getting deeper and deeper in debt

[lih]

Hi, I am considering IVA as I cant manage to pay off all the cards and an unsecured loan.. my total debt is about £17000-£18000 , have no assets of value but i work for local government and earn about £1060 a month after tax. I have been paying all my cards on time till now but i am getting deeper and deeper and I got to the end of all cards (used to take money out of some cards to pay other).. I am not sure can I go for IVA even though i have been paying the minimum amounds required till now...or do i need to wait till i start recieving letters for unpaid bills...and how long will it take till they start debt collection and people start knocking on my door.
Thank you

[kezza]

1stly, do something about your debt sooner rather than later, (I wish I had)Talk to a few reputable companies to help you decide which is the best course of action for you and your situation.

An IVA may not be your best option, an expert will advise

[dmss]

go see citerzens advice before debt gets any bigger they will put you on the right track wish i had hope this helps

[Adam Davies]

Hi
You have several options open to you.
Firstly can you work out your disposible income,your income less your living expenses[rent,bills,food,travel etc etc but NOT your minimum debt repayments].If you post this figure then advice can be given.
You have made the first step to sort out your problem and this site can give you the support that you need.
Regards

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

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

[MelanieGiles]

Hi lih

You sound to me as if you have a debt management problem rather than a serious debt problem. With that level of debt, I would thing that a Debt Management Plan may well be a sensible option for you - where you pay affordable amounts to your creditors based upon your disposable income, but please post the information that Andy has asked for and we can advise you of the options.

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

[go_4_broke]

lih,

If you stop paying them tomorrow they would probably take around 3 months at least to default your account and 'debt collection' would start after that. However the worst that would happen would be exactly that, you would be pestered by debt collectors and nothing worse.

The best way to avoid this is to keep making them regular payments of what you can afford on a pro-rata basis. This is effectively a debt management plan, and if you don't want to do it yourself get someone like the CCCS to do it for you.

-Best

Please view my blog at www.go4broke.blogs.iva.co.uk

'6 years sticking my head into the Lion's mouth of debt !'

[iva_squirrel]

Hello Lih,

Welcome to the forum.

I suggest you look into Informal Debt Plan option with the level of debt you have.

An Informal Debt Repayment Plan is simply an agreement with your creditors to reduce the amount you pay to them each month so that the payments fit within an affordable monthly budget. The plan is known as “informal” because it is not legally binding on your creditors. It is simply a “Gentleman’s Agreement” made between them and you to reduce your debt repayments.

The amount you can afford to pay to your creditors each month is known as “Disposable Income”. This is calculated by taking your total monthly household income and deducting all reasonable living expenses. The money left over is called Disposable Income. This is the amount which is paid to your creditors each month.

An informal Debt Repayment Plan can normally be managed for you so that you are able to make a single affordable monthly payment which will cover all of your creditors. Using this solution will enable you to start repaying your creditors without having to borrow more and constantly “Rob Peter to pay Paul”.

Kind regards,


Julia

For more information about IVAs, please visit my website:
www.supersonicsquirrel.net

[jamesfalla]

Hi lih

In my experiance, if you bring home around £1000 after tax, then as a single person you are going to need around £800 to live on (unless you are living at home with parents and paying very little rent) - more if you have children.

As such, this would leave you with a Disposable income of c£250/mth. You could propose and IVA on this basis but you must be very careful that you do not agree to someting that you can not afford. Remember an IVA lasts for 5 years.

Paying £250 a month, a Debt Mgt Plan would take at least 7 years even if all interest is frozen. This is a long period of sticking to a tight budget and uncertainty about when the debt will be fully paid. As such, if you have no assets (ie no house), then I would also seriously look at the bankruptcy option. It is not as bad as it sounds and would resolve your problem once and for all

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

[Adam Davies]

Thats a good point from James.Five years let alone seven years is a lifetime on a tight budget.It is admirable that you want to sort your debt problems via an IVA but you are a young person and really it may well be best for you to consider bankruptcy,you could be discharged after a year.
Speak with a company on this site.
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

[lih]

Thank you so much by the very quick response from all...i thought it over and i decided to go ahead with the IVA ..i am 23 at the moment, by the time i am 29 it would be over...i did think about the bancrupcy option, and nearly got tempted by the fact that it will be quicker but i am kind of afraid that it will stay on my credit file for longer,i will have to tell my employer, my landlord etc. and it would be much more difficult to repair my credit history after a Bcy rather than after IVA...still a bit unsure but will jump, yeasterday opened basic account with Nat West- they were really supportive.
Thank all of you again.I was overwellmed by the responce and the advices!!!!!
Have a great weekend

[Adam Davies]

Lih
Thanks for your comments and please continue to post regarding how you get on and if you need anymore info or advice
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