is there something I can do

[Andy.B]

Hi, my name is Andy
I'm on income support, i get tax credits for 2 kids, family allowance and carers allowance for my disabled partner, my partner also gets D.L.A, i owe about £11,000 to various creditors including lloyds tsb, egg and beneficial finance and others, with all the benefits coming in we get roughly £1300 a month, with everything going out we are left with about £140 a week to live on, thats for everything, food, clothes, petrol etc, i have two loans with tsb, one really big one that's £244 a month but that's paid off in 10 months, the thing is we won't manage for another 10 months, i'm already £800 into a £900 overdraft and it's getting worse as the weeks go by as a 15 year old girl and a 13 year old boy are quite demanding and relentless in the things they need!

i was going to go for an I.V.A last year but my partner stopped me as she thought that swapping banks etc would mess our money about taking so long to change all benefits to etc and that we would be left without money for a considerable time until it was all sorted, we have nobody we could ask to lend us anything to tide us over till it was sorted, my question is.... would an I.V.A really help or is there something else i can do to help me over the next 10 months until the big tsb loan is paid?

If an I.V.A is the way to go would it be possible to actually see someone face to face about rather than online or on the phone as i would rather meet with someone and talk. Thank you in advance.

[steve532]

Hi Andy.
I think you will find it hard to get an IVA for 2 reasons 1. you are not employed. 2. an IVA is usually for debts of more than £15000. Im not an expert but have you considered talking direct to your creditors and asking if you can reduce payments?
Im sure one of the experts will advise you more
good luck

steve

[accgroup]

Hi Andy

I agree with Steve above, your debts are fairly low and you are unemployed so an IVA is unlikely to be the best option for you. Steve is right, you should firstly try to approach your creditors and arrange a reduced payment plan, explain the level of your debt and that you are struggling and see what they can offer you.

Do you have any assets that you can sell to repay some or all of the debt?

There are many advisors who you can see face to face, not just insolvency practitioners - have you considered approaching the Citizens Advice Bureau or Consumer Credit Counselling Service?

Hope this helps



AccumaGroup - A large insolvency practitioner service based in Manchester.
www.accumagroup.com

[go_4_broke]

Hi Andy

As stated in the previous posts it doesn't look like an IVA is your best bet.

But don't worry - you're not missing much.

An IVA would cost you at least £5,000 which as you can see is almost 50% of your debt. And with IVA's going the way they are you may only get around 50p in the pound which means you would end up paying £5,000 plus 50% of £11,000 = £10,500 which is damn near back where you started !

If I was in your shoes I would do this:

1) Make sure your regular payments/money/current account are NOT with Lloyds! - so they can't grab your money.

2) Offer Lloyds a much lower monthly payment, say £30/£50 or so, until things 'improve'. You should be able to get away with this if you push them hard enough.In the meantime, don't pay them.

3) Save around £400 from the money you don't pay Lloyds and stick it in a bottom draw and don't touch it. This is to pay your Bankruptcy fees if you really need to get out.

4) Go and see the CAB/CCCS as previously advised. You're most likley to be advised to do a debt management plan (if you can stand the long flog) or just go plain old Bankrupt (the bottom drawer comes in handy here).

If nothing else you've bought yourself some time so you can properly consider your options. Best of Luck !





New to the forums - but not to debt !

[Andy.B]

Hi Guys, Thanks for your advice, Unfortunately we have no assets, we live in a council house and our car is a 10 year old escort,

If we arrange with creditors to reduce payment won't that increase the amount of interest we're paying? Or can we get them to freeze it? the reason i ask is because the big tsb loan that is crippling us has almost all of the interest paid on as nearly all of the money we're paying on it is actually going on the loan, we know this because we have been tracking it online for about 18 months, then only £178 of the £244 was going on the loan and the rest was interest, now £213 is going on the loan.

I tried yesterday with Egg who i already have a loan with to get a consolidation loan to have everything all in one place but was turned down, we have an appointment to speak to a lady at tsb on thursday to see if there is anything they can do to help, but we fear that maybe we will just get deaper and deaper into debt for a quick fix solution. The only people to offer to do this for us is Beneficial Finance who i have another loan with, but at 31.8%apr even we declined this offer.

We're just so sick and sorry that we have gotten into this position because 5 years ago we never even had a bank account, we're also sick of having to say no to the kids all the time for things they want, we've never even had a holiday and i would love to be able to give the kids that! I know it's my fault and should have known better!

We really appreciate the advice given here, We will wait until we have seen the lady at tsb to see what our options are from them before i make any real decisions, again thanks a lot for the advice.

[Andy.B]

Go 4 Broke, sorry i must have been typing my reply whilst you were typing yours, Thank you that is sound advice and i certainly will consider doing what you have said if i don't get much joy with tsb, i do have an account with halifax so that is certainly an option! [:)]

[thebear29uk]

Hi Andy

I'm not an expert either and I wouldn't want to tread on anybody's toes but if I'm reading correctly in 7 months time one of your loans will be paid off and this will free up £244 per month. It seems to me there are a number of options you could consider but the one I would hesitate with would be a consolidation loan. All you are doing there is continuing the cycle of debt rather than reducing the debt. Also bear in mind that you may be committing to 5 years of repayments but during that time you will lose the tax credits and family allowance. Admittedly your children may be more self-sufficient but you need to factor this into any decision.

If you go to www.nationaldebtline.co.uk you can print off some letters to send to your creditors asking them to accept token payments and freeze the interest. You can also fill out an income and expenditure form to attach to each letter. I would also suggest you call the National Debtline on freephone 0808 808 4000. They will be able to give you some good guidance for your circumstances.

You can enter into a Debt Management Plan whereby you make reduced payments to your creditors but I've read posts where half the money you pay to the DMP company goes to them and the rest to the creditors. If you can convince the creditors that you would rather deal directly with them so that they are getting the best return available from your disposable income they may agree to doing this for 6 months. This would give you breathing space without the need for further borrowing. Also dont give up if they say no!! It is probably a reflex reaction from them. There are follow-up letters on the website asking them to reconsider.

Of course with no assets you can always consider Bankruptcy but I would suggest you read the sister site to this one on bankruptcy to see what that entails.

Regards

Dave

[go_4_broke]

Andy -

You're Welcome

Yes if you negotiate with any of your creditors DO ask them to freeze interest.

And as Bear says above DON'T go for a consolidation loan (especially at those rates !!!). There are other ways you can buy time.

And DO get the full gen on Bankruptcy, but just having it as an option you can use puts you in a better position to negotiate, because once you hit the 'B' button your creditors get nothing.

Best

New to the forums - but not to debt !