After a lot of reading on this forum and looking at our dire financial situation I am waiting for a call back from Melanie Giles team to discuss an IVA for me and my husband. We have approx £56k unsecured debt and I'm just wondering what happens next? I'm actually very nervous about speaking to a compete stranger on the phone regarding our finances.
We have no real excuse for the debt we have run up, i guess just overspending over the last 15 years we have been together, we have 2 children, have both always worked but I recently had to give up a very well paid job for my sanity and am now earning 1/4 of what I was which is why we are at this point.
We have so far managed to meet our committments each month, although this last month a couple of payments have been late (due to HSBC wanting visa payments twice in one month) and I am worried that by proposing an IVA, our creditors will just laugh at us as they will wonder how we can go from meeting our committments one month to suggesting an IVA the following month and refuse it? they don't see that we are sitting at home freezing in this weather because I can't afford to buy oil to heat our house so we meet our debt payments and we have £80 for food for the month for the 4 of us.
The interest we are being charged on our debt is all around 20% (MBNA 35%) and this means that we just aren't making a dent in any of it and I can't see how we are ever going to be free of it if we don't do something.
I left the NHS 5 years ago (I was a nurse) but am currently doing a return to practice course at university to allow me to practice as a nurse again, this is due to finish next week but I don't get my results until Feb. I have a job currently but it is only part time and low paid. I have a job waiting for me for when I successfully pass this course but I can't start it until I am registered as a nurse again which will be mid to end Feb, if I fail, then I will have to remain in this low paid job, I can't bear the thought I may fail.
Because I work unsocial hrs I get enhanced payments in my salary, this changes month to month depending on what unsocial hrs I work, so as you can see my net salary will be different every month, how would an IVA payment be worked out on this?
We currently spend over £300 a month on diesel/petrol to get to work, this is because we live in a rural location and each work 30 miles away from where we live (in opposite directions), in fact my fuel costs are almost half my salary at the moment, would this be allowed in the IVA?
I understand an IVA takes a couple of months to set up, what do you do in the meantime regarding paying debts? do you still keep making the payments?
You have picked an excellent team to contact, and don't worry, they are nice people to speak to and totally non judgemental.
As regards payments to your creditors, it is totally up to you what you do. You will receive phone calls and letters though and the phone calls are not usually pleasant. It makes no difference to your application though.
You can save these payments up as a continency fund and also towards your first payment.
My debts were run up by reckless spending as well and your creditors will not mind that you suddenly go from making repayments to making none.
Speak to Mel's team and they will put your mind at rest.
Hope you get good news over the requalification - I'm sure you will.
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 Lem
Well done on taking that first step. You may already have spoken to someone on Mels Team and will speak to Mel fairly soon. They will explain all your options and then the choice as to how you proceed will be yours. You will be sent a list of documents that they need and then you sit back and let them take the strain. At all times you will have direct tel no's for help needed. I was like you and up to date with all my payments however then stopped and built up a contingency, had the car serviced and repairs done at home.Do keep posting and let us know if we can help
Hi there we was the same kept paying all payments mbna was 29.9 apr on 8,300 card interest alone was almost 200 pm that was just one creditior, we was worried that has we had kept up payments they wouldnt accept. I rang all creditiors and explained family of 4 trying to live of 40-50 a week inc school dinners and work was very difficult, all creditiors mainly mbna was very helpful some told us to contact payplan which we had already done! 2 months in iva accepted on our 2nd payment now it feel amazing!! Dont be afraid x
What is important to remember is that even though that 1st step is the scariest, hardest one to take, it's the one lots of us are VERY glad we made.
With Mel and her team you are in very safe hands, and they will support you and help you come to a good conclusion.
My outgoings at their worst were about £1400 to creditors each month.....not great when you only take home £1800 as a couple! £355 a month for 5 years was the biggest relief ever when the 1st payment went out. And have a quid left at the month was a great feeling, not having to spend on cards and go further overdrawn.
Good luck to you, and please keep us updated on your progress
Hi Lem, welcome to the forum - it has been a real lifeline for me! We have just had our IVA approved a few weeks ago. We are with Melanies team and you will be in excellent hands. Don't worry about the fact that you have managed to maintain your payments and that it won't look favourably on you, we had never missed a payment or been late with a payment when we got in touch with the team. Once we had established that this was the way forward for us we wrote to all our creditors and advised them of our intention to enter an IVA and that we would make token payments. The letter explained that we had been making the minimum payments by living on credit for food, essentials such as petrol to get to work and to pay the credit we owed and that we couldn't manage it anymore. It got to the stage where we only had between £50 and £80 a month for food (which we had to buy on cards). Now we have a food allowance which is more than that and we can afford to feed ourselves and our son properly. It feels such a relief.
