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has anyone done an IVA/know ways of getting help with debt?

(28 Posts)
mad4mybaby Mon 15-Sep-08 16:39:56

We have alot of debt and have a very high mortgage. We have a v high amount of outgoings and DH wage covers these.

Im pg and also have a 2 yr old. I can not go back to work (partly due to pg) but also to put 2 young children into full time nursery would be more than i could earn a month therefore not an option.

We have a very high mortgage with a £30k unsecured loan attached to it aswell. We can not sell our house as now in negative equity plus have a £12k redpemtion on it if move within 5 years (have been here 2 yrs).

The £30k isnt the only debt. Have thought about bankruptcy but decided against it as there would be so many things we'd lose and there fore have to find the money to buy replacements (car and things on finance) Also have a huge overdraft we cant get out of.

Now the hard part is DH earns very good money but we are in an awful situation.Have looked into IVA and wondering what they class as debt 'you can not afford to pay off'? As in we are paying toward debt but not getting out of it and wondering if DH size of wage makes a problem? Before anyone jumps in to have a go please dont just slate me, im just after anyones help/advice who have been in our situation.

mad4mybaby Mon 15-Sep-08 19:15:57

bumping

CountessDracula Mon 15-Sep-08 19:20:09

An unsecured loan can't be attached to a mortgage surely. Unsecured is unsecured.

The £12k is only if you redeem the whole mortgage. If you were to buy a cheaper house (say for eg your mortgage is £300k and you only needed a £200k one you would only redeem £100k of the mortgage and therefore pay £4k not £12k IYSWIM.

Though I guess if you are in neg equity that doesn't help much.

You need to talk to the CAB I would say. They might be able to get interest payments frozen to enable you to make inroads into your debt.

Could you get an evening or weekend job so you didn't need childcare?

mad4mybaby Mon 15-Sep-08 19:24:37

dh works away and dont have anyone to look after ds, being 30 weeks pg dont think i could handle working w/e on top of everything....

CountessDracula Mon 15-Sep-08 19:24:44

have you looked here

lulumama Mon 15-Sep-08 19:26:48

can you go to CAB.. tehy will have debt cousnelling

hav you approached your creditors to see if you can reduce payments

can you sell your car and buy cheaper

things like that?

fymandbean Mon 15-Sep-08 19:26:54

go to www.moneysavingexpert.co.uk

I think you need to do two things...

1) Get outgoings down, We find every time we do this we can cut our outgoings by switching electricity companies, getting cheaper cards/loans etc. Use all savings to go towards paying off debt. You need a proper budget and stick to it (and I know its hard to do)

2) Get advice on getting out of debt try here forums.moneysavingexpert.com/forumdisplay.html?f=76 - I think the previous poster is right - do some work when the kids are with your DH and again use this to pay off debts

mad4mybaby Mon 15-Sep-08 21:34:12

we've done really well last few months and stick to budget and dont go over and dont fritter money but we just cant get the outgoings any lower than they are. We have 2 cars that are on finance (dh needs his for work as travels and with 2 yr old plus baby on way i cant do without mine as live to far to walk anywhere) also what we'd get for them is lower than the final payment therefore dont have the money to settle it.

Rates going up obv dont help and worry me because our gas and elec are going up soon and worried how much that'l be.

Feel really down about it and feel stuck in a rut!

AtheneNoctua Mon 15-Sep-08 21:53:58

Contact payplan. They will work through your budget, and help you contact creditors and work out an affordable payment plan. They won't leave you with any luxeries but they will leave you enough to live on.

Payplan

windyweather Mon 15-Sep-08 22:02:39

Will watch with interest for friend. If you go on reduced payment plan does it affect your future credit.

AtheneNoctua Mon 15-Sep-08 23:24:23

Yes, you can still default. But Payplan can probably keep CCJ from coming. And they can keep you out of IVA/bankruptcy which is much worse than a default.

MARGOsBeenPlayingWithMyNooNoo Mon 15-Sep-08 23:50:00

Have you tried extending the term on your mortgage to reduce your payments? I wouldn't advise this as a long term solution as you'll be paying more back in the long term.

It depends if your lender allows this sort of flexibility on your mortgage.

I have done the opposite thing and reduced the term of my mortgage and I'm paying an extra £70 per month - I'm trying to account for the interest rate rise once my fixed rate expires.

mad4mybaby Tue 16-Sep-08 09:35:58

our mortgage is on the longest at 35 years.... we've had to take a payment holiday this month which we didnt want to do because of long term but needed it now...

Does anyone hknow how iva affects your credit rating and how long for?

overthemill Tue 16-Sep-08 09:53:33

i would advise (as a former debt advisor) that you need to sit down with a person who can explain everything to you and run through a list of around 3 options that you have.

Lots of people are feeling the pinch but at the moment credit/debt organisations will be trying to screw customers for as much as tehy can. You cannot manage this alone. The first step is admitting that you have allowed your debt to get out of hand.

