www.iva.co.uk

Would people agree that if you are able to make your monthly repayments and be debt free within 5 years then wiser not to enter into a IVA. Particularly if during that period you know your salary will increase plus bonuses and a reduction in company car tax. My problem is by doing this I only have about £30 a month at the mo to live on, but would an IVA leave me much more...

Ive just had an IVA agreed, we could just about afford our monthly debts, but this only left us a small amount of money to live on. As a result we got into more debt by buying essential items such as food on the credit cards, consquently getting into more debt. we thought long and hard about applying for an IVA after looking at our incomings and outgoings. I was in the same position as you as in 6 to 12 months time I am due to get a pay rice which would have helped with purchasing the essentials.However from now to that time we would have accrued more debt. It may be best if you speak to an insolvency practionier who will be better to advise you on your own circumstances. I did this and to be honest I was dreading it as I was quite embarrassed by the amount of debt we owed, but I can reassure you they were empathatic and very respectful to our circumstances and were very non judgemental.Good luck and if I could suggest using this forum for asking any questions, everyone is so helpful, supportive and understanding. Good luck

Thanks, I've never missed a payment in my life and like you am embarrassed by the mess I'm in. Basically I was made redundant and move to another job where I had a particularly expensive company car forced upon me, so from living comfortably and gradually reducing my debts I now find myself in this situation.

The only other alterative I see is to write to my creditors asking if they would agree to freeze the interest on my accounts for 9 months until my financial situation improves (my company car is up for renewal at the end of June and I've worked out I can save at least £150 a month and at most £290 a month by changing it) but my impression is that if you have always managed to made monthly payments before such companies are not particularly sympathetic.

Can you explore a debt management plan, we did this b4 looking into an IVA but it meant paying over £700 a month over 7 years, which at this moment in time was totally unrealistic. We did not go into an IVA lightly but for us it was the only thing to do, our first payment goes out in early October. If things work out I am hoping to be debt free in 4 years. It will be beneficial not being reliant on credit cards, it was such a relief when our IVA was agreed and then we cut up all our credit cards. We have only disclosed to two close friends and no family memebers that we have an IVA as I still feel quite embarrased about this. Good luck in whatever you decide, but seek professional help, this costa nothing and could be of great benefit to you.

Hi pavel - I would explore all the options with an expert. When you say you would have £30 a month to live on, is this after, food, clothing etc? You need to make sure you've covered all your expenses before agreeing to anything. Whatever route you take, you need to make sure you can live with it. The last thing you want to do is enter any plan that will add more stress.

I think the majority of people who have entered IVA's never missed payments, but it was the robbing Peter to pay Paul, that enabled payments to be made. Please don't be embarrassed to discuss with the experts as they are there to help.You'll feel better when you know which route to take.

Good luck x

Your query is academic, as an IVA will not be accepted by creditors if they can see that you could pay off your debts within five years. It sounds like you have a debt management problem rather than a debt problem, so with some careful budgeting and some co-operation from your creditors, you ought to be able to pull through this without a formal insolvency on your record.

If everything remained constant I calculate I'd end up owing about £8000 after 5 years, but as I say I know that (touch wood !) I will get an increase in salary and annual bonus plus my company car tax reduction will allow me to pay that extra £8000 over the five year period.

As things stands today I am left with £30 a month after paying all creditors and bills, so that's £30 for food, clothing, dental care, entertainment etc. One of the creditors is my parents to whom I pay £220 a month and although they have indicated they could get by without that money for a short period I really would prefer to sustain those payments as it isn't fair that my parents (who should both be retired and enjoying life) bail me out.

Melanie, do you think my creditors might agree to freeze the interest if I continue to make my normal monthly payments until next July when my financial situation is likely to improve ?. Maybe a debt management plan would be a suitable alternative...I've even considered part-time work in addition to my full-time job but tax wise I already pay 40% so would basically have to do almost double hours, and my day job is demanding enough

I think a debt management plan is an excellent idea in the meantime, and you may well be able to get the creditors to freeze interest and it is definately worth a try.