Myself and my husband owe £30,000 of unsecured debt to 1 loan, 4 x credit cards and an overdraft. We have been going around in circles, looked at an IVA before but the company went through the lines of a debt management route (admitted it was their error) and ended up losing our paperwork which left us feeling really edgy. We finally got the paperwork back but have been left a bit scared by this incident. They hardly contacted us and we had to chase them everyweek to eventually find out nothing had been done. We were charged more late fees as they initially advised that we stopped paying the creditors.
Basically, we have no funds left monthly and are borrowing to pay minimum payment. We realise that we are going to have no life if this carries on as the interest and compounding debts is effected our marriage, the stress levels around the kids and we are at our wits end. We don't know which way to turn. We also sent letters to all creditors and sky card in particular harrassed us with numerous calls per day which I ended up ignoring as I didnt know what to say, I had sent letters to all companies. The rest were pretty ok it would seem.
The sound of an IVA seems great but the thought of having zero money left and not being allowed the simplest of pleasures in life is crippling. What I would like to know in terms of monitoring our finances. With an IVA:-
1 - Are we still allowed the basic holiday, we are not extravagant, we have learnt the hard way, we are talking about a camping holiday £300 all in.
2 - What about the monthly pleasures we have £30 local golf fees and £36 gym membership, we dont drink and smoke and dont go out so these are our only release although they dont get much use right now as we are constantly procrastinating about life and sorting debts etc etc.
3 - We know we have to take control and are not trying to get away with the responsibility of the debts but to have no life, 2 young kids, the point of doing this would be so we have 'some' life without the worry.
4 - How likely is that companies such as sky, halifax, cahoot, mbna etc will refuse an IVA.
5 - Can we stop making payments whilst going through the process as we have no funds left each month and not enough to shop with.
Any help greatly appreciated so we can make a start and make a decision. Any more dragging our heels and we are finished.
I can't answer your technical questions but I what I can most urgently urge you to do is talk to an Insolvency expert to obtain some best advice - the chat will be free. If you look on www.iva.com you be able to see reviews of the experts and judge for yourself. However, I can, without hesitation, recommend Melanie Giles (she posts on here). You will find that Melanie is first rate and is an expert at getting difficult IVAs through - she did it for me at first attempt.
After paying our bills and iva we have no money left over for treats. I think you are given so much each month contingency money which would go towards holidays and christmas etc.
Hello and thanks for the quick responses, it makes sense really, I dont think any solution would mean you dont have any life, its depressing enough being in all this debt. We just cannot seem to get the ball rolling for fear of being knocked back and all the paperwork involved after last time.
My other concern is if we have to pay money up front to an IVA company, this could also be lost if the IVA gets refused, we just don't have the money for this even. My head is spinning, I appreciate the responses very very much, thank you.
Hi rockyrobin,
You have taken the first steps in addressing the problem buy admitting there is one.
I would contact an Ip as soon as possible. i used Cleardebt (David Mond, really great service and my IVA was up and running with 42 days.
In answer to your questions.
1 Yes you still can have a holiday, but it will depend on what you can save out of your allowances.
2. You can try and get these included, but your creditors may try and get them removed to improve the return dividend.
3. once the IVA is approved, you will sense a great deal of relief and your outlook to the future will look brighter. Your reasons are why most people enter a DMP or IVA, it has given me an extra boost now i know i am dealing with my debts.
4. Sky - i can't comment on
Halifax - accepted Cleardebts proposal
Cahoot - Did not vote
MBNA - will not accept usually unless you can prove you can't repay it in 10years on a DMP, of which they are very fond off.
MBNA are many peoples worst creditor and always like to offer help , only to benefit themselves.
5. Once you have made contact with an IP, yes you can stop payments. It is best to keep as much of the money you save to use as a contingency fund once an IVA has set up. You could also use this as your fund to your holiday. Some people also make a token payment to their creditors whiltst theIVA is set up. But this is entirely up to you.
Best of luck and hope all turns out well. I know where you are as i was there in March of this year.
The main thing is to speak to an IP and get a proffesional piece of advice.
