My husband and I have considerable debts spanning 3 years and after seeking financial advice have been told that an IVA would be our best option. We are slightly confused about what things are acceptable to include into our budget. For example: Are we allowed to budget for Christmas/Birthdays? Is the budget flexible enough concerning gas/electric in bad weather? Also, once we start the process, how long does it take to set up an IVA? Would I have to write to my creditors in advance? Any insight would be appreciated. Thanks.
Hi and welcome. Good to see that you are taking advice.
You won't be able to budget for Christmas/birthdays. This will have to be saved from your other allowances. Gas and Electricity are covered and if things get really bad you can always ask for lower payments and/or a payment break.
An IVA usually takes between 6 and 8 weeks to set up and it is up to you whether or not you contact your creditors - your IP certainly will.
I'd speak to one or two more companies before making a final decision. Visit www.iva.com for a list of companies and reviews. You will receive free and impartial advice as to all the options open to you.
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
Power-wise I averaged out my yearly payments, so I am ahead in the summer, but catch up in the winter. Council tax, is paid over 10 months -- but put down a 12th in your expenditure. For a rough (very rough) guide as to a budget, try the CCCS website budget planner. It doesn't give guidence as to amounts, but will prompt you if it thinks the amount is too much. Main thing is to be honest and to try to factor in all your spending to arrive at a manageable amount you can live on for 5 years.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Holidays are allowed in br but not ivas as far as I'm aware...although the guidelines changed a few months ago so maybe the professionals can settle this. The cccs budget planner is good but some of the allowances are br only...but put in everything as your starting point.
Also worth thinking about joining your pension schemes before you start the iva if you aren't already members - creditors frown on joining once your iva has started but allow you to continue with minimum contributions if your already in it.
You cannot have a holiday allowance in an IVA. You would have to save the money from other allowances. Definitely not nails either!
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
Holidays are alloweed whilst you are in an IVA but a holiday allowance is not. Most of my clients manage to save up for a modest family holiday each year out of savings in other areas of expenditure.
I would be very interested to learn more about your holiday allowance anomalous. How much was put down and accepted by creditors - and are your creditors high street lenders or trade bodies?
Hi Lynn
It sounds like you are at the same stage as my hubby and I - we have decided which company to use and have started gathering the paperwork required and tonight intend to sit down and try and put together an accurate income and expenditure.
Like you our main concerns are how we are going to cope with Christmas/Birthdays and unexpected things like the washer deciding to break down. Already we need new sofas!! also our 16 year old daughter has a college residential trip at a cost of £65 coming up.
Having said that we know that we can't carry on the way we are and do recognise that our situation is down to ourselves (and unforseen circumstances) and we do want to ensure we can pay as much of our debt off as possible.
There seems to be lots of good advice and support on here.
Good Luck[:)]
Lynn.wy wrote:
what things are acceptable to include into our budget. For example: Are we allowed to budget for Christmas/Birthdays? Is the budget flexible enough concerning gas/electric in bad weather?
