My finances are in a mess

[john_g]

My finances are in a mess. I owe approx 50k to around 7 different creditors (credit card companies and a car finance company), none of these are currently secured against my home.

I have approx 25k equity in my home and I earn around 36k a year.

How would the experts reccomend I address the self inflicted situation that i currently find myself in? My monthly outgoings are approx 1000k a month. I would like to point out I cannot consider bankruptcy due to the nature of my employment

[rayb]

Hi and welcome to the forum. I would suggest maybe a call to your local Citizens Advice Bureau or alternatively contact Melanie who comes highly recommended on this site. You may actually be able to offer a Full and final settlement using the 25k equity you have in your home. An expert will be along shortly to fully answer your question

[pbeck]

I think it's unlikely that the creditors would accept just the equity in your home as a full and final settlement. If you were thinking of an IVA then you would be expected to make monthly contributions for 5 years according to what your budget indicated you could afford, and then remortgage up to 85% loan to value towards the end of the term.

You may be better off going on to a DMP if you could afford more than say £500 per month as, after 5 years of that, you'd have only £20K debt left (assuming interest stopped and DMP charges paid by the creditors), then hopefully the credit crunch would be over and you could remortgage after 5 years to clear the remainder of the debt.

[plasticdaft]

You mention being unable to consider BR due to your employment,make sure that an IVA would have no impact either,what do you do??

[luluj]

It depends if you want the security of knowing that interest is frozen for five years via an IVA or whether you are ok with the possible interest coming back at you or creditors demanding all their money via a DMP.....personally Bankruptcy was not an option for me due to my job, DMP was the suggested route due to the amount we could offer back each month however we wanted the security of knowing that we were protected from interest being added further and therefore opted to go the IVA route.

Because we had more than 40% of our earnings paid towards secured loans on the house, we sold our house and went into rented to ensure the IVA was approved - best thing we ever did!

[indebtforever]

speak to some ip`s on here they will go through your best options with you when they get more details of the case from you

good luck

[MelanieGiles]

An IVA will only be an option for you if you could not demostrate that creditors could be repaid within a 7 year period. Given your equity position, and the indication that you could make relatively substantial monthly repayments, I think a DMP would perhaps be a better option for you and your creditors, but specific professional advice from an insolvency practitioner would help you to make a decision.