Debt crisis looming

[Goingunder]

Hello,

Would be grateful for anyone's advice/opinion on our debt problem, don't know which way to turn.

Situation is this;

Have a mortgaged property and owe £96,000 - no arrears (yet). Estimated equity in the region of £50,000 - tried to sell (on the market for 12 months, no joy despite reducing price by nearly £ 20,0000.

Owe approx' £85,000 on unsecured loans/credit cards. Earn enough to pay debt but not live, nothing left once everything paid..... this has led us to make the mistake of using debt to pay debt and now we are up to the max.

Next month will not be able to pay all debt and live... considered DMP but don't think can take being hounded and taken to court, scared of Iva and it's consequences. Ideally I'd like to go to the bank and see if they can consolidate but credit rating probably not great due to some late payments etc.

Please help.

[kallis3]

Hi and welcome to the forum.

Don't worry - you've come to the right place for some support and free advice.

An IVA sounds like a good route for you to follow - DMP might take some time and consolidation is often not a good idea!!

Take some advice from a professional - visit www.iva.com and speak to one or two companies. The advice is free and impartial.

[Goingunder]

Thanks for your reply and welcome, feeling pretty desperate at the moment.

When able to think clearly can probably see that consolidation is unrealistic, hoped it might just get us through until the house sold. The equity would have cleared our credit cards and we would have just continued to pay the loans.

Wondering what life is like on an IVA? Is all disposable income taken including any overtime?

[kallis3]

Obviously everything is individual, hence the title!

You will have allowances for your household outgoings and also such things as dental, prescriptions, haircuts, etc. It is all about your disposable income and usually overtime is done on a 10% (on your normal income which you are allowed to keep) then 50/50 basis (you get 50% of the remainder, as does your IVA)

Whilst speaking to a professional is always advised, the forum is also here for any support you may need.

[Goingunder]

Thanks! Appreciate your advice. Hope time speeds through for you to completion.

[kallis3]

We read so many positive posts on here from posters who have completed their IVA's.

Give one of the professionals a ring - it can only help you.

[kazzafunk]

Hi goingunder. Our IVA has just started but I lived as though we were in the IVA last month. It wasn't that bad really. It is the sense of relief that I enjoy more than anything. It has taught me that when I was feeling ill ( I have a chronic condition) I would just go out and spend to make me feel better. Now I think twice. If you go into an IVA the best thing to do is treat is like a 5 year loan. It's what I have done, and it take away any sense of shame or failure.
It's not for everyone but for us it feels at the moment like the best thing in the world!
Good luck

[Goingunder]

Hi Kazzafunk,

Thanks for the reply and good advice.
I do feel totally ashamed and particularly worried about the impact on my son. He's nearly 15 and this is the last thing he needs right now.

It's all my fault... I left nursing when he was little with a pipe dream of running a complementary therapy business. Realized way too late that it was never going to work. Just been offered a full time post but it's too late to make a real difference now as we still wont be able to pay our debt and live.

Best of luck with your IVA, hope it's finished before you know it.

[kallis3]

Let us know what you decide to do Goingunder.

I would accept the full time post and then sort your finances out.

[kazzafunk]

Thank you. I'm not under any illusions that it will be a walk in the park. However, Mike Peoples who posts on here once told me - it's not meant to be a punishment and although there are going to be bills that stretch us sometimes, we are going to be able to carry on with our life without the threat hanging over us.
Due to my ill health we do have the heating on 24/7 in the winter and it worried me as our oil bill is quite high annually. However, it was all accepted so knowing we won't have to break into other budgets to pay the bills is a great relief.

[Foggy]

Hi Goingunder --- first thing I'd like to say ( apart from "Welcome" ... where are my manners?) is .... do not feel ashamed. Let's face it, the last few years have shown us that even the banks and governments can't make ends meet -- so why is it so bad when we mess up too ? We are, however, doing better than them in sorting ourselves out :0)

You keep saying you can make the bills but can't live ... well, with an IVA properly worked out and put forward the emphasis will be on making sure you CAN live and pay the essential outgoings too .... only then, what is left is used to pay the loans.

Have a word or two with a few of our experts or firms recommended on www.iva.com. For one thing it will help to have a sympathetic ear to help you get things straight in your mind.

Then come back and ask as many questions as you need ( no such thing as a silly question)or just have a chat, a rant, laugh or cry ---- there is someone here almost all of the time.

Hang on in there

[KAYKAY]

"this has led us to make the mistake of using debt to pay debt and now we are up to the max."

Oh my goodness, how familiar does that sound.... that was me and my husband six years ago. We chose the IVA route and have never looked back. Yes you have to cut your cloth, but the most rewarding feeling was being able to go to the supermarket to buy the weekly groceries with cash, (which was not adding to our debt) and not wondering if the card will be rejected.

We make our final payment on Tuesday, and boy does it feel good.

You will have difficult times ahead and it won't be easy, but on the other side is the prospect of a good life with no debt. Despite some negative postings about IVA's (not suited to everyone), it was the best thing we ever did.

[MelanieGiles]

I would definately find out a little more about all of the debt solutiuons available to you - you may be suprised at how flexible IVAs are these days, and that you are allowed to keep more of your overtime than needs to be paid to creditors!

If you are merely working your fingers to the bone to meet debt repayments each month, there has to be better way forward for you to regularise your finances once and for all and start looking to the future. Best of luck.

[Goingunder]

Hi everyone,

Thank you so much for taking the time to reply... we really appreciate your kind words, support and honesty.

Will try to include everyone in this reply but please forgive me if I miss somebody/something out!

Kazzafunk - I'm sorry your health is not great at the moment, sending you healing thoughts. I hope there maybe something that you can find to help with the pain or give you some respite.

KayKay - Thanks for sharing your experience, will be thinking of you next Tuesday.. fantastic news!

Foggy - Thanks for your warm welcome and invitation to ask as many questions as needed! I'll try not to impose too much!

Melanie - You're right, we do need to consider all the possible options. My head is spinning at the moment not really knowing what to do for the best.

Finally, our sincere thanks once again to everyone for your support. We're in such a dark place at the moment and it has helped us knowing you guys are there and understand.

[kallis3]

We're all here for you goingunder.