aaaargh

[debtsucks]

I ahve only just started investigating options after realing that I WAS IN BIG trouble with my finances.

I have just spent the last 5 years at uni and have taken out various loans (career development/professional studies) in order to do 2 post graduate law courses and qualify as a barrister (which I did Nov 06).

These loans kick in in the next 6 months and I still haven't found a job and anything I do eventually get will be quite poorly paid.

I am getting conflicting advice from companies...

One says it will be ok to do an IVA on any salary

the other (which i'm guessing is more correct) states that for the debt of £47k, I will need about £400 ish a month disposable income.

So my query is - If I get a job that doesn't pay me enough to have £400 disposable, what options are left?

Have been told about a joint IVA so if there's more disposable income from ny parter, will this go towards making up my £400?

I'm giving myself a headache!

Any advice would be greatly appreciated.

[MelanieGiles]

Hi debtsucks! And welcome to the forum

To propose an IVA, you have to have a realistic prospect of returning a dividend of at least 25p in the £ to your creditors, and potentially more if you have debts with HSBC or Northern Rock. The return to creditors is obviously only possible once the costs of running the IVA have been taken account of, so I feel minimum payments in the region of £350 per month ought to be more realistic - but of course if you can afford to pay more you will be required to.

As you have no income, I do not feel that an IVA is an option for you at present, and do bear in mind that you cannot leave Student Loan debts behind under bankruptcy proceedings.

If you have a lower disposable income, and wish to avoid bankruptcy, you could always offer a Debt Management Programme to your creditors, but this will continue until the debts are repaid in full and ongoing interest is likely to be charged.

I am not quite sure what you mean about a joint IVA. In reality there is no such thing, but what has developed into a common practice is for spouses to propose voluntary arrangements where there is a combined contribuition distributed amongst all creditors equally. This would only be possible in your case if you were in a long-term relationship and if your partner has debts of their own.

My gut feeling is that you should offer token ongoing repayments to your creditors until you find a permanent job, and then reassess the sitation as at the moment things are very uncertain for you.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[debtsucks]

Thanks for the reply.

In respect of partner, he has some debts for credit cards and loan and we're getting married in July so I'm guessing that's a long term relationship!

I know that until I get a permanent job, I cannot qualify for an IVA but I am trying to work out what salary I need to aim for as a minimum when applying for jobs in the first place. Also, what happens if my salary increases in the 5 years the IVA runs for? Does the amount get re calculated?

when the loans kick in, at least £300 a month is meant to be going to HSBC.

I know that student loan debts cannot be written off, so do I have to find out what I would be paying back a month on that and add it to monthly outgoings total?

I have also been told that there is a slight possibility of being able to take out a mortgage during the IVA period but that the mortgage could be no more monthly than the rent we had been paying and that interest rates would also be higher in this situation?

[MelanieGiles]

Is your partner in a position to service his debts on a contractual basis and give you some of his spare income? If so, this could help you to make the minimum payments.

If your salary increases during the 5 years, then the Supervisor will reassess your case to see whether you will be in a position to make increased payments. Do remember that living expenses are likely to up at the same time, and these will also be taken into account.

How much do you owe to HSBC in relation to your overall indebtedness. HSBC require a minimum dividend of 40p in the £, and if they are owed more than 25% of your aggregate debt you will need to pay more by way of monthly contributions.

Your are correct in your assumptions regarding taking out a mortgage during the IVA - although you will need to find a deposit as you are unlikely to offered more than 90% loan to value of the property you intend to purchase.

Hope this is of further assistance.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk