reducing your working hours then a iva could be suitable for you,and only takes a few months to set up with a good ip,dont pay any up front fees.
Last edited by MRBLUESKY on Mon Oct 05, 2009 11:16 pm, edited 1 time in total.
Thank you LadyH. It's really tempting to let it out for once and all, having tried to cope with it on my own for such a long time. The worst part is, of course, the long hours working and a kind of bitterness about the fact that other people have to work less than I do and lead a better life. I never went on fancy holidays, I never bought designer clothes or splashed out on extravagancies. How did it all happen? At first it was probably a rip-off deal from my bank which ended up in a £16000 10 year loan, from which I never recovered. Then the odd treats (buying a pair of boots which cost £60 rather than £20-after all I work hard alsas I deserve a treat, right!!??) and paying for it by credit card. I have always been very careful not to break any agreements. And as said earlier, I have not defaulted on a single payment ever since. All my bills are paid by direct debit which leaves me with nothing in my account 4 days after payday. I then rely on the second job for childcare and food, as well as petrol money. My car tax needs to be renewed, my travelcard is due (almost 200 a month), so I and up working harder and harder every month. My daughter's birthday is looming and she wants a bike. She knows that she can't have everything and she is not spoilt at all. But not having Mummy around and not seeing a result of Mummy's absence can be confusing to any child. So, that's my lot. I know that I am not alone. And that's the best feeling I have had in a long time. And I now actually believe that I can make it somehow, either way. IVA or not...but there are people who KNOW, who have been in that scary place I am just entering and I can see that they emerged alive and well...a very comforting feeling.
Last edited by ChrisB on Mon Oct 05, 2009 11:19 pm, edited 1 time in total.
ronald.h1 wrote:
hi chris theirs more to life than working 24/7 to make ends meet.taking time off to spend with your family ,then budgeting with the help of a iva working more reasonable hours,could be a solution that could give you and your family a more happy and stress free life,with a debt free life in the medium term of 5 years.if you could afford aprox £200 a month after reducing your working hours then a iva could be suitable for you,and only takes a few months to set up with a good ip,dont pay any up front fees.
And yes, you are right too Ronald. I am sick of everyone thinking that I am working so hard because I am a moneygrabbing so-and-so.
No one knows my situation but yet everyone resents the fact that I am not up for "fun and games". I work every single weekend, hence there is socialising at all...which does not make me the most popular person with my friends either. In fact, everyone has stopped asking me out for fun stuff. I want to change that part of my life too...because it sucks.
i was £78.000 in debt,less than 4 years ago,am now debt free with a iva.when i applied for one all my monthly payments to unsecured debts stopped instantly,i made token payments in them days for a few months,but theirs no need to now under the iva protocol rules so you get instant relief when you start the iva process with a good ip like melanie giles,just to mention one ip that is highly recommended on this forum,i was with payplan.
Last edited by MRBLUESKY on Mon Oct 05, 2009 11:33 pm, edited 1 time in total.
