Firstly thanks for all the extremely helpful information and support provided by the people that post on here - I've been reading hundreds of posts in my attempt to get my head around what is such a scary and confusing subject but I'm at the point now where I need to get a good night's sleep and can't continue to ignore my situation any longer.
I am hoping to apply for a joint IVA with my husband and together have debts of c£70k. I've completed an I&E on the CCCS website and it appears that we would only have c£200 per month surplus income.
I realise that this is a low monthly payment but I am due to receive a bonus of c£2k in 2011 and also 2012 and as we also own our home (which we believe currently has c£10-15k equity) we would surrender any equity in year 5 (which based on only a moderate uplift in value over the next 4 years would realise c£18k at 85% LTV). Also, if we stop making creditor payments within the next few weeks, we could accrue a further £3k which would be available to creditors.
I therefore calculate total return to creditors to be £12,000 monthly payments, £2k bonus payments, £18k equity release and £3k cash upfront, totalling c£35k before IP fees. Not sure how these are calculated but have assumed 15%, giving a net return to creditors of c£30k or 43 pence in the pound.
So my question is, although the monthly payment is low, would creditors look beyond that and is the above proposal likely to be acceptable to them? (I should also mention that LloydsTSB is our majority creditor with just over half the debt).
Any advice would be appreciated as well as any recommendations on company's that would deal with low monthly payment IVAs.
Hi there it certainly looks like you've done your homework so well done on that score.
I would take a look at www.iva.com for a list of companies and some reviews of these. Always take the professional advice of 2 or 3 companies to gain that all important free impartial and most importantly case spefic advice.
If your calculations are correct and I'm not suggesting they're not in any way then 43p in the £ is a good return to creditors.
I wish you all the best x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
The dividend your proposing will be attractive to creditors Im sure. You really need to discuss your options with an IP. Do not think for a minute that your return is low. We had our IVA proposal accepted on Monday gone, and were paying back 26p in the £ on £130k of debt.
Make that call, after having looked at the reviews www.iva.com
Good morning. A low disposable income in itself should not prevent an IVA being proposed, as any IVA should be based around a fair and reasonable budget to ascertain affordability. The only time that low disposable incomes become a problem is that certain organisations are just not set up to deal with those sort of cases and who therefore would not be in a position to take your case on. However, there are firms that will work with low disposable incomes so do take time to shop around, if you are told that your afforability rules out an IVA then speak to some one else, as your scenario looks perfectly winnable to me.
One point I will take an opposing viewpoint to you on though is your assertion that if you stop paying creditors then you will accrue £3k. Unless I am missing something here then that is not possible. Assuming that your calculations are there or therabouts in regard to affordability, then if you cease payments now, and if the process takes 3 months from start to finish (it shouldn't but let's work on the safe side) then your pot at that time will only be £600, i.e 3 times D.I not 3 times the equivalent of unpaid contractual payments.
Hope this makes sense.
Regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
I agree with Size5 that saving up £3k does not sound feasible. Everything else does although I would not put any faith in rising property prices.
A low surplus does not mean an IVA is not an option and usually means the opposite as there really is no other option than bankruptcy. Seek some free advice and best of luck.
Just to clarify on the £3k cash point. I am currently on maternity leave and we managed to save up a pot of cash to cover all our expenditure for this time, including minimum contractual payments on our credit cards. This cash will only cover the next few months so rather than continue to pay interest I thought it would be more sensible to stop all creditor payments so that the cash is available upfront to go into an IVA. As our monthly minimum contractual payments are c£1,400 then I should be able to offer around £3k, even with a little back as contingency as suggested by Helen. However, if I don't start the IVA process soon, this cash pot will be eaten up by interest in the next few months and then we will be back to £200 pm disposable income.
Hope that makes sense?
Size 5 - would it be worth me contacting Cleardebt to discuss my case?
Michael - I have had initial discussions with one of your staff but was told that an IVA would be unlikely to be successful due to my low DI (and the fact that my majority creditor is Lloyds who tend to prefer DMPs). Should I revisit this with your company?
Hi again, thanks for clarifying that point with us.
I cannot self promote on the forum, the forum is not really about that, but of course if you wish to speak to us or anyone else then feel free to do so, you should at least get a feel for what all your options actually are.
There may be compelling reasons for or against, for example things may still be a little up in the air as regards going back to work or not when your mat leave finishes, costing of childcare if you do go back etc etc and all of these things need to be taken into consideration before you make your own mind up, but one way or the other I am sure that you will get to the right place eventually.
Regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
If Lloyds are over 75% of the debt they often prefer DMPs although at your level of debt this is not feasible. By all means speak to someone again as I see no reason why your proposal should not be prepared in the manner you describe.
Our professionals can all be contacted via the experts link and do all come highly recommended. Have a chat with 2 or 3 and get that all important impartial advice. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
The mix of your contributions, savings and intent with regard to the equity in your property would in my opinion make a very good IVA offer to creditors.
Do make sure that you consider all options, and taking advice from an insolvency pracitioner will enable you to have a more rounded view of what would be the best option for you and your family moving forward.
Best of luck with whatever route you decide to follow.
