Is IVA really not for me?

[hooked-on-debt]

I have just been told that my wife and I don't qualify for IVA because we have negative our disposbale income - which is exactly our problem. We owe about £35 000 and both work full time. Can anyone advise please! We feel so hopelessly desperate.

[MelanieGiles]

Do you own a property with equity, or have any other assets which could be sold to enable an offer of settlement to be made to your creditors? Or do you have any other way of increasing your income - part-time job or working overtime?

If not, then it would seem that bankruptcy may well be the best option to ensure a debt-free future for you and your wife.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[hooked-on-debt]

Thanks for the reply Melanie. We own a property but have no equity to release. I have recently taken up a second job - so has my wife. But we feel it will be a long time before we get things under control - if at all. The pressure of being hassled is overwhelming and we are increasingly finding it hard to put food on the table for the children?

[hooked-on-debt]

Would debt management plan be an option for us?

[MelanieGiles]

But you don't have any disposable income to offer to creditors do you? What type of mortgage do you have - repayment or interest only. If it is a repayment, why not move to interest only for a while to see how much extra cash that would leave you with each month. Or maybe think of selling up and moving to cheaper rented accomodation? This may then release enough money to fund IVA payments.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[freelili]

Hi

when you say you have a negative disposible income, does that mean you have no extra after paying all of your utilities food and secured debts only?

or when you pay all of your debts including loans, etc? I have debts of 32,000 am single mom and worked part time and was able to offer 350 per month if I didnt pay my creditors, so this doesnt quite seem right to me.

LILY

[hooked-on-debt]

Hi freelili
What I meant was that after paying all our debts - ie mortgage, loans, credit cards, living expenses tc, we remain with nothing and sometimes we struggle to cover evrything. Which is why we were hoping for a way in which we can get most debts together and make affordable payments. Having looked at our situation, we actually owe about £25000 that in the form of an unsecured loan and the rest in credit and store cards. We pay just over a thousand pounds a month and we are detrmined to pay off everthing - only it feels like we are choking before we get there.Our combined net income is about £3400.
I would really appreciate any advice on thie matter. Is anyone knowledgeable about DMPs?

[freelili]

You may qualify for an IVA then

Work out what you really need without paying any of your creditors (unsecured loans/credit store /cards/car loans (not car hp, this is secured) and see what you have left if its around 300 pounds or more you in with a chance. I am not an expert just another person in debt for instance I had 350 left over if I didnt pay my unsecured loans and I owe 32,000

You need to contact several IVA companies to see where you stand. Dont go with the first sympathietic ear and Dont be ashamed or guilty, IVA companies will earn from you and are working for/with you. I am not sure I am allowed to say this but I would try Thomas Charles first, they post on here and from reading another post today they will give it to you straight.

Take it from there, there are several things you will need to do then but try this first and post back.

I am so glad you came back because I wasnt convinced you meant negative after secured debts/essentials

Good luck

LILY

[DebtDummy]

Hello hooked-on-debt and welcome.I am not an expert. Just someone waiting for her and hubby's IVA proposal to arrive in order to sign it, return it and get it filed. When we first did our figures we thought we could not afford an IVA either. You say you don't have enough money left over at the end of the month to afford an IVA. Make sure you have your figures correct.

Take the total of your incomes including child benefit. Add up your expenditures: mortgage, council tax, utilities,petrol, secured loans(loans secured on your house), HP purchases, food,clothes, etc. DO NOT deduct your UNsecured loan payments, credit cards, store cards, catalogues.

Take the income figure and minus your expenditures. This difference is the amount you have left over to pay your IVA with. You must have at least £250. Now, some of your expenditures may be decreased because you have to be realistic. I had SKY plus with all the trimmings monthly £54.75 pre-IVA, but £18 monthly post-IVA. See the difference in figures? Oh, and the hair salon, and that monthly treat, and-get my meaning?

Recalculate and see what figures you get this time. If you find there is still not enough look into the DMP. DMPs are not legally binding and the interest is not frozen.The creditors will ring you for extra money. Well, they did me anyway and we had a DMP for 2 months (long story)[:)]

Good luck and post so we can see how you managed your debt. Your solution or idea may benefit someone in similiar circumstances.

All I have left is my humour.

[hooked-on-debt]

Hello freelili and debtdummy.
Thank you for your advice. It makes a lot of sense. After recalculating my figures and talking to the mortgage lender to switch my payments to 'interest only', I seem to have over £500.00 left over. That is, after deducting all that we need to live on as well as hps.My original figures included an hp for a loan vehicle. I have just e-mailed Thomas Charles and am keeping my fingers crossed. I had given up on this avenue after 2 companies told me I dont even qualify for a DMP. Thank you all. Keep you posted.

[neverending]

Good Luck,you are in a strong position and my advice would be to make sure that you do not UNDERESTIMATE your living expenses,even if you had only £400 per month disposible income for an IVA it will return approx 15k to your creditors.....a 60% dividend

[freelili]

Hello HOD

One more thing to bear in mind, you need to be realistic in your living allowance, I mean it meeds to be quite basic )no frills, sky full package sky TV) but realistically affordable for a 5 year stint, add something for emergencies also, and dental,prescriptions etc.

Shop around and dont be ashamed as your IP needs to work with/for you and your creditors, you need to feel comfortable with them. Its a mine field out there, some people have had bad experiences with unrealistic proposals and up front fees. Thomas Charles are a fine company

Good luck and keep posting

LILY

[hooked-on-debt]

Hi Lily,

I have today spoken to someone form Thomas Charles and must say we had a grown up converstion for the first time. The other two companies just asked for figures and then dismissed my case with some flimsy reason. This lady gave me a chance to explain my situation as it is and sought clarification. She has told me what to check out while she does her side of things and will be calling me agin to see whre we go form here.

[freelili]

Have everything crossed for you HOD

Come back and let us know, do give yourself enough to live on though, 5 years is a long time.

good luck

LILY