CAB can be great as can Payplan. Or a specialist debt advisor. NEVER NEVER use any of the companies who advertise that they will get rid of your debts (eg on TV). Your local council (the one you pay your council tax to) may be able to give you a list of local advice agencies.

Start off by making a list of every single thing you owe, eg mortgage, credit card, electricty, money borrowed from your mum.

Then make another list of everything you spend money on, EVERYTHING.

Then what you get in inc child benefit etc

Then total each up and see what the difference is eg monthly outgoings (at present) minus income. I expect it is a big minus. eg all outgoings: £2567. income £1900
total debts exc mortgage: £67500 mortgage £375000

Does your dh know the extent of your debts? If not you need a sit down with him. It may be painful!

Armed with these lists which have to be compeletely honest,seek advice.

moneysavingexpert is fantastic, use teh advice you find on there about thrifty living. Try cutting your budget by another 20% and see if you can manage on taht, eg tesco value food instead of tesco's own brand etc. there are lots of money saving threads here

good luck, come back!

mad4mybaby Tue 16-Sep-08 10:03:15

Dh completely aware! In it together!! He just told me (i didnt know this) that he earns too much for us to do an IVA!!!

AtheneNoctua Tue 16-Sep-08 10:22:17

An IVA is basically a lesser form of bankruptcy. I'd stay away if at all possible. Payplan is not inthis for profit. So there advice is very sound and it is free. I really really recommend them. They will talk to you about IVA and about a payment plan. I think as a rule of thumb if you can pay off your debt in a resonable amount of time (5 years?) they will recommend the payment plan and not an IVA.

Good luck!

mad4mybaby Tue 16-Sep-08 10:28:33

thanks guys

mad4mybaby Tue 16-Sep-08 10:30:06

sorry just another question, when they ask total debt (on payplan) what is included in that? Im guessing not mortgage? What about cars on finance and our unsecured loan attached to mortgage?

AtheneNoctua Tue 16-Sep-08 10:45:32

I think they mean EVERYTHING. They will identify priority payments. For example if you need the car to get to work, then obviously you have to make payments on the car. Mortgage is a priority because of course you have to have a place to live. You can forget about entertainment, posh food, and designer jeans. But they will accept enough for you to live on. If you have an overdraft they will expect that to be paid off.

Creditors will continue to call you. Tell payplan. Call them for advice, and follow their advice. Write all of your creditors and tell them you are working with Payplan. This will usually get them off your back. They won't go away completely, but it should keep you out of court.

AtheneNoctua Tue 16-Sep-08 10:48:30

And if a bailiff shows up at your door, DON'T let them in. Don't let anyone in. I can't remember why, but I think once you give them permission to enter they can take your posessions to settle the debt. You obviously don't want this to happen. I could be wrong on this. I can't remember the details or where I heard it.

Oh, and I am not a debt counsellor so the poster who is probably giving better advice than I am.

mad4mybaby Tue 16-Sep-08 11:03:34

well we arent thankfully in that sort of a position, we dont miss any payments or anything like that, we make them all but really struggling.

AtheneNoctua Tue 16-Sep-08 11:06:46

Have you got high interest debts (i.e. credit cards)? Have you looked into a debt consolidation loan?

carmenelectra Tue 16-Sep-08 11:12:23

Hello, my sister applied for an IVA earlier this year as her and her partner were struggling. He has a good job, but my sister did have two jobs but due to childcare issues she had to leave one and this halved her income. The IVA company said that you can be considered if you have debts of more than £15000(obviously excluding her mortgage).

Anyway, she was turned down as many of the crditors involved wouldnt agree to it. So now she is going through a debt management company which will allow her pay off her debts at a very small amount each month but at least they will be paid although it will clearly take the rest of her life.

Maybe this would be an option?

mad4mybaby Tue 16-Sep-08 11:22:29

we have already done a debt consolidation loan, that is what the £30k loan attached to mortgage is! so dont really want to go down that route. We have a £10k mortgage and get charged around £85 a month for it which isnt that bad, better than any of our c/cards. We have 2 cars on finance and a couple of things round the house that are 0% but paying monthly.

there is also another credit card in dhs name which i cant rememeber how much is on but pay on a dd and again is the lowest %. We looked into getting a new cc that has 0% interest but they had 2.5% handling fees and when you add that on to the minimum payments we just cant afford to do that either.

DS has started preschool so paying an extra £80 p/m but dont want to take him out and we dont get any help with that until he's 3 which makes me mad as in another year it'll be free!

AtheneNoctua Tue 16-Sep-08 12:16:26

I think they look at the ratio of how much you earn to how much you owe. So, while one person may qualify at £15,000 someone with a higher income wouldn't. If they can set you a budget where you can pay it off, they will recommend you do so.

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