New to IVA - hoping its the right choice

[Spark28]

Morning Folks,

Newbie here! I am in a pit of no hope lately financially. £29,000 worth of credit card/loan debt, paying only minimum payments and nothing left over so I always re-spend.

I am married, mother to a young baby - but the IVA is just for me. Our house is mortgaged but soley in my husbands name so that I have been assured, is protected, as this was a major concern.

I dont see any other way to resolve the mounting debt, yet I still feel nervous as to if I am making the right decision. I have started the process with McCambridge Duffy after seeing several recommendations on here (thanks for that!) Part of me just wants this all organised and done and then I can stop worrying. I have so far managed to make all the minmum payments, but I have been advised by Stepchange and National Debt Helpline to stop, make token payments and wait for the IVA, I dont feel comfortable doing this, but it would give me ALOT of breathing room whilst we wait. I feel so ashamed in my debt amount, and like I've let my husband down somewhat for not being more in control of our financial situation. Alas, there is little I can do now except look to the future.

I dont know exactly what I am hoping to get out of sharing this with you all, but being able to be honest, even if anonymously is nice. I guess some reassurance wouldnt go a miss either

Thanks for reading my story...

[Foggy]

Welcome Spark

First I have to say that you have made an excellent choice of provider and one that has a regular contributor on forum, who can help with any issues if your case handler disappoints.

Most of us, myself included, stopped making any payments (token payments just go down the drain) once we had got the ball rolling ... time it so that you can squirrel away one or, better still, two lots of what would have been monthly repayments to your unsecured creditors. This will give you an emergency fund -- don't squander it .... you will need it at some point.

Don't feel ashamed --- you are FAR from alone, but you are one of the few doing anything constructive to deal with the problems. My debt was, alarmingly, not far short of £65,000 between the now-ex and myself !!

Do not hesitate to ask any questions -- none of them will be stupid, you will be on a steep learning curve for a while. Communication with your case worker is key, many problems that are brought up here are cases of mis-communication and a good chat sorts them out.

[Spark28]

Thanks! Its still early days so I am hoping it doesnt take too long.

Do you know how it works re: bonus. I can earn bonus from my employer but its on a as and when I hit targets, will this need to be paid into my IVA also?

From reading other posts, I get the impression you have to justify every penny for your yearly review, is this true?

I just wish I could magic some money together.

[Foggy]

Thanks! Its still early days so I am hoping it doesnt take too long.

Do you know how it works re: bonus. I can earn bonus from my employer but its on a as and when I hit targets, will this need to be paid into my IVA also?

From reading other posts, I get the impression you have to justify every penny for your yearly review, is this true?

I just wish I could magic some money together.

You only need justify those that go beyond the accepted guideline figures, but you do have to provide evidence of things like council tax, insurances, rent, etc. Housekeeping is an amount depending upon the family make up .... so much for a couple, plus an amount for child(ren).

Bonus payments and overtime needs to be paid into the IVA as and when you get them and are usually calculated so that the amount equivalent to 10% of your agreed monthly income is disregarded and what is left is split 50/50.

So -- say you earn £1200 a month and get a bonus of £300 one month --- the 10% disregard is £120 (you keep that) leaving £ £180 to be split 50/50. So you keep £210 and pay over £90 to the IVA.

[Spark28]

Ah ok that makes sense! Thank you so much. I'll obviously double check that with my IP but I am happy with what to expect at least. Just gathering all the evidence now and filling all the paperwork in. Hopefully all over and done with soon!

Whats the best way going forward? I usually use cash for most things but presumably its best to use the debit card for everything so you've got proof of spending for petrol/food shop ect? Is keeping a spreadsheet handy? Just trying to get prepared!

Failure to prepare, is preparing to fail after all

Thanks

[Foggy]

You don't need to go into too much detail regarding petrol/food shop ect ... you will simply agree the amount at the outset and, if within guidelines, it is usually accepted. A spreadsheet is useful as you can see where you might be drifting before it becomes a problem.

What I did in the early days was to open two cashminder accounts. From one came all the DD's etc .... pay went into that I left enough to cover the direct debits (paid everything I could by monthly DD). The rest I transferred to the 2nd account, which was for housekeeping, petrol, etc. From that, each week, I withdrew cash for the weekly shop and petrol and only spent with cash (so, no cash, didn't buy it). Most weeks I had a few quid left over which I popped into a "rainy day jar". In the first months I even sub-divided it into the agreed amounts and spending categories !

Although I had a debit card I didn't have the courage to use plastic at all during my IVA --- and it took a few months afterwards to screw up that courage !

[moira717]

Hello and welcome, I took out an iva earlier this year. Like you all debts mine. Luckily house protected as mortgage in husband's name, although had to forego any possible equity by a year extension. I felt like a total failure but now 3 months on am managing my payments and looking to the future. Taking out an iva the hardest but best decision I have made. Good luck

[Spark28]

Thanks for your help, I am just getting the proposal all drafted now.

Moria717 - you were made to extend so you didnt have to release equity from your husbands mortgage, is that right? I hope that doesnt happen to me. Its all very scary at the moment. 5 years seems like such a long time.