Please help somebody

[kathr]

Hi everyone, just joined as I am desperate for help. I have put off doing anything about my debt for months, but realise it won't go away until I do something about it. The question is what to actually do? I have approximately £38,000 of debt consisting of 2 loans, 1 overdraft and 3 credit cards. After a period of unemployment, I now have a job where I live in. I consequently pay no rent or any utility bills except my own telephone line, internet etc. I have done a CCCS debt management plan, but have not yet signed it and sent it back. Because I do not have any bills to pay they are saying that I can afford half my salary into the plan. The worry I have is that I may not always be in this job and may in the future have to pay rent, elec, gas etc., as most people do. The other thing is that I am 57 next month and in "normal" circumstances would like to retire at the age of 60, I have always worked but 6 years ago I had a heart attack, and 5 years ago had breast cancer. (My breast cancer has been given the all clear now.) I am wondering whether an IVA or Bankruptcy would be the best. If I make myself bankrupt will I have to pay anything to my creditors? I am really unsure what to do, and am sick with worry. I have had one letter from a solicitor saying if I don't reply within 7 days, they will take me to court. Please help somebody.

[luluj]

Firstly welcome to the forum - you have come to the right place for support and advice. We have all or are al going through problems that have happened over time !

Before you sign for a DMP, why not ring a few IVA firms to see if they can offer you further advice - Melanie who posts on this forum is super and all recommend her.

Our IVA is with Debt Free Direct, and although some have had issues, personally I haven't.

Don't agree to anything if you cannot be sure you can afford it.

Over time all our circumstances change - hence the need for regular reviews - whilst in an IVA you have an annual review to lookat your circumstances and if mid year your job was to change then you could ask for a variation to reduce payments as necessary.

Once in the swing of an IVA everything does get better and you can live your life again - however on a budget - that actually is a challenge but very satisfying !

[ianmillington]

Yes, welcome

There are a number of options that spring to mind. However, I think there needs to an end-point to the plan.

The one option that clearly fits in with your retirement plan will be bankruptcy, where at worst you'll have an income payments order that will last for 3 years. That's not much use, however if you lose your job (and your home)due to going bankrupt. An IVA would seem to be your next best option given that it will typically last for 5 years and then it's done. So, it will make sense for you to have a full financial review so that you come up with the right option. For example based on your figures to clear your debts in 5 years via the proposed CCCS arrangement you'll need to pay a minimum of £633 per month. How much are they suggesting you pay each month? Did they discuss and discount the other solutions? If so did they say why bankruptcy/IVA solutions are not in your interest?

Ian

[Sarah Nancollas]

Hi

You need to take some professional advice from a licensed Insolvency Practitioner. R3 is the main trade assocication for IP's and you can find details of all their members on www.r3.org.uk. The initial advice should all be free of charge.

Although IVAs typically last for 5 years there are no hard and fast rules so they can last for less (or more) than that, subject to creditor approval. We have a some clients whose IVAs will end on their retirement dates and are therefore less than the typical 5 years.

[kathr]

Thanks for your responses. To explain a little more - when you apply via CCCS, you input your income and expenditure online, this then brings up a "remedy" based on your input. They then send you forms to fill in so that they manage your DMP, you pay them, they pay the creditors. Because I have no rent, elec, gas, council tax, etc., they say I have disposable income of £463 out of £949 take home pay, and that I would pay this to them monthly for them to distribute. I do not believe I would lose my home or job if I declared bankruptcy, as it is not in a high risk group. CCCS don't actually discuss anything with you, unless you ring them. I did ring them once asking about bankruptcy and they said it was my debt and I should pay and I had disposable income now. (Should have done it all when I was unemployed?!!) They also made me change a couple of things on the forms, I smoke but they made me put less expenditure for this monthly, plus we have 4 cats. The cats do not live with us, as the jobs we have now, we cannot have pets in the accommodation. So that I in fact HAD a job, we asked my daughter to look after them. One of them had a major operation and is thus on a prescription diet, for which I pay, plus their cat litter etc. I give my daughter £70 a month for this. All the cats eat the same food even though the other 3 don't need it as you can't really tell them not to?! CCCS said I should separate the cats so they do have different cheaper food. So my outgoings are actually more than they say anyway.
The other thing I didn't say was that my partner is Canadian, and we really want to go to Canada to live in a year or two. How would this affect things?
I don't own anything of value. My car is a 1998 model and is not worth much.
Hope I've included all you want to know. Think I need to chat to someone really.

[MelanieGiles]

Given the circumstances that you describe, and if there are no reasons to suspect that being bankrupt would affect your employment, this amy well be a route worth considering as you have no assets which would be lost under such proceedings - and you can then look forward to your retirement without ongoing debt worries.

But as the other posters have already commented, professional advice is the best way forward.

[ianmillington]

So basically all that has been suggested is a DMP which from what you say you have already acknowledged is unworkable?

You need to be taken through all your options, preferably at a meeting. I would suggest you fix up a meeting with a local IP and go through IVA and bankruptcy (both of which seem far more realistic options than what is currently proposed) and have both options fully explained to you. I think where you are at now amply demonstrates the weakness of obtaining advice at a distance.

The vast majority of IPs will be quite happy have a free meeting with you, and if the answer is bankruptcy will generally be able to put you in touch with someone who can help you with the paperwork.

Ian