would I qualify for an IVA

[JoanneG]

I am £20k in debt (5 creditors) which amounts to £600 monthly repayments. I take home £1658 a month and living at home I can comfortably afford the repayments and live so does that mean I wouldn't qualify for an IVA?

[scaredkez]

hi joanne welcome to the forum, looking at your figures and you say you can comfortably live as is, i wouldn't advise an iva, i would cut up your credit cards and not use anymore crdit facilities, keep paying your 600 a month and your debt would be paid off before 5 years, in an iva you would be paying your disposable income which could be more than you pay now if you are comfortable, iva's are for people who cannot pay their debts comfortably and are insolvent.
if you wish to reduce your debt i would try and pay more off per month starting with the highest interest cards to bring balances down and then work on the others remembering to pay them all each month, i hope this helps but an iva is not for somebody who can afford their debts and is no way a get out quick scheme.
i hope this helps
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[JoanneG]

Thanks so much for your reply Kerri.

It is so hard to know what is and what isn't right and having buried my head in the sand for 4 years I am really scared but determined to fix my debt problem. It's just hard to know where to start! I am lucky enough to be living at home which is probably the only reason that I can meet my payments and live. I have cut up all my cards and am paying all my monthly payments whilst trying to put extra on my highest interest credit card.

Is my best bet to try and continue to manage things myself in terms of slowly chipping away at it and like you said hopefully being clear in 5 years? Just to give you an idea of my debts (8k loan with egg, 4k loan with Alliance and Leceister, 3.5k barclaycard, 2k Royal Bank of Scotland card, 2k mint card and £1800 overdraft.

Debt is such an awful thing and has felt like a dark dirty secret that I have carried around with me for a long time. Reading this forum has shown me that I am not alone and that there are solutions.

Thanks again for taking the time to reply to me.

[MelanieGiles]

Hi Joanne

I am assuming that you mean that you can afford to meet the contractual payments to your creditors, so why would you want to enter into an insolvency procedure? You are clearly not insolvent, and therefore do not qualify for an IVA, and should therefore continue to make your repayments as they fall due.

The advice of the earlier poster to watch your spending is probably good advice, and just make sure that you can afford to meet the repayments on all futgure borrowings.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[JoanneG]

Hi Melanie

Thanks for your reply.

Yes I am meeting my contractual monthly repayments.

To be perfectly honest I didn't actually address my situation until very recently. In that time I have been making an effort to pay off as much as I can afford on top of the minimum requirements on my credit cards. It has become apparent to me though that the debt I am in is going to take a very long time to shift and I genuinely didn't know what my options were. Having not talked to anyone about it and not really knowing much about it I thought that that meant I would have to go bankrupt. Having researched things a bit more I realise that that isn't the case however, I did not know if an IVA was appropriate when I read that it was for people with £15k plus unsecured debt. I find it all confusing. Thank you for your time and advice.

[go_4_broke]

Hi Joanne/All

In spite of the previous comments I'm not so sure it's quite as simple as that.

You are clearly not insolvent in a cash-flow sense in that you can meet repayments as they fall due.

However you are almost certainly insolvent in an assets/liabilities sense because as you live at home you have few or no assets, unless you have an expensive car or something.

So technically you could be in a position make yourself bankrupt. However this would be fairly pointless not least because of the adverse consequences of bankruptcy but because you would end up paying back all the debt anyway.

Same is true of an IVA. Even if you could persuade your creditors to give you one you would still pay back 100% of the debt, plus IP fees in lieu of interest !

If you're done with credit you might want to consider a DMP (Debt Management Plan), especially if your circumstances change. You will still pay back 100% of the debt and it will have an extremely adverse effect in your credit rating. However as interest is stopped (theoretically at least) you'll still be paying a lot less than under the 'just pay it back' option.

If you want to go that route contact someone like CCCS www.cccs.co.uk as the private sector is something of a shark pool.

Clearly your debt is giving you stress and there ought to be something you can do.

-Best

'5 years sticking my head into the Lion's mouth of debt !'

[JoanneG]

Hi go_4_broke

Thank you for your reply and your comments. I will have a look at the CCCS site. I am new to all this stuff, well as much as trying to sort it out is concerned!!

My next step is talking to my parents and coming clean about the state I am in....I think that is almost the scariest part!

Thank you again for taking the time to write back. I really appreciate the suggestions and just the fact that someone out there is interested enough to offer advice

[go_4_broke]

Hi Joanne

I'm sure that once you've figured out the options, the other hurdles will be easier.

Best of luck with it anyway.

'5 years sticking my head into the Lion's mouth of debt !'

[MelanieGiles]

Joanne

My own view is that you do not need professional assistance at all, as the costs of this will eat into your repayments thus extending the eventual repayment period. Can I suggest that if you are struggling you speak to your creditors directly to see if they will accept lower payments. This will ease your cashflow a little and get the debts paid off as quickly as possible. Your creditors will actually respect you for going down this route.

This is a bit of a wake up call for you, and you are acting very responsibly by considering all options available.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Hi Joanne
You have done well to realise that you may have a problem but you have acted in good time and I agree with Melanie in that you do not need profesional assistance at this stage.
Kerri has given the best advice,cut up your cards and pay off your cards by paying the minimum plus as much extra as you can afford.
Regards

[scaredkez]

hi joanne i totally agree with mel, you don't want to incur further costs by going down the dmp route as some of these providers charge you for this sevice as you said you are comfortably meeting your payments at present, i would budget yourself and try and reduce what you can, not all creditors will stop interest charges for a long period of time anyway, under a dmp. i hope you can sort yourself out and commend you for waking up to your debts now when you can actually do something about it
take care
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[go_4_broke]

Hang on tho - CCCS don't charge. At all.

I simply believe people who have 'done with debt' should have some kind of framework to move on if they want it, whatever their circumstances. Can't hurt to ask.

-Best

'5 years sticking my head into the Lion's mouth of debt !'

[JoanneG]

Thanks all for your comments and advice.

I feel reassured by your advice and realise that as long as I stick to it I can reduce this horrible debt!

It's mad how quickly it all adds up but how long and hard it is to pay back. Still I think I have learnt my lesson.

Thanks again