I have taken a recent and sharp pay-cut (with little chance of short-term recovery) and am now living beyond my means with seemingly all of my income used to pay back debts, direct debits failing regularly and inevitable penile bank charges.
I have debts of £8k unpaid to a bank (10k borrowed), £1.5k on a credit card, £2k as an unauthorised overdraft to a bank and a current account seemingly maxed at £1K overdrawn. I also have a student loan of £12.5k
This totals roughly £25k, however it slips to £12.5k not including the student loan.
I am wishing to stop the rot of debt, write off what I can’t pay and freeze interest so I can get out of the rut I’m in and make a fresh start. I’m currently making no headway in clearing anything and the interest/charges are crippling me. Reading around the subject an IVA seems a very attractive option if I were to qualify.
There seems a bit of a grey area though regarding student loans. I’ve read conflicting points on this site and still don’t know where they stand. Can anyone categorically state whether they qualify to be included within an IVA?
Lastly would anyone having taken an IVA recommend this avenue for someone in my situation?
I'm not too sure about the position with student loans at the moment, but I recommend that you speak to an Insolvency Practitioner as soon as possible. They will be able to help you.
Visit www.iva.com for a list of companies you can use, or check out some of the experts who post on here. Melanie Giles, Size5, Michael Peoples all come highly recommended, plus debt advisors Andy Davie and VikiW. You can find their contact details under the expert link at the left hand side of the page. They will advise you of all the options open to you and advise as to the best way forward for you.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi
The student loan company will almost certainly reject an IVA,as they have a controlling vote.
Your options are limited to bankruptcy or a debt management plan.
Have a chat with several companies and see what they advise
Regards
Student Loans would probably accept a return in an IVA of 80p in the pound or more, however it you are offering such a high return it is questionable whether an IVA would be the right solution in the first place.
Are you currently repaying the student loan via your salary?
The student loan isn’t being debited from my salary as I’m currently earning an insufficient amount. The only reason I enquired about adding it to an IVA is because without it my debts only total £12.5k, which deems me ineligible.
Reading around the topic my best bet seems to be a chat with an independent financial advisor/insolvency practitioner to determine my best root.
Yes - it might be useful to have a chat with an experienced IP. You could possibly do an IVA which indicates that the Student Loan Debt be excluded from the IVA as (a) your income is such that it does not become repayable yet and (b) if you went bankrupt you would still owe it. This would give you a breathing space to get yourself a new start. Not saying that creditors will go for it (we have had a few that have)and see how it goes. Speak to an IP for free appropriate advice asap. Good luck.
Last edited by David Mond on Tue Jan 06, 2009 10:28 pm, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
