My first steps towards an IVA and need some help!

[DrowinginDebt]

Hi there, I've finally plucked up the courage and taken my head out of the sand and decided to sort my dreadful finances out! I'm about 53K in debt and have been robbing Peter to pay Paul for months now but have finally run out of credit card cheques (and credit!) I've just got a few queries before exploring my options. I have calculated that I would have £350 disposable income for an IVA, would this be enough for my £53K debts? Also I have read some postings regarding having to sell your car if it is worth over 3K, is this correct? My car is worth about £7k and am reluctant to trade it in for an older one as I really need a reliable car for work as I work shifts and quite often start work before public transport has even started so would I be able to keep it? I have an interest only mortgage but a secured loan on it so basically have no equity at the moment, would I still have to do the equity release in year 4? I have never been behind with my payments but am currently 1 - 2 months behind paying my credit cards and the phone calls have started, should I send them a token payment of say £5 with a covering letter explaining that I am in the process of sorting my finances out? Any help or advice would be greatly appreciated. Any many thanks to all for posting advice on here, it's a great source of info and a comfort to know that I'm not the only in this situation. Many thanks.

[Adam Davies]

Hi
£350 per month will just about scrape in with a 25p dividend,However some creditors are insisting on a 40-45p minimum dividend so please post details of your creditors.Your car should be acceptable and I would send a token payment while you decide what you are going to do .
Once,and if,you decide on an IVA then seek your IPs advice on paying creditors.Some say make dividend payments and others to make no payments.
It is also likely that your will have the equity clause within your IVA as house prices will more than likely rise in five years but you might be lucky and have your IP offer a one year extension to your IVA instead of this.
Good luck and please post more details.
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[DrowinginDebt]

Thanks for replying. My main creditor is Lloyds Bank, I have 2 loans totalling £14k with them, plus a credit card of £5500 plus an overdraft of £800. I have a loan with Citifinancial of £8000, plus credit cards with Virgin, Barclaycard, Morgan Stanley, Tesco, Sainsburys and the Post Office, all with balances of between £2k and £5K. Morgan Stanley are harrassing me non stop, I'm getting between 5 and 6 calls a day both at home and at work!

[Adam Davies]

Hi
Well none of those creditors are insisting on a 40p plus dividend at the moment.
Regards

Andy Davie
IVA.co.uk Spokesperson

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

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

[MelanieGiles]

Hi Drowningindebt

From the numbers you have posted it certainly looks as if you would be able to propose and IVA, which would not affect your car as presumably this is needed for transport to and from work?

The equity clause would likely be included within the IVA, but if you have little or no equity this may have little effect on the eventual outcome of your proposal. As you are already 2 months payments behind already, you would be very wise to take professional advice soon with regard to your options, which also include bankruptcy proceedings and a Debt Management Programme.

I deal with most of the creditors on your list regularly, and they are generally supportive of voluntary arrangements so long as they are being proposed for good reasons, and with full consideration on your part of the options available.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk