To be nervous about IVA?

[GenieMermaid]

No judgement please.

I work full time in the civil service and I have around 9K worth of debt in my own name consisting of overdrafts, credit cards/payment plans like very/Klarna and a loan. I’ve always been relatively on top of repayments but in the last 3 months or so I’m really struggling to keep up with the repayments of it all and have defaulted on some credit card and Klarna repayments ultimately making everything worse.

I’ve been getting so anxious for a while but have stupidly buried my head. Today I decided enough was enough and spoke to a free debt advice service who went through my options. I’m a homeowner with a joint mortgage, living with DP, 1 DS, and apparently my options are limited unless I wanted to risk our house (which I obviously don’t want to do! Bankruptcy seems far too extreme). They also said a debt management plan would mean I’d be paying back for around 15-20 years with what I can afford!

They have suggested an IVA and although I know my credit score will be wrecked for a few years, and my DP will likely not be happy about it - (yet to talk to him as I don’t want an argument), I’m failing to see what other options I have? I’m just worried about when we need to get a new mortgage after our fixed rate ends (in around 2 years) and if it will effect DP in any way or mean anything negative for the mortgage. I’m very nervous and find it all very daunting.

can you give me your experiences please?

thanks!

That's frustrating as your debt is not that high. I'm sure you've already looked at it but are you sure there is no way to increase your income?

I have just done an IVA, gone back to uni so my income is very limited and affording my debts every month was rinsing my student loan. I know an IVA sounds really scary but for me it was the only way. i had some income i couldnt claim bankruptcy but enough to arrange one payment a month. I was paying out nearly £600 a month on loans, cards, payday loans etc and now i pay £85 a month, its for 5 years and whatever is left over to pay after 5 years is wrote of completley. however, i will likely nearly almost pay it. I thought i had only around £4,000 in debt but actually had £6,500. When you add the interest amounts on top its just completley unrealistic to pay of. You are forever playing catch up and makes you short every month so then you have to rely on credit to get through the month.

I honestly wish i had done it months ago because i could have saved thousands earlier. I used a company called quality insolvency services and they were lovely, helped me every step and were realistic with my monthly expenditure to always over estimate so i wasnt short. They told me the most you would pay on an IVA monthly is £100, like i said im paying £85. The stress, anxiety and sleepless nights was to much and I couldnt keep ignoring it.

Yes, it stays on your credit file for 6 years , you cant open credit during this period but actually its a blessing as it became to easy to get credit for cards etc. I would rather save the money now and live within our means. Too many people are living beyond there means and at the rate the economy is going I would rather have all my ducks in a row.

If you do the IVA, i would recomend cancelling all direct debits , standing orders etc to anyone you have a debt with cause they will still try take the money as it can take up to two months for it to officially register but once its been approved usually takes 3-4 weeks then you can request a refund back from any debtors that have taken money knowing the IVA is in place, and you can prove it with the reference for the IVA and the report they give you after there meeting with the creditors. Sounds really scary but it was entirely worth it for me as now i sleep and have more money each month.

I know to many people racking up in tens of thousands in debt and paying out thousands a month for things , it scares me. I know one who pays out more in debts then they have coming in , there car finance is more than there house mortgage and they still put holidays and new stuff on credit cards, they admitted they owe over £30k in debt !!