31,000 pounds in debt and not able to reduce it

[simon.b]

Hi

I'm in a situation where I find myself £31,000 in debt and I'm not able to reduce it. I have a few questions though:

· How long does it take to be agreed?
· Which would be the best company to go through?
· What are the implications of this in terms of creditors coming to my house and trying to claim my assets (car worth £1000, television, hi-fi, playstation)
· I'm approaching the limit on one of my cards and need to transfer the balance to avoid the interest exceeding my credit limit - what is the likelihood of another company agreeing to an IVA if I suddenly transfer a balance onto one of their cards?
· Can I make my pension contributions again or would an IVA resolution ask me to stop these?
· Will my current bank account be closed down because I owe them some of the money
· Will I be able to hold a debit card?
· Would I have to close other credit card accounts down even though I don't owe them any money?
· What is to stop me spending more money and then going down the IVA route at a later stage?
· I would be almost 31 by the time the IVA is finished.... what is the likelihood then of being able to obtain a mortgage?

Would really appreciate some advice if at all possible....

Many thanks

Simon

[aguise]

Hi Simon I'll have a go.

1. This varies but can take as little as 4 weeks ,average I think is about six to eight weeks if straight forward as yours should be.

2.Look at the ones on this site is a good start read posts and try at least 2or 3.

3.In an iva creditors cannot take your stuff unless you have valuable antiques or a ferrari.

4. Would leave the cards alone , some do not like the debt to be less than 12 months old.

5. Quite often they expect these to be stopped so it can be used in the iva.

6.Better to get a basic cash ac as if you owe the bank any wages etc they may freeze and you wont get them. Open an ac with someone not associated to your debts. Read some of the old posts on bank acs and this should help.

7. Some have a debit card but you can have no credit in an iva unless pre arranged with your IP. There are a few that have a debit card but only for the cash in the ac also there are pre paid cards like a top up that you can get. This answers your next question also. ( You should not want any anyway really)

8.You should not want to spend more money that you havent got, an iva is a way to get your debts sorted out, you should not at this point want to make your situation worse. Credit cards etc are how you got to the situation. Personally I never want another. Now in an iva though not easy at times everything I have I pay for and at the end of five years will be so much better off there should be no need for credit.

8.Yes you can get a mortgage.

I am the same as you just someone in debt and have tried to answer as best I can, an expert I am sure will correct me on these points if wrong. Hope this helps.

Ang

[Skippy]

Hi Simon and welcome to the forum. I am not an expert, just someone who was up to her eyes in debt, tried an IVA and am now bankrupt!

I shall try to answer your questions in order:

1. The length of time an IVA takes to be agreed varies from company to company. It is not necessarily a good thing for the IVA to be rushed!
2. You will need to speak to several companies - I would recommend speaking to some of the companies who post on the forum.
3. If you are protected by an IVA, no one can come to your house to take your belongings.
4. I would say that a credit card company would be very unlikely to agree to an IVA if you take out a credit card knowing that you will be unable to pay the money back.
5. Pensions are a grey area. Some people are asked to stop paying, and others (like myself) continue paying. A lot depends on your IP.
6. If you are entering an IVA you will need to open a new basic bank account (with no credit facilities) with a bank who are not linked to your creditors.
7. You can hold a debit card, it really depends on whether your bank lets you have one.
8. You wouldn't be able to have any form of credit in an IVA without the premission of your IP.
9. There is probably nothing to stop you, but I really don't feel that it's a good idea. If a creditor feels that you have taken on credit knowing that you cannot repay it they will reject the IVA.
10. There is nothing to stop you getting a mortgage, although at first it might be at a slightly higher interest rate. This will improve in time.



Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[Skippy]

Your reply wasn't there aguise - at least we seem to agree!

Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[aguise]

Skip
I have the same happen to me all the time, I have to re read everything as my keyboard skills are rubbish, then when you post ten others have done it , as you say we seem to agree [8D]

Ang

[Skippy]

I've just re-read your post Simon, and there's one thing that I am not sure about - if your take home pay is £1372, your credit payments are £800 and your bills are £300 (have you accounted for everything, as this seems very low?) this leaves a surplus of £272 per month, meaning that you are not actually insolvent. Perhaps you can post a breakdown of your expenditure so that one of the experts can advise you further.

Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[Adam Davies]

Simon
I,m not sure if an IVA is right for you given your high disposible income.
If you paid £500 per month over 5 years your debts would be cleared,so having £800 per month to service your debts will enable you to clear them and service the interest.
You probably need to re organise these debts and cut up your cards.
You have realised your problem before you can no longer manage it
Good Luck

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

You have a debt management problem, not a debt problem, so as Andy says an IVA is not a sensible option and would not be acceptable to your creditors. The key to sorting this out is to do some sensible budgeting, and ensuring that you do not borrow any more money in the meantime.

You have disposable income of over £1,000 and the ability to repay your debts well within the IVA timescale. You are also very young, so my advice is be strictly disciplined to pay the debts of as quickly as you can, and don't borrow any more money.

The sooner the debts are repaid, the sooner you can look for a place of your own and start enjoying the fruits of your labour.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[jamesfalla]

Simon

I know that Andy and Melanie have both suggested that you have too much disposable income to undertake an IVA. However, I do think your situation is worth closer inspection.

You say you only pay £50 per month in rent to your Mum. However, this is very low. I think as a 25 year old you should be contributing at least £50/week (£200-£250/mth min).

I think if you look at your realistic expenditures with a debt advisor, you might find that you spend more each month than you realise. I suggest you do this before makeing a decision on the solution to take

James Falla

Expert in IVA, Bankruptcy and informal Debt Management solutions for over 10 years.

For more information visit www.jamesfalla.com and visit my blog at: http://jamesfalla.blogs.iva.co.uk

[kathy.c]

I'm quite shocked, not at your debts(we've all been there) but how little a man of your age pays towards his keep.Do you think it fair that your mother should subsidise your lifestyle in this way?

[gimmewine]

Simon, everyone is assuming you pay £50 a months for board and lodgin, but your post does not actually specify the period. Also, do you pay other bill ie share of council tax, contribution for gas, electric, food.

As James Falla pointed out, it is important to list all items of expenditure so the experts can advice you on all the options.

[MelanieGiles]

Hi Simon

What appears to have happened in your case is that debts have been incurred to fund a lifestyle which in hindsight you are are now struggling to repay. This is getting more and more common within the younger generation, and you are certainly not alone, however you have to accept that monies have been borrowed and your creditors expect to be repaid.

Within your budget you do need to take account of housekeeping money and clothing. As a general rule of thumb you should expect to spend between £200 - £250 on general housekeeping and £50 per month on clothing. And obviously you are being subsidised by your Mum if you are only paying £50 per month.

I do think that you need to rethink your budget carefully - I have a form on my website which you might find useful - as it now strikes me from the further information you have provided that you may be actually insolvent. If this is the case, then you could consider formal debt management, an IVA or even bankruptcy proceedings.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Adam Davies]

Hi Simon
Firstly if you REALLY want to sort out your debt problem then contact the card issuers where you still have credit available[all 18k of it] if you do not then you will surely have to go down the IVA/Bankruptcy road.How banks can offer 50k of unseured debt on a take home of £1372 is amazing,even if they were all credit cards and you paid the 2% minimum it would equate to £1000 per month.Unbelievable !!
I still personally think that you can get back on the right road yourself but you have to be disciplined.You have a loan finishing at the end of the year and you could either use this spare monthly money to repay more than the minimum on your cards or take another loan and consolodate your card that you owe £7k on.You should be able to take a 7k loan over three years at approx £250 a month,this would free up the £120 that you are paying on the card at present and will give you a disposible income of £220 a month.Also both your loans would end in 2010 and you should then be comfortable with debts of 12k.
Have a good think about the way forward.
By the way your Mums a star !!!

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Skippy]

If you want really scary Andy I had debts of 65k on take home of £1285!

Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[Adam Davies]

Aguise
I love you "light at the end of the tunnel" pic,I was looking for that type of pic when I first started posting but in the end went with the flying credit card[now retired]
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp