Is an IVA right for us?

[worriedmart]

Hi all,

Looking for some advice really,

Me and my wife have a combined debt of about 28k unsecured with 3 creditors.

2 of the debts are in my name before we got together, 1 of them is joint.

Would an IVA suit us? As far as im aware an IVA is for one person.. so if I succeded to get an IVA, the 1 joint creditor would still expect payment from my wife?

I have read about joint IVAs.. Would this be possible in our situation?

I feel really stupid that we have got in to this mess. Since my wife returned to work from Maternity after the birth of our daughter, child care costs, her part time working, and tax credits messing us around with child care help.. we are now in the situation where we are bringing home in total with all benefits £1,770.. after rent and all other bills we have about £346 left to pay £700 worth of loans..

Approx figures of loans...

£9500 Intelligent Finance (Joint)
£9500 Black Horse (My Name Only)
£8750 Smile Credit Card & Overdraft (My Name Only)

I would appreciate any comments on what we can do to get ourselves out of this problem, we are getting more and more worried by the day.. Havent actually missed any payments yet, but at the end of the month we will miss out first

Its hard not to feel stupid, and hard to open up about our money problems, nice to find a board where I can talk about it...

Thanks for any suggestions or help.

Martin

[scaredkez]

hi martin and welcome to the forum, firstly its not stupid we have all been where you are now, and you have taken your head out of the sand, so should be commended for realising you have a problem, now i am not sure about how difficult it will be to obtain an iva jointly as you only have 3 creditors, i am sure melanie our regular IP on the forum will correct me if i am wrong, the usual criteria is if you have more than 15k in debts spread over several creditors, as you really only have 2 and your wife one i don't know if it will be feasible to do an iva, but hey don't let my ramblings put you off as i said there will be someone along to help, i just wanted to welcome you and tell you, you are not alone in whatever way you have to go to determine how you pay back, we are all here as one big happy debt family to get you through, to talk to and support you, you have already taken the first big step and hope someone can help you soon, gets a bit quiet sometimes over the weekend but i am sure melanie will be about.
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[aguise]

Hi Martin
I am just like you and your wife and have the same kind of iva that you are asking about .It is not joint as such but there is one proposal, one monthly payment and income and expenditure is worked out as one, but creditor voting is done separately for each person. Not joint but interlocking.
The main problem for you and your wife would maybe be the lack of creditors. All of your creditors have a major vote and any one of them could cause the rejection of an iva as they all hold more than 25% of the debt. i dont think your wife would need to do one and this where I am going to leave it for Melanie or someone with the real technical expertise.
Either way there will be an answer to your problem so dont worry. It might help, if you dont mind, putting your income and disposable income, whats left after poaying all the household stuff, dont include the debts.

Ang



Please visit my blog at http://aguise.blogs.iva.co.uk/

[aguise]

Sorry kerri same time.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[scaredkez]

its ok ang, your hubby obviously catching up on the footie too!!
just glad someone is on to answer the query.
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[worriedmart]

Thanks for getting back so quickly,

Yeh I think the hard bit was having the guts to sit down, and work it all out, rather than just ignoring it and hoping it will all just be ok on its own.

We have been a bit pushed the past few months, but have been paying the debts just about. Work bonuses, cash back on mobiles, tax credits going up have all helped us to survive the past few months, but now they have dropped the bombshell and we will lose a big amount of our tax credits, we really are in one word, screwed

Didnt know what to do, so did a quick google on debt plans etc.. I have seen IVAs and such advertised but im glad I read the forums now and I will take my advice from here.

I bring home £1075 a month, wife about £520, tax credits and benefits are £136.. we are in the south west, not great wages down here. Total: £1731.. Rent, food, bills, child care etc all add to around £1410 leaving us £321 to pay £700 worth of loans. We pay £175 to Intelligent Finance Loan (5 years left of 7), £339 to Black Horse (2.5 years left of 5) and £166 to Smile Credit Card, and then the Interest on the Overdraft.

Eeek, more I talk about it the more I panic lol.. Still better than bottling it up I guess.

[worriedmart]

About £320 disposable income.

[mish1953]

Hey you have taken the first step , being able to talk about it !
I went BR about 3 weeks ago so I know how you feel, your amongst friends here

[scaredkez]

martin thanks for that info, a word of advice if you go for an iva, always work to what you know you can afford and don;t be pressured into paying more than you can afford.

12 months ago i was in your position never missed anything, however from under our feet tax credits came back and said we have overpaid you by 5k no more money for you so had a massive drop in income to the tune of £400 per month, melanie will be on soon and will look at your figures, i am glad that you and your wife can sit down and talk about it, don't blame each other, its happened and you both now need to be stronger together than anything i learnt that, me and hubby are more stronger than ever now, so that is good solid ground to base your situation on, we just need the technical advice now, melanie is always on here, she will advise on the best way, for you.
won't have to wait too long bet she answers tonight or i will eat my hat not that i have one, this lady never sleeps lol

seriously well done for getting this far

take care

answers will be here soon
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[worriedmart]

Thanks peeps.

Ouch, we were only overpaid by about £600 but they also took paying our child care from us, and some of the normal allowance, totaling to about £250 a month. It was still a struggle with this mind.. not being able to buy our daughter many clothes or take her out, but we survived.. now with £250 less, I really cant see a way out unless we can have an IVA, or are forced to go bankrupt.. still will be relief when we can get it sorted out somehow.. its such a pressure and I haven't even got creditors calling me yet demanding payment.

I've learned one thing and thats that im never ever going to get credit again!

[scaredkez]

it doesn't matter what way you have to go to end this, the reality is you faced upto it, after battling so hard to pay i had to go BR read my blogg, just for comfort and so you know where you are, there is always an answer, ok i had a lot more debt than you ,just trying to paint the bigger picture, there will be a solution for you both
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[worriedmart]

Oh, I also have approx a £3200 debt with my parents. I haven't paid anything to them for about 8 months, as they have been very understanding about our situation.

Could this be included in the IVA?

[aguise]

Hi there
The debt to your parents would be included in the iva and this would give them a vote, the downside is that the creditors may expect them to stand aside and receive no dividends. If they are ok maybe thety could wait until the iva finishes and then you pay. them back.
May I also ask do you own your home and if so is there any equity.

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[catullus]

As Aguise has said above, it is possible to do joint IVA's but they are , in effect, two quite separate IVA's that split out both debts and income between the two parties.

With only one creditor your wife would not be suitable for an IVA because she might as well make an offer to that creditor herself rather than go through an IP, and it has to be said that your situation is quite marginal.

Very often in the situation where only 1 party goes in to an IVA it is very unsatisfactory for the one that doesn't because the IVA triggers a default and the one not in the IVA is continually harrassed for payments even when the creditor knows your overall financial position through the details given in the IVA proposal.

Before getting too involved in the detail have you given serious consideration as to why you shouldn't file for bankruptcy. I think that you would find that, in a bankruptcy, you would have to pay less over for a shorter period and so your reasons for not wanting to go for bankruptcy would have to be very strong.

If you went down this road then your wife could make an offer to IF out of her income (no need to do a DMP)or even file for bankruptcy as well.

I have to admit that this sounds rather radical for the amounts involved but neither the number of your creditors or the amounts involved work in your favour for a joint IVA and, so the only other alternative for you both would be to do a DMP which would be rather open ended and probably not a permanent solution to the problem.

[worriedmart]

Hi, no we rent.. we dont have any expensive assests at all.. an old TV.. a car thats worth about £1500 now.. we use it to get me to work, wife to work, child to nursery, driving to walks and the odd day out when we can afford it.

I have no reason not to file for bankruptcy.. like I say, dont own a house or have any real assets. Im just a bit worried about what my employer would say. I have been through my contract and there is nothing in there about being bankrupt.. I will try to sit down with the HR Manager tomorrow and have a chat about what affect my problems would have with my employment if any.. I dont work in Finance or anything.. just an IT Techy so dont see why it would affect me. Would be a ashamed if rumours got out, but I've just got to swallow my pride and do whats best for me and my family now.

I dont think my parents would have any problem waiting until the IVA has finished before I start paying them.. if it would give an extra vote then it will all help if an IVA is a suitable option.

If I did go bankrupt.. Ive put all the details on a spreadsheet, and even with Holiday allowance and Clothes allowance.. things I didn't really put down for the IVA Expenditure.. we would still have about £200 left.. so we could use this to pay my wifes £175 to Intelligent Finance for her part of the joint loan agreement.. Would we be able to do this, or would the Court want me to use the £200 to set up an IPA to Smile and Black Horse?? Meaning we would not have enough left to pay £175 to Intelligent Finance, so my Wife would be forced to go bankrupt as well...

Thanks for all the info, its much appreciated.. Sorry I have so many questions.