www.iva.co.uk

Hi, this is where i am at at the moment. I will spill all the beans but i would be very interested in any ideas or advice that anyone on here may have.
I currently have debts in excess of £21,200 not including any interest that will or will not accrue.This is divided up by 13 creditors. Things up till now have been just about manageable but recently i have seen a big decline in my income as i work in sales in the construction sector and the current slowdown has seen any bonuses that i would normally get diminish harshly. I have spoken to National Debtline who have given me some preliminary advice, basically to open a new Bank Account away from any of my creditors which i have done as well as draw up a personal budget sheet so as to work out what i can actually afford to pay back. They have also advised me to write letters to all my creditors detailing our position whilst at the same time offering to pay a small token payment while my wife and i work out exactly what we can afford to pay. This is supposed to buy us some time whilst we do that. I am worried that obviously the creditors will not be at all happy with some token payment that doesn't even ammount to 1% of some of my debts and feel more urgency is required in order to get something more long term sorted so i won't get any more charges. Tonight i rang Payplan to see what their stance on it was and they seem to think that they would act a little quicker also. I understand that national debtline are doing things the right way and am not talking them down, i just feel that i need to act quicker to come to a solution. We have not yet decide on DMP or IVA, but i do want this all to go away as quick as possible and was told that it could take 17 years to pay off DMP and am worried that this will not be accepted and could be made bankrupt which i do not want to happen!!! I am working on my budget sheet in order to maximise the amount of money available to creditors, currently i am at £200 pm but am trying to get that up. In a way i do feel that an IVA would be best as it would stop all the calls and letters, however if a DMP could be payed of in a similar amount of time then i would't have a problem with that route.
Unfortunately, there is another issue which worries me. I also have another loan, with my employer which is at around £30,000 at present. This is taken at an agreed % of my monthly income and is taken at source, meaning straight from my wages. Would this need to be declared and included in any arrangement i make with my creditors? If so i will have a problem!

Any insights or tips would be much appreciated, many thanks in advance.

With £200 per month to spare - an IVA will take five years to repay, whilst a DMP will take over eight years assuming that your creditors agree to not charge any ongoing interest or charges, and the DMP company you choose to represent you make no charges. These assumptions do exclude your employer's loan.

That is a large sum of money to owe your employer - may I ask what this was taken out for? Assuming the loan is unsecured, it is of material value and would need to be disclosed in your IVA and also included. I have, in the past, excluded modest staff loans on the basis that this might affect my client's employment - of course with the full disclosure of this to the other creditors - but I feel that this loan is too large to leave out.

In which case I would favour the DMP over an IVA, but other experts might have differing views. What do Payplan say about this as a matter of interest?

The loan was given to me a year or so ago as i had a large second mortgage on my old property which needed to be cleared before i could move to a new house. At the time i asked my employer for advice rather that anything else and was offered the loan, it seemed like a perfect solution at the time. The payments into that loan have 5 years left to go. Payplan are not aware of this at present as they are ringing me tomorrow evening to go through my case in more detail, i will let you know what they say. Would it purely be down to the IP to decide whether this loan is included or would they be legally obliged? I have a contract with the loan and in that there is mention of a charge being put to my property for it but this has never been carried out. I just feel that it would put me in a very difficult position, if not unemployment, should i end up shortfalling my employer on the loan .

Not a good situation to be in and the loan from your employers may make an IVA difficult,given that they wouldnt necessarily get all their money back(the loan would have to be included in any iva). Talking to an IP will defo be the right move,and perhaps a debt management plan may work better.

You're right it's not a good situation to be in. I sometimes wonder how we got here, it's not like we have alot of material things to show for it. The thing is i suppose as the previous loan was secured bankruptcy would have been the only option but to be honest it wasn't something we even looked at let alon considered. We started a family and when we lost a wage it just hit us much harder than we ever imagined, the thing is hopefully once the DMP or IVA and the employer loan is finished then my wife will be in a position to do more hours and increase our income, the only problem is that NOW we cannot afford to pay for our mistakes!

Your IP is professionally obliged to disclose the presence of the loan - it should be included for a pari passu distribution to creditors, but it might be possible to get an IVA accepted with this being excluded but only with the full agreement of all other creditors. In my professional opinion, I feel that a DMP would be a better option for you.

Ok thanks for all your help. I will see how it goes and let you know what payplan have to say. Thanks again.

Hi again, have spoken to Payplan tonight as planned and we are going down the DMP route as you thought would be best. As for the 'Work Loan' they think that no-one needs to know in particular with a DMP, and would've looked into doing an IVA with that stance had my debt not been so large and my CURRENT surplus being so low. One thing shocked me tho, that one of my creditors in particular would probably want to put a charge on my property and could even force me to sell, that creditor being HSBC. Is this common? and how easy is it to stop the forced sale coming in to action?

It is becoming inreasingly common for creditors to seek charging orders, but I rarely see them applied for by HSBC. Under the current code of practice which is used in the debt management industry, banks are not supposed to pursue you legally so long as you are making a realistic rather than an token effort of repayment. I am sure that Payplan will be able to guide you better on this point, given that they are entirely funded by the people you owe money to.

Is it a good thing that they are funded this way or are they just fighting the creditors side all the time? After speaking with National Debtline and generally having a good look around, Payplan seemed like agood alternative to ND, are they good at what they do, on a debtors side?

I could not really comment on that point - if you are happy with the service stick with it, but it might be worth getting another opinion from a fee paying company to assess which one you feel is going to look after your interests better.

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It is becoming inreasingly common for creditors to seek charging orders, but I rarely see them applied for by HSBC. Under the current code of practice which is used in the debt management industry, banks are not supposed to pursue you legally so long as you are making a realistic rather than an token effort of repayment. I am sure that Payplan will be able to guide you better on this point, given that they are entirely funded by the people you owe money to.

Hi Melanie

Does this mean that debt management plans are now becoming more regulated and creditors are having to be more fair and less aggressive.

Many thanks
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I think it is fair to say that the debt management industry is becoming more regulated, and that creditors are becoming more amenable to that method of repayment.

The problem with all this is that one says Payplan and other similar organisations are the best way to turn others say a private company would be better. I think i will stay with payplan at the moment and see where it takes me, all i'm saying is that this is all so confusing and sometimes you don't know what to do for the best. By the way, am i even on the right forum? Is this only for IVAers? is there a limked DMPer forum? Thanks for everything so far tho.[:)]