do you think an IVA is the best route for us

[loulou5]

Hi everyone, i would like to ask your advice about if you think an IVA is the best route for me and my husband to go down.
We have the following debt:-
Husbands debt- Barclay loan approx £21000, Barclay loan approx £1700,
My debt - Barclay loan approx £1000
Joint credit cards :- Barclay card approx £1700, Abbey approx £6500
Joint overdraft with barclays of approx £600

My husband is on long term sick from work and am not sure how long he will receive basic pay of £1500 per month. i am self employed in my first year of childminding and have not worked out my tax allowances etc yet, but am approximating that my monthly income will work out at around £650
We have around £25000 equity in our home, but were told last year when we remortgaged that the maximum we could remortgage for was £123000 which is what we did so could not remortgage again as we are at our max.
Sorry this is so long winded but wanted to give as much info as possible.

[MelanieGiles]

Hi louise and welcome to the forum

The majority of your debts are with Barclays, and you also have a substantial amount of equity in your property, so I do not feel that an IVA is the appropriate solution for you - and I think that Barclays would agree with this.

I suggest that you advise Barclays of your exact financial position - ie provide them with a summary of your income and expenditure and see if you can agree a reduced payment term with them. Also ask them if they will freeze the interest. They might suggest a consolidation loan for you, which will give you the benefit of a fixed term repayment probably at a lower rate than you are paying now. If you decide to go down this route, make sure that you do not incur any further credit along the way and be disciplined to get the debt repaid as soon as you can. You will also need perhaps to renegotiate payment terms with Abbey, depending upon the advice that Barclays give you.

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

[loulou5]

Hi, thankyou for your reply and advice Melanie.
Would it make a difference if we took a loan out with someone else and paid the two lower barclay loans off with that, and balance tranfered some of the abbey card onto another card (we've been offered plenty). That would make four companies we owe money to.
I know it sounds desperate, but that's how i feel....very desperate. We have three young children and we're constantly struggling. The largest loan is over 10 years, and yes we got ourselves into this, but the thought of another 10 years like this makes me so sad.
We lived on credit cards for shopping etc for a long time as i was suffering post natal depression and couldn't work.

[MelanieGiles]

Hi loulou

You should not take out any further borrowings at this stage, as that would prejudice the new lenders who would get a bit upset and certainly be unlikely to reject an IVA proposal.

Nothing to stop you, however, consolidating now with another lender to benefit from lower repayments, but do make sure that you can afford to pay the new payments on their contractual basis. You should not do this if you are insolvent.

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

[tracy.h]

Hi loulou,just to say sorry you are feeling so low,but you will find an answer to your problems,but listen to Melanies advise as desperate as you feel right now takeing further credit will not help you with an iva,im sure you will find a solution,i no myself post natel depression is very hard to get over,but you have hopefully now started to move away from this.Think of your health right now and looking after your 3 children,we are all in debt who post on this forum we help each other,i really hope you can find a way forward,as i said take Melanies advise and try and sort your financail situation out,and remember we are all here to support you.
Goodluck

[loulou5]

thanks for your support tracy. My post natal depression ended approx 4 years ago....which shows how long we've been slowly going down hill with finances. I've just sat down and looked properly at what we actually spend. I'm in utter shock! i've just cried for the last hour.
i normally just add up direct debits and then say we have to make do with what's left.
Obviously this has not worked because what we have left needs to go on shopping , petrol, toiletries, clothing, car maintanance, kid's dinner money, and not to forget when the washer etc breaks down!. All these things are necessities and making do is obvoiusly not working. I havn't even included kid's activities (swimming etc) x 3 kid's works out at £100 per month.

I've worked out all of the above come to approx £1000

I've worked out my direct debit's ...mortgage, insurances, water, gas, elec, etc etc comes to approx £1360.

This comes to approx £2360

Our income does not cover this, and with an IVA out of the question i don't know what to or where to turn.

I know Melanie advised to talk to barclays, but i'm not good with this and don't feel confident or knowledgable enough to approach them.

Now my husband is on sick our situation is only going to get worse as his overtime in the past has been our saviour.

After putting my money i'd kept in case of a tax bill for my childminding into current account last month to cover overdraft....we are back to being £750 overdrawn and it's not even near payday.

i feel like giving up.

[loulou5]

Forgot to add on what we pay out in debt........Approx £450 per month .

total of £2810

[MelanieGiles]

Hi Loulou

Are you saying that your income does not even cover your houseshold expenditur without taking account of debt repayments? If this is the case you should seriously think about selling your house and doing a deal with the bank from the sale proceeds.

You cannot afford to continue living beyond your means, and it seems that your mortgage payment is just too high. And there is nothing shameful about biting the bullet and starting again debt free.

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

[loulou5]

HI Melanie,

yes that's right....£1360 direct debit bills
£450 debt
£1000 Shopping, petrol, clothing etc

We tried to sell house last year but there was just no interest. I have the added pressure that i am a childminder so our home has to be suitable for this.
I don't fully understand what you mean about making a deal.
Sorry to sound so ignorant on the subject....i've buried my head in the sand for so long.

[Adam Davies]

Hi Louise.s
Why do you not consider selling up and going into rented.You could use the cash left over to offer a full and final settlement to your creditors.With your husband off sick it must be a huge worry for you.
One of the biggest problems with serious debt is finally admitting that you have a problem,you have done this and the only solution is ACTION.
Have a family discussion and if you all agree ask an estatr agent to value your house,its the first step
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

[MelanieGiles]

Hi again

I do understand your concerns about the business, but if you do not do something soon your creditors will make the decision for you. Is it possible that you could go into rented accomodation and run your business from that property, or perhaps find salaried employment until your husband is well again.

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

[tracy.h]

Hi loulou,as hard as it is to consider selling your home,maybe its a solution.I no this is a massive step for you,but considering your situation if you carry on the way things are going things will only get worse,you need to make a fresh start you have come a long way,and from what you say your finances dont seem likely to improve.
I really do sympathise ,but you have to do whats best for your family,i hope you will come to the right decision that will allow you to move forward,and allow you and your family to have some peace of mind.Good luck please keep posting let us no what you decide

[loulou5]

Thankyou all for your replies.
I'm writing as i think so please forgive my emotion. I'm devastated at the reality of our situation. I feel sick. What if it takes years to sell. My friend has her house on the market for 18mths. We tried last year but there was just no interest. Our house was valued last year at £150,000. Our mortgage is £123,000. Even if we do sell for £150,000 we would still have approx £7500 debt and absolutly no money for a deposit for another house.
My other worry is that my husband may not go back to work. He has been through an extremely traumatic experience of which i cannot give details, but is very serious and has had an emotional impact on both of us.
This is a mess and i don't want my kid's to go through any more trauma.
Again i apologise for my emotion, i'm just letting off steam.
Just thought of another thing.......our fixed term mortgage does not end until jan 08 so we would also have a penalty to pay.

[loulou5]

Oh god.....can i stick my head back in the sand!
I know that's not the answer.....but this is so much to cope with.

[MelanieGiles]

Loulou

You must stay strong for the sake of your family.

Firstly I suggest you put pen to paper and explain exactly what your situation is to your creditors. Tell them everything and that you have no money to pay them, but that you hope that the situation will improve shortly - and importantly that you will keep them informed of developments. You can either do this yourself, or get your local Citizens Advice Bureau to help out.

Could you take on any more children to help generate some more money? As your husband is off work I assume he could help more around the house to let you concentrate on the business.



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