We Need Help Urgently

[Tifosi1]

Hello - i am in serious trouble with money and dont know which way to turn. Am new to the forum but read quite a few posts and this encouraged me to join up and ask for some advice.

To cut a very long story short, i have unsecured debt of around £34,000, accumulated through being young and stupid in a time of easy credit over the past 4 years,(i am now 25 and my fiance is 23) and topped off by a very complicated family situation which cost us thousands and leaves us with much higher monthly bills and no way of paying everything on our combined wages.

I am worried that my only options are an IVA or bankruptcy, but want to avoid bankruptcy at all costs as i work as a management accountant (unqualified as yet) and worry that this would mean i lose my job. At the same time, i worry about how restrictive an IVA would be and how difficult it would be to live during the course of the IVA.

Can anyone here who is in an IVA help explain what it is like living with one? Is it like big brother watching and controlling everything? I have heard stories that you dont have any control of your money and that you cant do anything - we have had an extremely tough time over the past few years with family trouble and while i am a proud person and want to pay everything i owe (i am ashamed to even think of IVA or bankruptcy) we are both at the point where we want some closure, a chance to start again and plan our future like our wedding and starting a family - plus maybe going out a drive without worrying about fuel, going for day trips or visiting town and being able to buy a drink or snack without feeling guilty or even being able to treat ourselves to some new clothes now and then

Things are getting tougher and i dont know where to turn, please help us

[jasperyogi]

Hi there and a big welocme to the forum. Your in the right place for great advice and you've made the hardest step already...asking for help. Most of us have been where you are right now and found the right answer for us as I'm sure you will too.
As for living in an IVA we have been in one now for a year and I'd recommend it to anyone who has debt, which, for whatever reason, has become un-manageable. We have 2 children and neither of them have noticed we even have money probs. Life is on a budget but we can buy clothes etc when needed, and have trips out etc. Life for us is better since the IVA because we spend our money now (something we hadn't done for years). Dont get me wrong its not one big party, but its living. One of the experts will be along shortly to advice you further[:)]

[kallis3]

Hi Tifosi1 and welcome to the forum.

You are among friends here as we have all been where you are, not knowing which way to turn.

I am almost 4 months into an IVA, and whilst you do not have a lot of money left to play with, you have ample to be able to live. I am finding it much easier to budget now that I no longer have credit cards to fall back on.

You have to make some economies, a flash car and expensive holidays abroad are out of the window, but you can usually save a little money for treats here and there. We just economise on the food we buy - no more throwing everything in the trolley. We make a list and stick to it. Your social life will be restricted somewhat, but you can go out.

An IVA is a way of getting you back on track with your spending and in 5 years time you will debt free and free to live life to the full!

[pbeck]

Iam not in an IVA but instead I set up an run IVAs.

AN IVA is not a big brother experience. Although you will have to produce an initial budget this will be used to set your initial level of contributions, which should remain fixed for a year. Once per year your income and maybe your level of domextic expenditure will be reviewed and if you are able to afford more e.g. if your pay has increased by more than any increase in your bills, then your contributions may have to go up.

You will be allowed to live a normal, if frugal lifestyle. Creditors don't expect people to be living on bread and water and wearing 3 jumpers throughout the winter in a freezing house. On the other hand, life's little luxuries will be a bit curtailed. Certainly the creditors wouldn't expect you to be spending money on foreign holidays, flash cars, new gadgets or designer items, but on the other hand if you receive bonuses above your normal rate of pay, it is normal for you to be allowed to keep half the net therefrom so that you get at least some benefit from them.

You would also be allowed to set aside a budget for clothes and also for your normal domestic travel expenditure.

As to starting a family, in view of the increase in personal expenditure that would result at that time, then the IVA Supervisor could call a meeting of creditors to approve a reduction in IVA payments once the little one comes along, but you would be expected to offset any such reduction by claiming child benefit and amy tax credits to which you would be entitled.

Don't forget, the creditors want your IVA to succeed just as much as you do, they know that people will only stick with it if it is manageable and people can see light at the end of the tunnel.

[LoneRanger]

Hi Tifosi1

I am currently in the process of setting up an IVA, Although your problems are probably alot deeper than mine with regards to your family situation, i too took credit when it was so easy to get. Im in trouble now and have treid a DMP which for me has not worked. The interest just keeps getting added and will take 20 years to pay off. To me, although my own fault would be 20 years of hell.

There is nothing to be ashamed of with an IVA-its taking responsibilty for your actions , you will be debt free in 5 years, it will be clear of your credit file in 6 years, which by then you will be only 31 and your OH 29, so you will be free to start again. If you just ignore it the creditors will not go away. You have 3 options really- DMP-IVA-or Bankrutcy.

You might want to provide more information about how many creditors what assets you may have etc for an export to advise what would be the best way out of debt for you.

Good luck

[Tifosi1]

Wow - so many responses so quickly! Thankyou

I have 6 creditors, and two assets - my car, and my house. The problem is that with the mortgage and the secured loan, there is no equity in the house.

We bought the car for £10,500 March 07 with a loan through the dealerships financial division for £8,500. I doubt the car is worth that though these days.

We realy need to keep the car as we live in the sticks and use it everyday for work. I had started thinking about giving the car back to the finance company and seeing if my fiance could buy a cheaper car with finance in her own name, but dont know if this would help in the long run.

Would an IVA take the car away from us?

I'm not sure how much detail i need or want to go into here, being a public forum, but i guess i need to outline what my situation is for the experts to be able to advise properly?

This is where the family situation makes things complicated. We dont actually live in our house, we rent from my mum - and had been letting our house to my fiances mum - whilst this sounds very silly and unorthodox it was necessary at the time due to the big troubles that were going on all round.

It was supposed to be short term and she was to cover our mortgage and bills for the house.

Problem being that she didnt contribute for 6 months which meant i had to draw on my credit cards to their limits to pay the mortgage etc. She then ran off leaving us with large phone, gas and elctric bills to find a way of payng, and also with my fiances little sister who now lives with us.

This means that on top of our rent and unsecured debt payments (which we were managing beforehand) i now need to find a way of covering the mortgage etc for the house while it sells, plus the credit card bills have gone up, and the added cost of feeding an extra mouth and all that goes with young teenagers!

Due to the economic climate at the moment the house isnt selling - not even 1 viewing in 4 months and 2 price reductions

Although an option is for us to move back into the house to save the rent we currently pay to my mum, we wouldnt feel comfortable living there after everything that has happened there - plus we would also leave my mum in trouble if we did move.

Is my situation too complicated for an IVA to be considered? do i have no option but to go bankrupt and lose everything on top of everything that has happened to us?

[tori]

hi tifosi 1 & welcome.i have put off trying to sort out my debts for the last few year's basically down to sheer fright and embarrasment.i have my creditor's meeting next week and if id have known that seeking professional help and applying for an iva would be such a straightforward process i could have been debt free by now.for me, the last 8 weeks (since i made that first phonecall) have been heaven compared to the last few years where iv worried about my debt every minute of every day.

[tori]

and like you i ran up the majority of my debts when i was very young due to havin no budgeting skills or knowledge of interest rates & apr's etc.you are at a good age to start dealin with your money problems.i wish i had sorted mine out when i was 25 ! i personally cant wait to have my iva accepted (keepin my fingers crossed ! ) then i can start from scratch & live to a budget,& within my mean's.my advice is get help asap you wont regret it.i haven't felt this stress free for a very long time.good luck.[:)]

[Tifosi1]

Sorry - i know i have already written tonnes but i am thinking of things all the time? Is there anyone out there who can help me with the following worries/questions that i have?

1) - Would i lose my car?
2) - Would an IVA affect travel plans with work - i.e visa applications?
3) - Would my fiances income be taken into account?
4) - How detailed is the IVA budget? What do you include or how do you know what to include?
5) - Are you allowed to have any disposable income at all?
6) - I sometimes get high street vouchers as a gift from my employer at christamas - but these are shown on my pay slip to be taxed - what happens if you get vouchers as a bonus?
7) - i saw somewhere that in year 4 you have to release equity from your house - what happens if there isnt any equity or you have sold it and dont own a home anymore?

I apologise for being so demanding - my head is in a spin and i need to get this down before i forget

Thanks for your time in reading and your help

[Abi]

Hi Tifosi,
Don't be sorry for asking advice, I'm pretty new to this, we are waiting for our proposal to come from Melanies office she is an IP who posts on here she will give great and impartial advice, with out this forum we wouldn't have know which way to turn. My husband at the moment is working abroad and having to use a company visa which is ok to do so. So travelling will not be a problem. We will have a clause in our proposal regarding the equity realease which is after 4 1/2 years whether by then there will be any by then who knows!!!!
Within hours of speaking to Melanies office we were sent everything through Email giving all the expenditure it seemed so quick so I think this would be your best option, all your questions will be answered.

Please give her a call it will help to take some of your stress away.

Love Maxie x

[pbeck]

Tifosi

I'd love to help further but I suspect answering your questions in writing will probably generate more questions. It's probably best now to discuss this on the phone with an Insolvency Practitioner as you'll be able to discuss it freely and put your mind at rest with all these matters.

Any Insolvency Practitioner would be able to answer all of these things for you.

[lighton]

Hi i have been in my iva for just over 3 years, best thng we have done.I can answer question about car , my partner had hp on a bike when we started .You do not have to give this up.The amount you pay each much will be included in your expenditure.If your hp payments finish before end of iva the money you were paying would be expected then to be contributed towards iva until iva ends.Although we are just finishing our hp but our circumstances have changed and so has our outgoings so am going to ask for a variation , to see if i can have this clause removed.As for equatity in your house if there isnt any and you arnt going to make any profit on a sale i wouldnt worry about that.Your partners income will be included to a certain extent.If may be a good idea to write down all expenditure you have from shopping ,maintanace payments , fuel etc, any clubs that you pay for thatyour partners sister may attend .Remember everything however small it may be, it will save on a variation later.You can allow for going out etc as long as you dont take the mickey. Any disposable income left over is what is set for your iva payments if excepted.Dont leave yourselve short remember not just fuel but ,insurance , tax car maintenance etc ,that includes your partner as well.

[Jan01]

Hi Tofosi

I can't answer all you questions but as Phil and others have said speak to professionals for more information to help you make the decision.
What i can answer is what it is like to have an IVA. I have been in an IVA for just over 3 years and at times it is tough and unexpected bills can make things difficult. But the relief of having all the bills paid money for the essentials and a little bit for the non essentials is fantastic after spending months worrying. It may mean that will have to plan a nice night out rather than going out every weekend (if you do ) For me it was the best thing I did my debts are being paid I have money to live and as many people on this site find the material things in life are not so important.

Welcome to the forum and what ever you decide to do I wish you luck

Jan

[lighton]

Included in mine are house insurance , pet insurance , car insurance , life insurance , dinner money for school , fuel car maintance , clothing , shopping , eletric , gas , water, kids clubs, allowance for social activities, car tax, respite care, every thing you can think of really within reason.

[lighton]

Rent etc are included as is council tax , i think maybe a proffessional will have to answer your question on morgage and rent payment.Not sure if you can claim expenditure on both.