www.iva.co.uk

hello
just wondering if someone can help?
We currently have debts of around £50k (mainly from being students and a house we had to sell to move for my husbands job - lost a lot of money), we have income of around £3,800 a month, we dont have any assests, not a home owner, we have 2 cars but they are old bangers with a combined value of around £1500 and are needed as we live in the country and need to travel for work. We have a son who is 22 months and in childcare and another one the way, due end of April 2013.
We can currently pay the debts, just though as its very difficult, and think once the baby comes we will not be able to keep up with everything as i will be on maternity leave and then will have to pay double the childcare costs, which will rise to £11k a year! (and this is the cheapest childmonder i could find).
My questions are:
Would an IVA be better for us than a Debt Management Plan?
Should we take it out now? As out circumstances will change significantly in April? If we took it out now can it be changed with ease to take into account an extra mouth to feed and childcare costs?
At what point down the DBP or IVA route can we pull out with no penalties? i.e. after budgets have been written before agreements with lenders or before?
Many thanks

Hi Kirsty and welcome to the forum

No-one can really tell you whether an IVA, a DMP or even bankruptcy proceedings would be better options for you - this is really a matter of personal circumstances and choice. If you want the security of a payment plan that involves creditors formally discontinuing from charging interest and charges, and with a finite end point, an IVA may be more favourable for you - alternatively if you want a little more flexibility and to repay your debts in full, then a DMP might be better.

I guess it really boils down to affordability - and I do symapthise with those childcare costs - one of my friends pays nursery fees of £1,700 per month for two children!

I would be thinking about getting the right solution in place when you need to - so if you can manage the repayments until April carry on doing so. Neither an IVA nor a DMP ought to be entered into without good reason, and most providers would like you to be committed from the outset, rather than thinking of pulling out - although you can do so at any time during a DMP or an IVA, if you cause the arrangements to fail or decide to change your minds.

It might be a good idea to take early advice, if you have a good idea what those childcare and other costs are likely to be - so that you have some things to mull over together and importantly take the time to make the right decision. An insolvency practitioner can assist with this process, and will not charge you anything for completing an initial review of your current and future circumstances.

hi and welcome, great expert advice above. What I would add is why not talk directly with 2 or 3 professionals. You can discuss all debt solutions and they will be case specific to you.

www.iva.com is a starting place if you don't know who to call and it's always best to get the advice of 2 or 3 companies before making a decision. x

Hi Kirsty. Excellent advice from Melanie. On the changing circumstances front, you need an IP who is sympathetic to these things ( some aren't, I am afraid), gives down to earth, honest advice and is easy to work with.

You have a little time to do some research. Pop over to www.iva.com where you will find listings of reputable firms, with reviews. You really need to speak to a few, to see who you gel with and compare advice.

Personally, I would definitely chat to a few of the smaller firms, who treat you as a person, rather than a number. Melanie, who posted above isn't allowed to blow her own trumpet -- so I will do it for her. Melanie's firm is a definite "speak to". McCambridge Duffy I would also add to the list. If you have a look around this forum, you can also get a feel for how the different companies operate.

Hi Kirsty, as advised above it is worth speaking to an IP as soon as possible.

I had my daughter at 23 and my nursery costs were higher per month than my mortgage so I completely understand how you feel. My daughter went into nursery at 4 months old and I went back to university and paid my childcare costs with student loans, which I've only just finished paying as my then husband left me and I ended up a single mum, paying rent, running a Clio and trying to work and look after my beautiful daugher.

Like you I live in the country and nursery costs are very high, due to lack of competition so I recently engaged a live in au pair, she is Spanish and I pay her £60 per week to assist me with my children. If you have the room this may be a solution for you but I appreciate this may not be convenient in some circumstances. I found mine on gumtree.

You are absolutely right to ask about whether your circumstances will change and how this will impact upon an IVA when your new baby is born and this needs to be carefully considered and managed.

An IVA is a serious commitment and I would suggest contacting an IP who is prepared to meet with you and understand your personal circumstances. It is all about empathy and chemistry as an IVA really is a big commitment. You need to deal with someone who can empathise with what you are going through.

Phone around, see if the IP will come to your home to sit down with you if you wish, and really understand your personal circumstances. I hope this helps. Sam

Thank you for those kind words Foggy - much appreciated.

My two youngest are 13 and 11, so full-time childcare stopped 7 years ago. It was nearly £600 per month then, so goodness only knows what it can cost these days.

I wouldn't mind too much if it stopped there, but there are of course 13 weeks school holidays a year, and though mum and dad can maybe juggle a litle with their own holiday entitlement from work, there will be inevitably be times where kids clubs/childminders are still required on an ongoing ad hoc basis.

Regards.