With Melanie the first IVA payment is made when the proposal is submitted - if in the very unlilely event it is rejected then the payment will be returned. Melanie does not submit propsals that she thinks would not be accepted. Mine was really difficult - a one off - yet as I told you she got it through on first attempt. Give her a ring - you will easier after the call
No, you don't pay upfront fees. If you are asked for a fee to initiate the IVA, then walk away and find another provider. With cleardebt, i only had to pay once the IVA was agreed.
Yes, cleardebt didn't take any money until my first iva payment was due. Stop making payments to your creditors and save some money as a contingency fund. We had some saved for a holiday this year but probably wont be able to afford another hol for a while. IVa's are set up fairly quickly if you decide its for you. It was best thing we did.
I also used ClearDebt and found them always helpful and friendly. The main thing is to find someone you feel comfortable with and if you care to take a look at www.iva.com you will find reviews of suitable companies to propose and iva for you. It would be worth speaking to 2 or 3 to see who seems the right choice for your individual circumstances.
Best Wishes
Paul
IVA.co.uk The best place for debt advice. Thanks to Melanie Giles, David Mond, David and J (Elv5) Kallis, Dand, Skippy, Andy Davie
Your questions have been largely answered by the other posters, but I have to tell you that golf and gym membership are unlikely to be allowed. There is a very small social leisure allowance agreed by creditors, which is really a pittance, but it may go some way to enable you to carry on with those little pleasures.
You often have to make sacrifices to have the privilege of getting an IVA agreed by your creditors, but the benefits of dealing with your creditors may fell far outweigh the things you have to put on hold for a while.
Don't forget that you can earn up to 10% of your basic salary in overtime and other extras, and this money can be kept and saved for holidays etc.
Hello everyone, thanks so much for the kind replies, its nice to know that someone is there who understands. Micky, thanks for going into detail, much appreciated. Why is it so hard to get started on this.
Melanie, I kind of guessed that would be the answer and that we would have to save from our bit that is left. I think what worries me greatly is how we go on with all the things kids need today, I dont mean need to survive, I mean requests from school etc etc etc, trips, lunch money etc etc etc. I have to face reality and get a grip on this before I sink with my thoughts.
With regards to what got said about MBNA not liking IVA'S and preferring Debt management, well £10k of the £30k debt is on a credit card with them. We have no equity in our house, 1k or so and other than an IVA dont know what other options we have, they didnt seem to want to know a direct payment plan and encouraged us to go down the debt management route or seek help. Is it worth applying for an IVA knowing this? and would it delay things greatly owing this to MBNA?
Any comments appreciated whilst we are working ourselves up to take the plunge. A couple of hours without the kids Saturday morning, we may get more chance to think straight. Cheers
Hi, RockyRobin
You really need to speak to one or two IPs. They will be able to advise you of the best way forward when they have full details of your situation. An IVA is an INDIVIDUAL agreement suited to your circumstances and every one may be different. IPs know all the major creditors and how they are likely to react to a given situation - it is too early to speculate on how MBNA or anyone else will respond. Make the calls - there is always a solution and it costs nothing to find out.
We have a mortgage, but zero equity or around 1k tops. Not sure how much we can afford to pay without scrutinising everything but probably around £230 or so depending on cut backs.
John thanks for that, I know the only way is to get moving but we have just finally sat down and decided to do something about this today so any guidance we are looking for, helps a tiny bit.
Rockyrobin,
It is probably hard to get started because at the moment you have options, although it does not seem like like it. For example you have bankruptcy, DMP's and IVA's amongst others.
Yes, it can be scary to take the plunge, but please do, the water is not as cold as you may think. Make a few calls to some of the IP's on here and discuss your options. Just doing this, will make you feel better. I assure it will as my debt problems seem to lift off my shoulders by just talking to cleardebt.
Alot of the things kids need are allocated and allowance for, ie school meals and the like. There are quite a few monthly allowances that you would not think of straight away. However, the downside is that some allowances do not seem that generous to a family.
With regards to MBNA. Yes they do like you to use thier DMP. I owed them c.3k and they said it would cost me £26 per month for 10 years. You need 75% of your creditors to accept the proposal and once you reach the 75% point, everyone else has to accept the proposal, even if they do not like the offer.
Please also remember, that your chosen IP would not put the IVA through if they thought that it would not get accepted.
I know it is a struggle to face the facts, but sometimes you need to take the bull by the horns and go for it. Make this Monday the day you start your journey to being debt free.
