Setting up an IVA

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mumof3
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by mumof3 » Thu Nov 30, 2017 2:44 pm
Myself and my husband are in the process of setting up an IVA. We are due our first meeting next week.
I have a few questions.
1) We can’t meet our minimum payments without leaving ourselves with nothing to live on (we have 3 children to provide for). Should we cancel the direct debits and not pay, or is this the wrong thing to do?

2) Do we need to contact each debtor and explain we won’t be paying and that we are speaking to someone about setting an IVA up?

3) We have opened up a new bank account that is not linked to any debtors, is that correct?

4) Do you think we will get our IVA approved? We owe £40k. Our income is £2,374 a month (I don’t work). Our expenditure is £2,032 a month (all bills and living costs) leaving us £342 a month to pay to debtors. We have a house but have no or little equity in it at the moment.

We are both very stressed out at the moment and are just scared about the whole situation.

Thank you so much for reading.
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kallis3
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by kallis3 » Thu Nov 30, 2017 2:49 pm
Hi,

You do not need to pay your creditors whilst setting up an IVA but I advise going into online accounts and removing contact details.

If anyone does phone you can explain this or refuse to answer security questions so they cannot carry on.
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kallis3
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by kallis3 » Thu Nov 30, 2017 2:51 pm
Sorry pressed submit too soon!

New bank account is good, most IVAs get approved.

Which company have you chosen?
mumof3
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by mumof3 » Thu Nov 30, 2017 3:05 pm
kallis3 wrote:
Sorry pressed submit too soon!

New bank account is good, most IVAs get approved.

Which company have you chosen?


We are speaking to stepchange.
So should I ignore any contact about missed payments? I’m scared they would get bailiffs involved as we haven’t set the IVA up yet.
I thought I would have to contact debtors to let them know what we are planning to do?

Thanks
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kallis3
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by kallis3 » Thu Nov 30, 2017 3:23 pm
I doubt any debt collectors/bailiffs will turn up - if they did you don't need to speak to them or open the door, Make sure you read all paperwork from Stepchange before signing. Your creditors will be informed by Stepchange. Save payments as a contingency fund for any emergency whilst setting things up.
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Lisa Thomas
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by Lisa Thomas » Thu Nov 30, 2017 3:29 pm
mumof3 wrote:
Myself and my husband are in the process of setting up an IVA. We are due our first meeting next week.
I have a few questions.
1) We can’t meet our minimum payments without leaving ourselves with nothing to live on (we have 3 children to provide for). Should we cancel the direct debits and not pay, or is this the wrong thing to do?

Yes cancel the DD's.

2) Do we need to contact each *debtor and explain we won’t be paying and that we are speaking to someone about setting an IVA up?

*creditor. Little point if you are acting quickly as the chosen IP will do this for you, but you can if you want to hold them off in the meantime.

3) We have opened up a new bank account that is not linked to any debtors, is that correct?

Yes that's fine. I presume its a basic bank account/s with no overdraft facility.

4) Do you think we will get our IVA approved? We owe £40k. Our income is £2,374 a month (I don’t work). Our expenditure is £2,032 a month (all bills and living costs) leaving us £342 a month to pay to debtors. We have a house but have no or little equity in it at the moment.

This will be up to creditors to decide - Stepchange should give you a good idea whether or not they think an IVA is viable after your meeting.

We are both very stressed out at the moment and are just scared about the whole situation.

Don't worry - the best thing is you are taking steps to sort things out. Bear in mind some IPs use protocol terms and some don't. Those that do will likely include an extra years extension in lieu of the equity in your home so bear that in mind.

