Extracting my Head From the Sand

[Newstart]

Ok, deep breath. This is my first post.

I've spent most of the afternoon reading the forum and various topics around the site.
I'm undoubtedly in a financial mess and from the looks of others positions (why do people, me in this case, presume they are the only one's !), heading for an IVA at best or Bankruptcy at worst. I've already decided (as soon as the Bank Holiday is over) to contact an IP, advertised on this site.

If I may though I'd like to ask a few questions about my particular situation.

I live with my partner of about 10 years in a house we bought 3 years ago. Between us we have 2 kids that have left home and an 18 and 15 year old still living with us.
I doubt whether there is much positive equity in the house.
Not counting the mortgage, which is in joint names, I have 8 creditors amounting to a debt of about £42k.
My partner has 3 creditors amounting to barely £4k.
My salary is approximately £26k, my partners £17k.

My main question is whether I would have a choice in taking out an IVA in just my name, or does the fact that we own property together mean that we would have to take one out jointly ? In this situation is it more beneficial one way or the other ?

I've already wrote letters to most of my creditors telling them that I will be seeking financial advice and that they can only expect intermittent payments for the time being. (I'm not sure this was the right thing to do yet ???). Have I jumped the gun a bit ?

I know that I need to seek further financial advice but from the brief details that I have put on here am I looking more towards an IVA or Bankruptcy.

Thankyou very much for your time.

[fudge34]

Hi
And welcome to the forum - please don't think you are the only one to get yourself into a financial state. We all have and that is why we are here. Everyone is here to support not judge you. OK now you say that you have a joint mortgage, first things first you need to decide whether you have enough disposable income to take on an IVA and which creditors you have to pay back. That makes a bit of difference. Can you give us a list of your creditors?

[Newstart]

Hi
And welcome to the forum - please don't think you are the only one to get yourself into a financial state. We all have and that is why we are here. Everyone is here to support not judge you. OK now you say that you have a joint mortgage, first things first you need to decide whether you have enough disposable income to take on an IVA and which creditors you have to pay back. That makes a bit of difference. Can you give us a list of your creditors?

Thankyou fudge34,

Our joint mortgage is with RBS.

My creditors are :-
RBS Bank Loan £ 12.5k 3 years into a 7 year loan.
The rest are credit cards MBNA, Amex, Mint, Egg, TSB, Citicard & Barclays. All apart from the Egg card are probably 10 years old plus which means I've been carrying the spiralling debt around with me for far too long, actually since a very high maintenance first marriage. All are at their limits practically, between £3k and £10k (TSB).

My partners creditors are :-
A&L Bank Loan £3k 2 years into a 3 year loan.
Mint £1.5k credit card
Capital One £1k credit card.

Thanks again

[fudge34]

Well at least you haven't got Northern Rock there! one of the advisors will be able to tell you what your creditors generally do IVA wise. As far as I know you cannot take out a joint IVA this has to be seperated. Since your husband owes relatively little I would think that he would benefit from taking out a DMP rather than enter into an IVA.

As far as I know IVA are for people who owe 15.000 plus. The general idea of an IVA is propose a payment / dividend of what you can pay back to your creditors. This is taken from your disposable income. So for mine I was expected to pay 56p in the £ over a five year period. With most IVA's if not all they include a 4th year equity clause which means after 4 years they can look at the equity in your house and decide whether they can use this to help pay back the debt.

You are obviously, blacklisted for 6 years but unlike BR you do not have your name in the paper, etc etc. So really I think you need to take some professional advice, decide whether an IVA or BR is better for you and take your action from there. If you have little equity in your house and no real assets (i.e. antique furniture or a s****y car) then going BR might be easier for you in the long run as the payments (again based on disposable income) are alot lower in BR than an IVA.

[Adam Davies]

Hi Newstart and welcome.
You do not both have to enter into an IVA and on the info above it looks as if only you would need to enter one.
Do as you have said and contact a company[or two] on this site.
You are amongst friends on this forum.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Newstart]

Thanks fudge and Andy.

I'll fill out an accurate IVA enquiry form over the bank holiday and try and speak to someone on Tuesday or Wednesday. I need to see this through now I've started. The future will be grim otherwise.

Just one last question.

Regarding expenditure. Presuming I go into an IVA on my own how much of the mortgage payment do I apportion to me. Is it half or is it worked out on the relative incomes ?

[Soulgrowth]

Well done on taking the first step new start ... this forum is a brilliant, supportive and informative environment ... we'll be with you all the way

Debbie

[fudge34]

My IVA advisor told me that it was normally half split between the husband and his wife. What they generally do is make you fill out and I & E form - expenditure and Income sorry have had a glass of wine meant that the other way around. You fill out absolutely everything and they take the figure from both your wages. So you add those together, sit down and work out how much the mortgage is, how much electricty etc is and then you work out what you have left at the end of it. Its based on a joint income because its assumed that you and your husband share the load of the bills jointly. I earn more than my husband but they didn't take that into account just our joint income. The figure you are left with is your disposable income.

That figure is then used as a IVA payment towards your creditors. So for instance my disposable income once my child had come out of nursery was going to be 700 in 2009 and they took this that this would be the payment i would have to pay back.

Of course it depends on the level of your debt and what your IVA advisor thinks they can get away with but generally they would try to make you pay as much back as they could because your IVA proposal stands a better chance of being accepted.

You need to sit down and ask yourself can I make these payments every month for the next five years? I knew as soon as I saw 800 pound in year 4 that i would be struggling and when I was told NR usually turned down IVA's I took the other option and thought about BR instead.

Despite how you feel (and we all know how you feel!) you need to take action sooner rather than later and really make that jump into sorting something out. Remember you have a joint mortgage and your husband's debt isn't that appropriate for an IVA so you at least have someone that could offer to buy you out of the interest on the house if you decided the BR was better.

[MelanieGiles]

Hi there Newstart - you have taken the first steps to resolving your difficulties and that it sometimes the hardest part.

Looking at your circumstances, it seems to me that it is only you who has a debt problem, as your partner ought to be able to manage the repayments on such low debts. An IP will generally look at your respective take-home earnings, and the ratio in which they are earned - so as you earn 60% of the overall income, you should pay 60% of the overall shared household expenditure, leaving your partner to shoulder the balance. Hopefully they will have sufficient to deal with their debts outside of any debt management or insolvency process, leaving you to offer some money to your creditors on an ongoing basis - either in an DMP, IVA or bankruptcy procedure.

You have taken the right step to write to your creditors informing them of your situation. It is important to maintain contact with your creditors, who will respect you for this. Now you should seek more specific advice from an insolvency practitioner about all of the options available to you and their advantages, disadvantages and implications.

Good luck!

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

[Newstart]

Thank you for all your comments. They are much appreciated.