I have been advised by Stepchange that an IVA is my best course of action to deal with my now spiralling debts. In the past 2 years I have lost my business, my marriage has ended and my physical and mental health are both poor. I have been declared unfit for work by the DWP and living off Universal Credit and PIP totalling £1500 a month. My debts now total nearly £50000 and having used all my savings and sold many things to try and keep on top of payments I can no longer do it. Having completed a budget with Stepchange my expenses each month are £1300, leaving £200 disposable income. I have no real possessions of value other than a car which I bought in 2018, it is currently valued at around £11000. Would I be made to sell the car and get a cheaper one offsetting the difference against my debts? I am dependent on having a reliable car to get to my medical appointments, go shopping and generally getting around as I have walking difficulties. So any replacement would have to be 100% reliable.
Also I currently pay £30 a week for a cleaner and things like changing my bed which I cant do anymore. She is a friend of the family and as such I just pay her in cash every week and have no receipts or anything, so would this be excluded from my expenses without having receipts for it?
You say that Stepchange have done a budget for you -- presumably they have included the £30 for the cleaner, so should be happy with that (or have you, at this stage, merely completed a check sheet yourself, maybe online?). If they have advised you that an IVA is the way forward, I would hope that they have actually done a full fact find.
The car, I would think is probably safe in the circumstances and, hopefully, Stepchange would exclude it in the proposal. Your PIP income is intended to cover things that you NEED to cope with your disability and, so should cover these things.
Have a chat with them and straighten out any doubts before proceeding.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
You may want to look into seeing if you can get a Personal Health Budget, but you need to be careful on the cleaner aspect - technically they are your employee and you may be liable for tax and NI for them.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
Thu Jul 15, 2021 4:34 pmsimon947 wrote:
I have been advised by Stepchange that an IVA is my best course of action to deal with my now spiralling debts. In the past 2 years I have lost my business, my marriage has ended and my physical and mental health are both poor. I have been declared unfit for work by the DWP and living off Universal Credit and PIP totalling £1500 a month. My debts now total nearly £50000 and having used all my savings and sold many things to try and keep on top of payments I can no longer do it. Having completed a budget with Stepchange my expenses each month are £1300, leaving £200 disposable income. I have no real possessions of value other than a car which I bought in 2018, it is currently valued at around £11000. Would I be made to sell the car and get a cheaper one offsetting the difference against my debts? I am dependent on having a reliable car to get to my medical appointments, go shopping and generally getting around as I have walking difficulties. So any replacement would have to be 100% reliable.
Also I currently pay £30 a week for a cleaner and things like changing my bed which I cant do anymore. She is a friend of the family and as such I just pay her in cash every week and have no receipts or anything, so would this be excluded from my expenses without having receipts for it?
Any reason bankruptcy isnt an option?
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
He might be made to sell the car in BR and get a cheaper one.
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
That is a possibility and worth pursuing. We have one and they are worth their weight in gold. You can apply online (at least you could when we did one)
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
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I would rather not go down the bankruptcy route, they would still take the car and while I dont have much in the flat, I would rather it wasnt put at risk of the receiver deciding it could be sold.
A mobility vehicle isnt an option Im afraid, when I was on DLA I had high rate mobility and medium care which was fine. However on moving over to PIP I was awarded standard daily rate and low rate mobility but the award was made for 10 years, which is a long time for a PIP award. Although my situation is worse now and on paper it should qualify for higher rate of mobility, in reality it is a big gamble to to go for a reassessment as I could possibly end up with less than I currently get and maybe for a shorter period. I cant afford to take the risk on that. I have previously had to go to tribunal stage twice with DLA and although I won both, it is not a good experience and I couldnt face having to go through that now.
If you go bankrupt, you would not have to make ANY monthly payments in bankruptcy.
Stepchange has worked out the £200 a month assuming your disability benefits is just income. They have not allowed for the expenses of your disability which in bankruptcy would be allowed. No one with only benefits as income, however large, is asked to make any monthly payments in bankruptcy.
Only the car is at risk. People do not have normal household possession taken in bankruptcy, that's a myth.
If you feel your benefits may be reduced, then you will not be able to afford the IVA repayments and the IVA will fail. Bankruptcy never fails.
Is there another way around the car problem. Is there anyone in your family that would let you drive a car they bought? - they can remain the legal owner.
Or sell and buy a cheap one, less than about £1500. You have £200 you can spend on car repairs, or indeed taxis.
When you sell the car, you will also be able to spend some money on buying any essential things for your flat and be able to pay the bankruptcy fees.
Or don't go bankrupt. Offer all your creditors £5 a month and explain you are on UC and disability benefits. But committing to spend £200 a month for 5 years on an IVA which may fail is not a good plan. Shame on Stepchange for suggesting it.
Thanks very much for your reply and the information I appreciate it.
As I understood it (correct me if I am wrong) if you went bankrupt the official receiver came to your property and looked at what you own that could be sold to repay debts?? So for example I have a large TV in the front room and a smaller one in the bedroom, would that not be classed as a luxury? Also I have an Xbox one that my daughter uses surely they would take things like that?? I did think about selling my car but the problem I have with that is unless I could get hard cash then it would go into my bank account, which would then be picked up on by the DWP as having over 6k and my benefits would be affected.
To be 100% honest I just do not know what to do for the best, I just need a fresh start one way or another. I am around 2 weeks away from defaulting on a number of my credit cards and have no money left in the bank until I get paid on 14 August because I used what I got last week to service my loans and some other cards that needed paying. I am at my wits end now,
The Official Receiver will not visit your house and your TV's and XBox would not be worth bothering about. It's only if you have a Picasso or expensive watches and jewellery. The other things would not make any money anyway. Keep your car until such time as the OR says you have to sell it and get a cheaper one with some of the proceeds.
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
Thu Jul 22, 2021 11:49 amsimon947 wrote:
As I understood it (correct me if I am wrong) if you went bankrupt the official receiver came to your property and looked at what you own that could be sold to repay debts??
As Kallis says, no-one will visit your house.
If you look at a bankruptcy application, you will see that you are only asked to list assets which have a secondhand value of over £500. So that large TV is only worth what you could sell it for on eBay. probably less than a couple of hundred. It's not at risk.
If you can stomach losing the car, then BR is the quickest, cheapest and easiest way of doing it. If not, then an IVA is a good alternative.
One point of caution though, I really do fail to see how someone on UC and PIP could possibly afford £200. £100, or less, may be nearer the mark affordability wise, notwithstanding that you may have some creditors who insist on a minimum return.
Kindest regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
Thanks for the advice and clarification on the BR option. I just do not know what to do for the best. The worry with the IVA would be that my benefits changed. My PIP is on an award until 2026. Due to my ongoing health issues I have been declared unfit for work but I dont know what the date is for the review of that is. I was awarded it in March this year, backdated 12 months. I received £3k in back money which I used to pay some debt off. That aspect of my benefits is worth £341 a month, if I lost that I would not be able to afford the £200 a month on the IVA. I have managed to scrape together enough to stop me defaulting on anything this month at least, so that gives me a bit more time to decide.
