I desperately need advise please.

[stressedmum]

My husband and I have applied for a debt management last year, we have so many debts,loans and credit cards,overdrafts here and there,amounting more than 40,000 and so we have decided to tidy up our finances a bit by entering into this kind of agreement.It has been in place for almost 6 months now,so we are paying them our disposable income.Some of the banks are still charging us interest,but some have stopped,we have more that 4 creditors.We thought at first it was a relief!Unfortunately,over the past few months,we have been struggling to keep ends meet.we have a total of 2000 overdraft limit in our previous bank which helped us survive for next payday,but after we applied for the debt management,we have to change banks with no overdraft.We have had to borrow from friends.and desperately,from Provident,cash advances just to settle bills and other expenses.We currently have a mortgage,as well as secured debts with it,totals to about 85-90% of the value of the property which is why we are struggling so much to pay.My husband and I are considering selling the house and rent which would leave us pay almost half of the mortgage,but I dont know if this is a good solution to our problem,we are also considering of applying for IVA,or bankruptcy even,im just so stressed out,I have got 3 young children,and working almost full time + doing extra jobs to keep us up to date with mortgage and bills.My husband also works full time.
Please help,I dont know where to go,I have seek advise from CAB,but advise me as well to seek advise from a financial adviser.Dont know if I can afford that either.Will I still be able to apply for IVA even if I dont own a house?is selling house a good option,as there is probably a very small amount of equity to pay some of our small debts now?and can I apply IVA or bankruptcy after that?Also if we apply for the IVA,Do we have to stay on the same company we applied for the debt management or can I choose? I desperately need advise please.

[MelanieGiles]

Hi stressedmum and welcome to the forum

How much are you paying into your DMP every month, and how much equity do you presently have in your property. Which DMP company are you with, and did they advise you of all the options available to you when you approached them or just a DMP?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[stressedmum]

Hi Melanie!Thanks for your reply.
Just want to reply to your questions.My DMP is with the Debt free helpline,I pay £435 each month.Our house is probably worth 115k at this time and Ive got an outstanding mortgage of 68000,secured loan of 24,000 and 15000.so theres not much equity at this time really.
Melanie,Id like to start the ball rolling,is there any chance you can contact me pls.Id like to apply but I dont know where to start.will it be legal for me to apply IVA from a different company?cos Im zlready with the DFH?Do I have the option to choose? By the way,yes dfh have given me options but i wasnt so much keen of the IVA at that time.

[size5]

It certainly sounds as if the £435 you are paying is too high, otherwise you would not need to keep borrowing to supplement your income. Have you tried contacting your DMP firm to lower your payments as a start? Any reputable DMP firm will happily do so if there is a genuine reason or need.
At present, your equity (working on 85%LTV) is negative and an IVA MAY be a good avenue to explore. It is probable that the payments would be lower than you pay now, the whole point being that, although you are expected to contribute as much as is reasonable via a monthly contribution and possible equity release later on, it should be as affordable as possible so that you can comfortably stick to it.
You do not have to stick with the same firm that provided you with your DMP if you wish to have a look at an IVA. I personally have had no dealings with Melanie but the reviews and feedback she gets on here are generally very good, you can click on to the link to iva.com at the bottom of her posts to see feedback on her and lots of other different IVA providers. Be aware that Provident may be a little cheesed off with you for borrowing from them AFTER you approached your DMP company, I know you were desperate but they may view it as unfair to them. Whatever happens I do wish you the very best of luck.

[MelanieGiles]

Hi there

An IVA would appear to be a better solution for you, as there would be a finate end point in five years time but you would perhaps have to pay over some extra money during the final year from the equity in your property. This would only occur if you could borrow at 85% loan to value and pay over at least £5,000 having paid off your existing mortgage and secured loans, so with only a minimal amount of equity at present this option might suit you.

If an IVA is not looking attractive to you, perhaps it is time to formally take advice from an insolvency practitioner which will be completely free of charge.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[carlmcmullen]

DFH do also do IVA's however you are not commited to stay with them.

£435 is sufficent for an IVA and i am suprised they have not already tried so you may have been given bad advise. With your level of debt and disposable income a DMP is not good !!

Typically with a debt of £40,000 depending on your creditors you would need a disposable income of between £3-£400 - If HSBC are one of your bigger creditors then it may need to be a little more but
again if you can introduce equity this payment could be slightly less.

You do not need to be a homeowner to have an IVA - but do you want to keep the property as an IVA might be able to protect it.

There are lots of companys who can help, just make sure you get full advice on all options and discuss your requirements.

Hope this helps

Carl

[stressedmum]

Hi Melanie,thanks for your reply.I am actually considering IVA as my primary solution now.But first I want to clear some of my small debts like Provident,and cash advance.perhaps by selling our car.then its just a case of who to go with really.I really want to start the process now.hope you can help me[:(]

[stressedmum]

Hi Carl!thanks for your reply.DFH has mentioned to me about IVA before,but I wasnt very keen on it before,maybe because I had limited informations about it,although the IP have discussed things with us,I think i wasnt sufficient enough to convince us at that time.
I actually want to exclude the property from IVA,and from what I have read here in this forum,I can,But will have to further pay for another year,is that right?Which I dont mind really.I really wish I can start the application now.Any suggestions of a good IVA provider?Do you think I would rather stick to DFH ,as theyve helped me approved for DMP?I just dont know where to start now,So confused.

DFH do also do IVA's however you are not commited to stay with them.

£435 is sufficent for an IVA and i am suprised they have not already tried so you may have been given bad advise. With your level of debt and disposable income a DMP is not good !!

Typically with a debt of £40,000 depending on your creditors you would need a disposable income of between £3-£400 - If HSBC are one of your bigger creditors then it may need to be a little more but
again if you can introduce equity this payment could be slightly less.

You do not need to be a homeowner to have an IVA - but do you want to keep the property as an IVA might be able to protect it.

There are lots of companys who can help, just make sure you get full advice on all options and discuss your requirements.

Hope this helps

Carl

[MelanieGiles]

You would be very unwise to try and pay off some smaller creditors at the expense of the others during the period leading up to proposing an IVA. That is effectively preferring those creditors, and could scupper your chances of getting an IVA accepted.

Also please don't rely upon being able to pay for an extra year to deal with the equity in your property. These days you will be required to have the property revalued during the final year and then raise equity based upon 85% loan to valye bt taking out an additional re-mortgage.

It would be best to seek professional advice at an early stage, just to find out what your options are.

[ianmillington]

Hi

I agree that you should reconsider the idea of an IVA. Even if you can afford the amount you are currently paying into the DMP, which there must be some doubt about, because you haven't achieved a total interest freeze you have at least a 10 year slog in front of you.

Whoever you select to assist you, your income and expenditure should be reviewed from the ground up, as it will have to be presented to the creditors to enable them to consider the merits of the proposal. Most Insolvency Practitioners will give free advice - take advantage of it and don't be afraid to get a second opinion if what you hear sounds like a "selling - job". In your position you ought to be told what you need to know and not what you want to hear, so make sure you get the pros and cons.

Hope this helps

Ian

[stressedmum]

Hi Melanie.Thanks for your advice.much appreciated.
Because we are struggling paying the mortgage and secured loans now and keeping up to date with bills and everything,would it be better if we sell the house and apply for IVA?as there is probably no equity at this time anyway because we owe the bank so much.that means lowering also our monthly outgoing by at least another £300 compared to paying £800,if we rent a house instead.

[MelanieGiles]

Hi there

It may be sensible to consider downsizing, and whilst we seem to be obsessed with home-ownership in this country, often renting a property can bring much needed relief from financial pressure.

As you are now beginning to ask specific questions about your options, I really do feel that it is time to consult an insolvency practitioner on a one to one basis. Most firms will give you free initial advice as to your options.

[carlmcmullen]

You may struggle selling your property as from what you have said there is no equity in it.

However if you decide to sell and there is a shortfall on the mortgage this amount could be included into an IVA but you need to be careful that your debt does not increase by a significant amount becuase of this as an IVA may no longer be a viable options.

I would suggest that you contact an Insolvency practice to dicuss further as you may be able to exclude the propoerty.

Carl

[emma_t]

Hi stressedmum

This is a very stressful situation for you, I would urge you to take professional advice before doing anything else as there will be a solution to your debt problem.
I could not see any way out when I took advice from Melanie last November but now my future is much more stable and I know I will be debt free in 60 months with my iva.
Have a look on www.iva.com at reviews for iva providers and take advice asap as things will seem brighter for you when you get some answers and advice.
The forum is a great place for support and professional advice and has been a lifeline for me over the past months.

Good luck
Emma x