Thank you so much for reading.
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Keith White
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by Keith White » Thu Nov 30, 2017 3:36 pm
I agree with the others re stopping the payments if they are unaffordable. Some people pay a token payment. If they contact you simply tell them the truth about the IVA. Ditto on the bank account - you have done the right thing. Although it's a scary time till the IVA is accepted - you're joining thousands of others in the same boat and I'm sure you'll be fine. It sounds as if the IVA is in the creditors best interests as well as yours. Looking after 5 of you during the IVA is a costly business, so try to ensure the IVA payment is as low as is likely to be acceptable to the creditors. Get a second or third opinion if you feel that £342/mth will leave you financially tight.
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Foggy
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by Foggy » Thu Nov 30, 2017 3:48 pm
Completely agree with all of the above. The IVA payment shouldn't leave you living on beans on toast and should be affordable -- cut the cloth too tight and the seams are likely to break !
mumof3
Posts: 7
by mumof3 » Thu Nov 30, 2017 4:10 pm
Thank you everyone. I think we can manage on the budget. Will just have to pull our belts in for birthdays and Christmas.
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kallis3
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by kallis3 » Thu Nov 30, 2017 4:24 pm
Not for this year but consider doing online surveys and saving up for next year so you can use vouchers - it has funded Christmas for me for many years.
mumof3
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by mumof3 » Thu Nov 30, 2017 4:32 pm
Foggy wrote:
Completely agree with all of the above. The IVA payment shouldn't leave you living on beans on toast and should be affordable -- cut the cloth too tight and the seams are likely to break !


I’ll put up the budget later on once I can concentrate. Then if anyone has any suggestions that would be great!
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luna
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by luna » Thu Nov 30, 2017 5:23 pm
Hi

We found Stepchange to be superb from start to finish so if you stay with their IVA dept you'll be in good hands.
You never hear of any issues with them on this forum.

Good luck.
mumof3
Posts: 7
by mumof3 » Thu Nov 30, 2017 5:27 pm
luna wrote:
Hi

We found Stepchange to be superb from start to finish so if you stay with their IVA dept you'll be in good hands.
You never hear of any issues with them on this forum.

Good luck.


That’s fantastic news. They have been really helpful up to now!
mumof3
Posts: 7
by mumof3 » Thu Nov 30, 2017 7:13 pm
Here is our budget.

Mortgage - £414
Other secured loans (help to buy) - £38
Ground rent and service charges - £5
Council Tax - £138
Gas - £30
Electricity - £50
Water - £35
TV Licence - £13
Buildings and contents Insurance - £21
Life Insurance - £30
Repairs and Maintenance - £30
Food, toiletires and cleaning - £500
Clothing and footwear - £95
Meals at work - £40
Sport, Hobbies and entertainment - £70
Sundries and emergencies - £58
Dentist/Opticians - £28
Medicines/Prescriptions - £22
Fuel and Parking - £120
Spares and servicing - £15
Telephone, mobile and internet - £59
Pets, pet food and insurance - £20
Hairdressing - £40
Childrens pocket money - £30
School trips and acitivites - £21
Road tax - £25
Vehicle Insurance - £49
Vehicle breakdown cover - £17
Childcare - £20


Total - £2,032

Income

Husband wage (after deductions) - £1,905
Child benefit - £210
Child tax credits - £259

Total - £2,374
Last edited by mumof3 on Thu Nov 30, 2017 7:58 pm, edited 1 time in total.
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Foggy
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by Foggy » Thu Nov 30, 2017 7:36 pm
Guideline MAX figure in red

Mortgage - £414 what it is
Other secured loans (help to buy) - £38 what it is
Ground rent and service charges - £5 what it is
Council Tax - £138 This might well be made a creditor
Gas - £30 what it is
Electricity - £50 what it is
Water - £35 what it is
TV Licence - £13 what it is
Buildings and contents Insurance - £21 might be refused
Life Insurance - £30 might be refused
Repairs and Maintenance - £30 might be refused
Food, toiletires and cleaning - £500 [color=#FF0000 2 adults & 3 kids £612[/color]
Clothing and footwear - £95 2 adults & 3 kids £93
Meals at work - £40 £42 per adult
Sport, Hobbies and entertainment - £70 2 adults & 3 kids £71
Sundries and emergencies - £58 2 adults & 3 kids £83
Dentist/Opticians - £28 2 adults £28
Medicines/Prescriptions - £22 2 adults £22
Fuel and Parking - £120 £200 per car
Spares and servicing - £15 £30 per car
Telephone, mobile and internet - £59 2 adults & 3 kids £77
Pets, pet food and insurance - £20 £34
Hairdressing - £40 2 adults 3 kids £45
Childrens pocket money - £30 £36 for the three
School trips and acitivites - £21 £21 for the three
Road tax - £25 What it is
Vehicle Insurance - £49 what it is
Vehicle breakdown cover - £17 might be refused
Childcare - £20 what it is
Life insurance - £30 Might be refused (and duplicated above)
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