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Original poster

Advice?

27 replies

BGreyhound752 · 21/02/2013 15:41

I am looking for some advice, I have £30,000 of debt on credit cards and loans which I cannot pay. I own my house with only a small amount of equity. I have approached a debt charity and they say I can pay £340 into an IVA, but I can't afford this!
I work out I can pay at most, about £250 a month. Can anyone recommend any good companies for IVA's?

OP posts:
noisytoys · 21/02/2013 15:53

The debt charities are the best ones to use because they are free. They use a set of figures called 'trigger figures'. It is an amount set by the government and CAB that is seen as the minimum amount a person needs to live on and the same figures are used across the board so it is unlikely that a different company will come up with different payment offers. The trigger figures give a very basic budget to live on (similar to JSA rates) Sorry cant help more than that hope it all works out for you.

LadyKooKoo · 21/02/2013 21:16

Why do they say you can afford it but you say you can't? What are the differences in your budget to the one they have made for you?

Original poster
BGreyhound752 · 22/02/2013 09:42

I didnt feel the debt charity I spoke with was able to give me enough time to discuss my finances in great detail, and most definately didnt have the personal and warming service I was hoping for. Im really struggling to manage to manage my monthly contractual payments at the moment and seem to be worse off every day. My expenditure was based upon my household and not individually which is 2 adults and 2 children. I was told that my food costs was far to high at £470 per month, which reflects my actual weekly spend of between £100-£110 per week. The debt charity advised me this would need to be reduced to £300 which is simply un-realistic in my eyes!! My petrol costs and monthly clothing budget was also queried. Thoughts and commments would be greatly appreciated! I need to resolve my current debt level but dont feel at present and IVA is viable based upon the current guidance received :-(

OP posts:
HappyAsASandboy · 22/02/2013 10:03

Surely £300 food budget for 2+2 is doable, and to be honest, anything more than an absolute basic clothes allowance for the children's uniforms/new second hand clothes for the children if they are still growing is a luxury (which you probably can't afford if you're looking at an IVA).

The idea of an IVA is to help you help yourself deal with your debts. It isn't intended to write them off while allowing you to continue your life as normal.

I am sorry if this sounds harsh, but unfortunately it is the situation you find yourself in because of large debts.

noisytoys · 22/02/2013 10:18

I used to work for a debt collection agency pre DC's. The budget you have been quoted sounds about right. They usually allow £5 per person per month for clothes and about £10 per family per month for treats. It isn't intended to provide a good quality of life, it is intended to show your creditors you are doing everything you can to meet your payments. Sorry t isn't what you want to hear

specialsubject · 22/02/2013 10:24

if you are an adult in the UK, you don't need any new clothes. In these circumstances you go to the charity shop if anything REALLY needs replacing, and your knickers are a fiver for a pack from Tesco.

you are also spending way too much on food. Doesn't mean eating junk, just means eating properly, wasting nothing. No drinks except water (which comes from the tap) and milk, no ready meals, no chocolate, no bottled cook in sauces...you get the idea.

good luck.

keli5325 · 22/02/2013 10:30

I am sorry that you are finding things difficult at the moment.

When you complete an expenditure you will be assessed using the CCCS guidelines, these guidelines for 2 adults and 2 children are:

Max £505 for food and toiletries
Max £64 for clothes and footwear

An IVA or bankruptcy is NOT a prison sentence and you are allowed to have a life.... To suggest that you have to buy 2nd hand clothes or be allowed £5 per month for clothes is quite frankly ridiculous!!

I suggest that you speak to a few companies to see what they say about how much you will pay into an IVA before you decide to commit to an IVA, it is a 5 year agreement so needs to be realistic.

As for fees, fees in an IVA are the same regardless of whether you use a charity or a company and the creditors limit these fees, just avoid people who charge for upfront advice.

All the best and look online for reviews x

specialsubject · 22/02/2013 11:52

why is buying 2nd hand clothes, or no clothes at all for adults until needed, 'ridiculous' - for anyone???

funny definition of a 'prison sentence'.

LIZS · 22/02/2013 12:00

Think you need to follow debt charity's advice as if it were to go to court you'd probably find things even harsher. The difference between your calculation and their's is still less than between the amount you currently spend on food and proposed. By quibbling it seems you haven't really taken on board the reasons why you are already in such debt. Are you both working ?

keli5325 · 22/02/2013 12:07

It is ridiculous to expect anyone NOT to be allowed to replace their clothes when they enter an IVA for 5years! The OP suggested £5 per month that is £300 over 5years for a family of 4 people!

