IVA advice please or options?

[uk79uk]

Hi everyone, my first post here after reading some very useful information [:D]

I was wondering if someone could help/advise me?

I owe a total approx £27k of unsecured debt, currently living at home with parents who used to charge but due to my current circumstances have let me off. I am currently unemployed, have been since october and haven't signed on yet either. Basically I need to know what options I have available. If I was to attempt arrange an IVA do payments start immediately? I take it I have to be in work otherwise I can't guarantee what I can or cannot pay.

I owe... approx

Natwest - £2700 - bank overdraft.
Cahoot - £11,000 - flexible loan
MBNA - £8000 - Credit card
SonyCard (MBNA) - £5000 - Credit card.

I also have an internet and phone subscription which are now overdue, not too sure what happens with those?

I really do not know what options I have available, I've had a bit of bad luck. I was unemployed for about a year from oct 2005 to oct 2006 and stupidly paying the credit with credit so it grew and grew plus living on the cards too. I managed to get back into work for a year but oct 2007 my contract wasn't renewed. I had/have an arrangement with the two MBNA cards to pay £71 and £48 to each of them and no interest is being charge but I have now missed one payment. I have also missed an approx £220 payment to cahoot. Those amounts I could afford to pay given the fact that I was working and that I didn't have to pay any rent/board to my parents but I can't expect them to keep me for free and I feel bad about it too! I'd rather not go bankrupt but then again if it is advisable maybe I should take that route.

So in short... 27k debt, no income and lots of stress! (5:30am and posting here instead if sleeping like a normal person!!!)

as said before I had absolutely no idea what to do.

Sorry for the long post but hopefully someone managed to get all the way through.

All advice/comments appreciated.

Thanks

[aguise]

Hi there uk79 and welcome to the forum.
I am like you I dont sleep too well and rise early most of the time.
An iva is not viable as you have no income, a debt managment plan still hard with little income, bankrupcy may be your best option. Please wait for other answers as I am in an iva,so pleas wait for the technical experts to answer.

Ang

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

[Beechy]

Hi UK79UK
Welcome to the forum.

I think you need to make a decision as soon as possible or your health is going to start to suffer.

If you circumstances are unlikely to change in the short term Bankruptcy may be your best option.

You are definitely insolvent as you cannot meet your liabilities as they fall due.

If you want any advice on the Bankruptcy process please post back here and I and other posters will try to help.

I know it is easy to say but trry not to worry, you have taken the first step of dealing with the problem by posting here.

Dave Beech

[pbeck]

If you can get a job then we can look again at your circumstances, but yes, at the moment you can't do any kind of debt repayment at all.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[uk79uk]

Hi and thanks for the replies, they are what I expected so no shock there. I would like to learn more about bankruptcy but my understanding is that you still pay what you can afford for X amount of time? Am I correct in saying that I am very unlikely to be made bankrupt, so hanging out until I find work and then arranging an IVA is still possibly the best option because I won't have the usual bankruptcy restrictions placed upon me. Thanks again

[pbeck]

You can find out about bankruptcy here http://www.insolvency.gov.uk/guidanceleaflets/
guidetobankruptcy/guidetobankruptcy.htm . Bankruptcy restrictions are not particularly onerous for someone living at their parent home and who is not running a business.

It is unlikely that the creditors you have will make you bankrupt as for them it is throwing good money after bad and they'd certainly get nothing out of it.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[Skippy]

I went BR last March and to be honest the restrictions haven't affected me very much at all - I don't want credit and they don't affect my job. If you aren't working and have no assets I would seriously consider BR - it will allow you to start again with a clean slate and without the stress the phone calls from creditors.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[MelanieGiles]

With bankruptcy, if you have surplus income in excess of £80 per month, it is quite likely that you will be asked to pay ongoing contributions under either an Income Payments Agreement of Order for a maximum three year period. The OR operates a sliding scale to determine how much you actually pay, which ranges from 50% to 70% of your surplus income.

Have a look at the Insolvency Service's website which is very informative on bankruptcy matters.

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

[uk79uk]

Well it looks as if I may have to go BR, I called all of my creditors today who were mostly unhelpful, understandable I guess. Cahoot were very pleasant and said they would hold the account for as long as possible and if I could make any payment at anytime that would be great. MBNA advised me that fees and interested will be put back onto my account because I am not making payments towards my current arrangement. Natwest in my eyes are crooks, they returned a £22.50 direct debit charging me £38 for the pleasure which took me over my overdraft, i explained my situation but they were not interested and also advised me that they will be charging an extra £28 per month while I am over my agreed overdraft. I mentioned that I have zero income and these excessive charges are pushing me towards BR but they said that they are justified and will stand (spoke with 2 people and received the same answer).

So much for calling my creditors and trying to sort things out!

[Adam Davies]

Hi
On the information supplied bankruptcy would be your best option.
Do you think that you could raise the £485 fees ?

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[uk79uk]

£485 fees, maybe not in an instant but beg, borrow or perhaps sell the family cat... you never know.

I have so many questions to ask, is this the right place to ask them or could you point me in the right direction to someone who can advise me.

Here are a few for now but please do tell me if I should be asking someone else!

How does BR work with me being out of work and currently living with my parents?

Are additional conditions likely to be applied?

Would the IPA start from when I start working again? I take it one would be put in place?

Once I get back into work (ASAP) would I be allowed to pay my parents the rent that I used to pay them? I can't expect them to keep me forever! or even move out?

Thanks

[MelanieGiles]

You can ask away here on the forum, because not only do you benefit from the answers, but so do the other forum members as well.

There is no effect on the bankruptcy if you are out of work and living with your parents, although you will be obliged to keep your trustee informed of changes of circumstances, and this could result in an IPA or IPO being set. You will not be allowed to pay back your parents, as this would be paying a creditor which is a preference.

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

[uk79uk]

Thank you for the reply

Sorry I wasn't very clear with part of my above post. What I meant was... When I start working again, am I allowed to pay rent to my parents (moving forward)? I don't have any official documentation as such from them as proof that I pay them monthly. Could this be an issue if an IPA/IPO was put into place?

Are there people that I can speak to about the whole BR thing? Maybe someone who can advise me the major points? Its much easier to have someone tell you rather than read it online because a lot of the information online is quite vague. I could obviously ask questions all day long but I don't really know if I am asking the right things. I guess I just want to make sure that I make the right decision and don't jump in to something that I might regret later down the line.

I get the feeling that IVA's and BR affect your credit rating on pretty much the same level and for about the same period of time too?

Thanks again for taking the time to help me.

[MelanieGiles]

Yes you will be able to pay rent to your parents, and they will need to provide a letter to the IP confirming how much they receive.

I can recommend Gill Hankey at the Bankruptcy Advisory Service - google it and you will get the telephone number - or your local CAB will also be able to help. And you are correct about credit ratings.

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

[emma_t]

Hi uk79uk

It must seem a very bleak picture for you right now with no where to turn, but there is always a solution for every person in debt.
I am not a qualified expert myself and you already seem to have had lots of advice on that front but I just wanted to say I was in a very bad way last year and it was amazing to find the forum and all the great people who spend so much time replying to posts with advice and experiance of what you are going through.
it is a fantastic place to come and ask questions or if you feel in need of a bit of support.
Good luck and I hope things improve for you very soon and you get a decent nights sleep[:)]
Emma x