IVA not viable

[Anna Karenina]

I've just found out that an IVA is not viable for my husband and feel utterly despondent - it was light at the end of a very long tunnel that has now been snuffed out. It looks like a DMP is his next option if he can get his creditors to agree to it. Does anyone have any advice?

[MelanieGiles]

Hi Anna

Do you know why an IVA is not a viable option for your husband? How much disposable income does he have, and how much does he owe?

[Moneystinks]

Hi stick around there are loads of lovely people on here who can offer lots of useful advice good luck X

[Anna Karenina]

Hi
It's because of my income - I work to pay for my daughers' school fees and although the debts are solely his, my earnings are put into the overall calculations and I understand that his creditors will not find this acceptable.

I'm feeling so low about the whole thing and would love to know that there is a way out of this without my daughters having to pay the price for something that is not their fault.

[MelanieGiles]

I have assessed a very similar case recently (perhaps it is your case?) and am afraid that creditors will not entertain the idea that you have not benefitted from your husband's debts.

If your earnings have been entirely used to fund private education, then this means that your husband's income has been used the pay the household bills, and I assume that this has led to come of his debts being incurred.

Regardless of whether these are legally in his name, his creditors will take the view that you have benefitted and therefore that your income should firstly be used to repay them, with private education being a secondary priority.

You ought to be aware that the same objections may well be made under DMP proceedings, and private education would certainly not be allowed under bankruptcy proceedings.

Is there any particular reasons why you feel your daughter needs to be educated outside of the state system?

[Anna Karenina]

Melanie, I'm mortified to realise that it is indeed my case! I'm afraid I've only just made the connection.

My earnings partly fund the school fees and partly pay for my own commitments. The history is a little more convoluted unfortunatley that it would appear. My husband ran his own company for a number of years and he was able to service his debts, when his company started to struggle he started to drink heavily and when the company finally folded, he had a complete breakdown and we separated. During our separation things got totally out of control and he was unable to work.

We did get back together again after about a year and since then I have been trying to get things straight again (dealing with these things is not his strong point). I have successfully managed to get some of his creditors to accept payment plans.

My daughters have been at the same school for the last 5 years and my eldest daughter is due to start senior school in September. They struggled enormously with the separation and the school was the only thing at the time that wasn't in a state of flux - I was forced to sell our home and my jewellery. They are both above averagely bright (clearly not inherited from their mother!) and my eldest daughter is a little 'quirky' (as an ex-teacher myself, I suspect she is G&T) and would be a prime target for bullying in a different educational environment. We live, unfortunately, in an area with very poor state schooling - in fact our local secondary school has just appeared in the top 300 failing schools. I would do anything to protect them from any further distress and these last few years have been very hard on them. The irony is that if I put my life insurance policy in trust and dropped dead tomorrow they would be in a better situation than they would appear to be now! It makes me feel as if there is no point working as hard as I do.

[james.c]

Hi Anna

Whilst I share your upset and offer you sympathy during this stressfull time, i think with all your respect some of the justfication for private school is nothing more than snobery.

I wish I i could buy more things for my 4 month old twins or pay for an helper etc, but i cant becuase of my IVA. But at least i am able to pay for what the basics, the luxurys will have to wait till after the IVA, irrespective of how we get in to debt we have to deal with it and get on it.

IVA lets you write some of the debt of but in return you have to be commited to it and loose out on luxurys, the same luxurys that probably got us in to debt

[MelanieGiles]

Sorry - did not mean to embarrass you, and the background information you have provided is useful to understand the causes of your husband's current debt problems.

Your first priority is to your family, and given that you have had some difficulties in the past that you are now resolving with hubby, that has to be your number one concern.

Children are so precious, and as parents we can only do our best by them to give them a good start in life. If you don't feel that the state system in your area can provide this, then you must follow your instincts in this regard, even if this means that you have to address your husband's debts in a different manner.

It will take him a long time to repay his debts under a DMP, but you can always consider an IVA in the future when the children have finished their education - however I rather suspect that with the savings you will make on these costs you will be able to repay the debts at a much quicker rate.

You are clearly a fabulous Mum, and with some discipline in the household budget (perhpas you ought to take over the finances!), and a good DMP provider behind you, I am sure that you will work this out. But do let us know how you get on with getting the creditors agreement to your plan - which after all perhaps offers them a better solution in the long run if they will eventually get paid in full.

I sincerely wish you the very best of luck.

[animaleyes76]

james c

couldn't disagree more re the snobbery thing.

If my kids (and i don't have any) were in private school and i had to go into an iva i'd be doing EVERYTHING to keep them there even if it took 3 jobs.

It's not about snobbery it's about a decent education, something that's lacking in todays target driven comps.

[Anna Karenina]

No need to apologise Melanie, I clearly didn't put two and two together and thank you for your kind words (I now do control the household finances!).

We are hoping that the debts will be cleared within 5 or 6 years if we can get his creditors to agree to a DMP. He now has a permanent job and we are intending that his annual bonuses will be paid to his creditors which should clear the debts much more quickly.

I have to add Melanie, that you have an amazing team - kind and patient. I understand that you will be speaking to my husband tomorrow with some further information that may help.

James C - your twins are beautiful. I may sound like a snob but I'm not - I just want the best for my daughters. If it's any consolation, the luxuries went a long time ago and happily accept it may be many many years before they show any sign of returning, if at all. I am utterly committed to helping my husband get himself back on his feet and that includes clearing his debts - if needs be by getting a second job. As a parent yourself, I'm sure you understand the desire to wrap your children in cotton wool and keep them safe. Enjoy your twins - they grow up so fast.

[animaleyes76]

Anna, I totally agree. You're in good hands with Melanie's team )

Got my fingers x'd things start to work out the way you want )

[Moneystinks]

I too don't think it is snobbery. I am very fortunate that my son goes to a good RC primary school with Outstanding from ofsted - although it is not private it costs a fortune to keep up the extra lessons/field trips etc. I have paid £217 today for various things to school leaving us with not very much at all, but I am prepared to go cap in hand to family to ensure he gets a good education. I am a young mother who has constantly been critised and judged, I am not, and will not compromise his education this school suits him and his needs, I have changed his school 18 months ago as his previous school was under achieving, also it didn't suit him, he just wasn't ever settled. I can't explain on here it just has a different feel when you walk in, he is 9 and noticed straight away without me saying a word! Good luck Anna XX

[Anna Karenina]

Animaleyes76

Thank you for your words of support - it's been a very long few years and we just want to get the debts paid so we can get on with our lives.

[MelanieGiles]

If you can repay those debts within five to six years, then the advice to offer a DMP rather than a formal insolvency solution is absolutely spot on. I will speak with your hubby to reiterate this, as I am sure he is a little nervous and confused at the moment. W

hat a lucky guy to have such a supportive wife and one who is prepared to work at this together. In a few months time you will be laughing together as a family, having regained control of your household budget. I promise!

[Viki.W]

I just wanted to wish you good luck anna, this must be so hard for you. You'll get great support and advice on this forum so please stick around and keep posting. Viki X