Any help would be most appreciated.

[cous101]

Hi everyone,

I am new to this sight and have to say it really encouraging to know that there is help and advice out there. Anyway here is my predicament…

I have run up a large amount of debt over the last few years. This started several years ago when at University. I ran up debts just trying to live and survive (being a ‘mature’ student I did not go down the route of 24hours partying!!). As a consequence I started upping my unsecured loan from my bank and soon reached the maximum of £25,000.

I then met my, now, wife and we moved in together with her three children. We moved into a rented house that was unfurnished and our other properties were furnished. We had to buy all new furniture to put into the house which most of it went on my credit cards. At the time as was commuting 130 miles everyday to my job which was costing a lot in fuel, but was manageable. That is until the fuel prices started going up! In the end it was costing me money to go to work. I asked for a pay rise and received one, but it was not enough to maintain any standard of life. Two years ago I was given the opportunity to start a business with one of my wife’s cousins that would have meant I would only be travelling 10 miles each day. I was also in the position of being able to take redundancy from my current employer and whilst not a lot of money it was enough to start the business.

We started the business and have been trading for two years but things have not been going as well as they could and I have not been able to take a salary out. My cousin has another business and so is okay. As a result I have been living on credit for a while now and on the, some would say very misguided, belief that the business would soon start to bring in more than enough money to cover what I have been spending. This has not materialised and I am now at the position where I have to take temporary work and am starting to look for a new job as I do not wish for my family to suffer any more than they have.

As a consequence I have now amassed an unsecured loan of £24,000 and credit card debt of £29,000. I have been able to service these debts up until now where I have reached the end of the line in being able to manage, hence going out and getting some ‘real’ work.

Whilst I am not in as big a predicament as some people I am in a place that is not very nice. I have hypertension and started to drink a lot more than I normally do, although I luckily noticed this and have done something about it.

Anyway to the crux of my mad ramblings! Part of my plan going forward was to take some financial qualifications as I worked for a bank in the past and would like to get back into the financial services. My wife also works for a local accountants office.

Is an IVA the best way for me to go and would that have an impact on me being able to work in financial services and would there be an issue with my wife’s place of work? I do want to pay my creditors but am now in a position where I cannot pay the full amount.

Any help would be most appreciated.

Thanks in advance and sorry for the long winded story!!

[MelanieGiles]

Hi d.cg

Thank you for providing such a detailed note about your financial history. At least you are looking at your finances in a sensible manner, and want to deal with your debts responsibly.

An IVA is one option for you, but you should also consider Debt Management Programmes or even bankrupty proceedings. You will need to be able to make payments of at least £335 into an IVA - and more if your finances will support a higher payment - based upon the minimum dividend criteria operated by most creditors. If you owd HSBC or Northern Rock then these creditors tend to have higher expectations.

Bankruptcy proceedings may affect your ability to work within financial services, but you will need to check this directly with the FSA and prospective employers terms and conditions of employment.

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

[cous101]

Hi Melanie,

Many thanks for such a prompt reply. I do not wish to go down the bankcruptcy if I can help it but if that is the best route then will consider it. Can you give me some details where I can find out more about DMP please?

[MelanieGiles]

CCCS and the Citizens Advice Bureaux give free advice and will help you to establish a DMP if you feel that this is an appropriate route. You can also appoint a specialist company to act on your behalf - I recommend Brightoak **- who would be able to take you throught the procedure.

A DMP is basically an ongoing repayment plan, whereby you continue to pay your creditors an affordable sum but this continues until the debts are repaid in full. The downside of a DMP over an IVA is that **the creditors may continue to charge ongoing interest, and that you will not have the legal protection afforded within IVA proceedings for the duration of the repayment plan.

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


** Brightoak - http://www.brightoak.co.uk/
telephone number is 0800 0437 222
added by admin

[cous101]

Hi Melanie,

Many thanks for such a prompt reply. I do not wish to go down the bankcruptcy if I can help it but if that is the best route then will consider it. Can you give me some details where I can find out more about DMP please?

[MelanieGiles]

Please see my earlier reply.

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

[kellym]

Hi and welcome cous101

I am also new to all this but thought I would offer my info as I am in pretty much the same boat as you. Me and hubby ran up debt to buy/support our business however it never did very well. We are now looking for paid employment. Firstly do you own a propery? if so maybe an equity release for a full and final offer to creditors if not you could look at IVA. Once you have paid employment IVA could be an an option some jobs you would be ok with IVA some you are not you would have to check this with each employer I have been looking at jobs at the moment in finace and quite a lot dont even ask for any credit checks. If you have employment now check your contract as it may be you dont even have to mention it. All the best for the future your on the right road to sorting things out

Kelly

Smile it makes people wonder what you have been up to!

[cous101]

Sorry Melanie,
Do not know why it posted twice!!

Hi Kelly, thanks for the message. It really is good to know that you are never on your own in things like this. Over the weekend I thought my world had come to an end, but having now faced the issue, in a way now it feels like a new beginning!! Went to the shops today to get some basics and sort of enjoyed having to think about the cost of things I was buying and trying to find cheaper alternatives, although I know this will not last (the fun element that is!)

Unfortunately we do not own our property rather rent. We are having to move and the rent will be going up hence the reality check. I have been doing some investigative work and it appears that the FSA take every application on merit and there is a recent case of one guy who was accepted a licence with an IVA of over £100,000 as he was upfront about it and the company he was working for would be closely monitoring him.

[kellym]

Glad to hear that. Imo thats how employers should see it we have learnt our lesson and now facing debt in a responsible manner. Just keep reading all the post even really old ones as I have learnt so much these past few weeks. Everyone here is really nice so you will get loads of support on the way.

Smile it makes people wonder what you have been up to!