And don't worry about talking about your finances to a stranger. The first person at Melanies office we spoke to was Tina, and she was lovely, helpful and non judgemental. It will be the best thing you ever do. There is a way out of the dark hole. Good luck xx
P.S - It only took 8 weeks and 1 day from the date of the first call to Tina to having our IVA accepted.
thank you everyone for your kind replies, I have spoken to Tina and she was fantastic, made me feel very much at ease, there was no pressure and was very professional and kind even though I did get a bit emotional!
I have talked things through with my hubby and he is going to speak to tina tomorrow as we still have a few more questions. Ideally I would prefer to wait until after xmas to start the ball rolling although Tina has said we should start now if we want to go ahead, I just want to get xmas out of the way, set up a new bank account etc and not have creditors calling us with all the added stress over xmas. We are already into our overdraft and will have to continue using this for the rest of the month now anyway, but I want to take this time to sort out a new account (have applied for the halifax easycash online) so that when we next get paid all our money will go into the new account and we can suspend payments to the creditors for January, does this sound reasonable?
Having looked at the budget we would be set though, I am very concerned this is far too lenient as we have been living on a lot less for so long in order to meet our committments, although I am sure Tina knows what she is doing!, I guess I am worried though that we will stop payments, the proposal will be rejected and we will be expected to pay so much more into the IVA pot and things will be so tight for the next few years, although I realise we are fast running out of options.
This is such a scary thought of what we are possibly going to undertake, hubby is more concerned with the effect it will have on our kids who are 7 and 11 at the moment and how the lack of money will impact on them for the next few years.
If it feels better to wait until after Xmas then do that, but try and make sure that you are not running up more debt in the meantime. I will happily contact your creditors for you in the meantime and ask them to halt any collection action in the meantime.
And don't worry - I will not let you go into an IVA that you cannot afford.
Thank you Melanie, we won't be using credit cards anymore, I have made all our credit repayments this month now so we are completely up to date with all our committments but this has put us back in our overdraft (agreed overdraft though) however, as we are in our overdraft we will have to continue to use this for normal living expenses for the rest of this month until our new account with halifax is set up and we can have our salaries paid into this at the end of december, if we went ahead with starting the IVA process now, the HSBC I am sure would freeze our overdraft and we would have no money to live on for the rest of the month (plus still bills to be paid like mortgage, insurances, council tax etc, food and petrol,) this is all budgeted for within our agreed overdraft but we can't afford to have this stopped until we next get paid, will this cause any problems?
One other question, our mortgage is due to come off the 3 year tracker we have in March and will go on the SVR unless we change, this will mean an increase of around £150 a month from what we are currently paying, we need to sort this now before we start an IVA I guess?, I know we won't be able to change lenders as we have too high debt at the moment, but if we go with another product with the same lender, will they do another credit check?
Change your bank account and get your salary paid across to it asap. I was with HSBC and they continued to take out loan payments even when the money wasn't there.
Once your new account sorted, then you need to cancel all your DDs at HSBC.
As to the mortgage, will you be able to fix your mortgage at all? You may be able to do so.
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
we have opened an account with coop, documents will be with us in a few days, although they did tell us that when the IVA starts the account will probably be frozen for a couple of weeks, we will have to deal with that as and when.
mortgage company can offer us a 5 year fix but this will increase our payments by £300 a month, Tina is currently looking at this to work the numbers out and get back to us, the other option is to remain on the SVR come March when the payments will go up by £150 instead, don't know what to do really.
You have taken the hardest step, as other have said. You should have a better Christmas in the knowledge that your debts will be sorted out in the New Year.
You are with the best team in the business. Our IVA was approved in August, with Melanie's team doing a fantastic job.
regards
st75
Started lump sum IVA in Aug 2010 - received certificate of completion April 2011, thanks to Melanie & team
I can personally recommened Melanie as she help me start my IVA a few years back. Don't worry about speaking about your financial situation, it is a big relief to get things off your chester and nobody judges you at all.
It's best to be as honest as possible and get it all out in the open in my opinion.
Good luck.