LadyKooKoo · 22/02/2013 12:09

I can only echo what others say and state that you have to be realistic. If you are in debt then you should not have a ?monthly clothing budget? for yourself and the children?s should be minimal. Supermarkets, Primark etc do perfectly good clothes for children at tiny prices. In regards to food, there are loads of threads on here about cutting down on food costs so I would suggest you look at those. I am sure at least a third could be shaved off that by changing your habits. To get rid of debt and to remain out of a debt requires a life change.

LadyKooKoo · 22/02/2013 12:10

The OP actually hasn't stated what her clothing budget is......

Original poster
BGreyhound752 · 22/02/2013 12:10

Thank you comments, i would like to think that there is a company out there who can propose an IVA at a reasonable leveL. Im currently awaiting a call back from an IP in the next half hour. Sorry LIZS what do you mean court? This process is starting to frighten me now!!! I really think i need some proper advice.

OP posts:
LIZS · 22/02/2013 12:15

IP? If you go with a private company they will take commission from your payment to them and your debts won't reduce as quickly, so it could well cost you more overall. Eventually one or more of your creditors will start proceedings to recover) their money if you stop servicing them (ie making minimum payments) . Unless you have a payment plan in place or agreed a judge can make an order against you (CCJ) and demand you pay a specific amount. Are any secured ?

noisytoys · 22/02/2013 12:16

I said £5 per month per person. That is the figure given by CAB. Not £5 per month per family. You must have misread. The budget for the whole family is for treats, which are a bonus

keli5325 · 22/02/2013 12:27

I did misread you post, nevertheless the CCCS guidelines for clothes are for a couple are £40 to £53 per month and an additional £13 to £15 per month for each child

keli5325 · 22/02/2013 12:32

LIZS an IVA is a legally binding agreement which means creditors cannot charge interest and fees and cant take legal action, at the end of the IVA the remainder of the debt is written off.

Fees are the same in an IVA whether you use a "Private company" or a "charity" - the fees are set at the start of the IVA and fixed by the creditors.

LIZS · 22/02/2013 13:19

yes but op hasn't got one in place yet so is still vulnerable to action. In meantime she needs to get interest frozen and not add to the debts.

keli5325 · 22/02/2013 13:30

How did you chat go with the IP Bgreyhound? I hope things work out for you :-)

Original poster
BGreyhound752 · 22/02/2013 14:30

Hi all, I have spent my whole day researching the web and have just been speaking with an IP named Melanie Giles. I am also waiting on another phone call this afternoon for a second opinion. I have found many peoples views on her different although supporting in a way. After speaking openly about my problems I already feel a lot better and may even get some sleep tonight! I have agreed my clothing costs at £50 and food at £450, leaving my IVA payments at £210. I feel this payment is already a lot more manageable and a realistic budget. I understand that this gives an approximate return to my creditors of 30p. I must be honest, this is all very new for me and an awful lot to take in. Has anybody had any experiance with Melanie Giles?

OP posts:
LIZS · 22/02/2013 14:51

You have checked the Fees she charges ? I've no idea how that compares to other IPs but if you went through cccs etc you may not have to pay those and it could be put towards your debt payments instead.

keli5325 · 22/02/2013 14:56

The fees in an IVA are charged in exactly the same way through Stepchange or Melanie Giles - Stepchange are only FREE for their DMPs.

The fees are capped at 15% of total monies paid into the IVA regardless of who you use

keli5325 · 22/02/2013 14:58

LIZ do you think that there are no fees in an IVA through Stepchange?

Original poster
BGreyhound752 · 22/02/2013 15:05

Hi LIZS, I belive from carrying out my research that cccs, who I now belive are known as Stepchange, also charge fees similar to that of a private IP firm does? It also states the following on their website;

?No upfront fees
The costs involved in running your IVA will be taken from your monthly payment.

I am gathering as much knowledge as possible I can from speaking with both debt charitys, online help and this forum with a view of resolving my debt problem very soon. I have been very happy with the personal service from Melanie and if nothing else she has made me aware of all the options avaialble to me. Any further thoughts and tips would be appreciated!

OP posts:
LIZS · 22/02/2013 15:07

Not sure tbh but it seems a little perverse to charge those already in financial difficulty for the privilege of getting out of it. Worth making an informed comparison. Does the £210 include her costs for example or is that on top in which case it could easily become more than £240 likewise the £240? At £210 pcm you'd be paying £12600 over 5 years which is around 40% Confused. Creditors presumably would prefer to see some of their money rather than none.

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