Hello all, I wonder if anyone can help me?
I am currently in the process of setting up a dmp with cccs having previously negotiated with creditors myself to freeze interest and reduce payments (all agreed except Barclaycard who just chose to ignore me, hence my decision to hand it over to cccs). I owe just over £60,000 to 6 creditors and am paying back £600 each month. I have just found out that i am pregnant. As part of my income is from self employment and I am the main bread winner, having a baby will mean that my income will be reduced and that my husband will give up his job to look after little one. As a result, what I will be able to offer each month will be reduced. I have about £30,000 equity in the house. I really would like a 'fresh start' rather than be paying my debts off forever. What are your thoughts on whether i should stay on the dmp or look at releasing the equity and going for a lump sum iva?
Thanks
I think one of the first things you should look at is whether, in the current economic climate, you will actually be able to release equity from your property.
I am sure that you will have to disclose your circumstances to any potential secured lender. I would imagine that a lot will hinge on your ability to repay and given that you are self employed, do you have a guaranteed income flow through your work? If you do have this guaranteed income, how is it going to be affected once you have to give up work whilst you take a maternity break? Your husband who is going to give up work is employed, I take it? And, unless his position were to be adversely affected by the current economic climate, he has a guaranteed income each month.
The DMP should only ever, in my opinion, be a temporary measure. I think you would be better positioned to make an informed decision, once you have made some enquiries as to being able to obtain a re-mortgage. See if you can get an agreement in principle and get a feel for the level of repayments. After all, if the level of repayment is going to be too high, you'll find yourself in the same position again, only this time your home could potentially be at risk.
In case you were wondering where your other post had gone - I deleted it as it was a duplicate of this one.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Given the facts you have quoted, I am suprised that the advice from CCCS is to enter into a DMP - was an IVA offered to you, and did you decline this for any particular reason?
I completely agree with Cybus about raising finance against your property now, but it is worth looking into nevertheless. A sale of the property could also effect a release of equity, but with a little one on the way, you may well need to hand onto the roof over your head, rather than going out to the rental marketplace.
The best thing to do would be to work out a budget for the family based upon when the baby is born, to see if there is likely to be any money available to repay creditors on a monthly basis, and then either revert to CCCS or approach an insolvency practitioner with experience of dealing with self-employed cases to see what options there are for you. There are usually one or two solutions, and it is best to consider this at an early stage before your repayment programme is set up.
The very best of luck to you, and I hope you manage to get things sorted out.
Cybus, I do take on board your points about the difficulties of both remortgaging in my current situation and also the risk involved in taking on additional lending that is secured.
I am actually employed in PAYE jobs to the equivalent of full time, my self employment is additional income. That said, it is in a relatively secure sessional post and provides a weekly income. However, I would not receive this income whilst on maternity leave. My husband's work, although secure, is part-time and not well paid.
Melanie, I have not been offered the opportunity of undertaking an IVA, cccs' only suggestion to me was a DMP.
I will take your advice of working out what my I&E is likely to be once little one comes along and then have a think about my options.
Once again, I am suprised that you were not offered an IVA - and whilst this may not be the optimum solution for you, nevertheless it should have been discussed with you as an option.
I would give another IP a call and ask their advice. Visit www.iva.com for a list of companies, or you could phone Melanie who comes highly recommended, or one of the debt advisors who post on here.
I would certainly get a second or third opinion.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
An IVA looks an appropriate solution - find an Insolvency Practitioner (IP)and discuss all the facts with him/her. Very surprised that CCCS did not suggest one. A re-mortgage might not be appropriate although might raise sufficient funds to offer a F&F - this could be done either informally or as I prefer through an IVA. It all depends on your disposeable income and expenditure especially following giving birth. Speak to one or two IP's asap - as to ones - visit www.iva.com. Good luck.
Last edited by David Mond on Mon Dec 29, 2008 7:24 pm, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
