IVA with mortgage ?

[iwanttobebetterwithmoney]

Please can anyone shed some light on this ?
We have credit card debt probably between 10,000-15,0000 please don't judge me. I'm already judging myself and we want to better ourselves.
I've looked in to an IVA but they won't allow it as we're home owners, they say we'd have to take money out the house. We've tried this and our credits so bad they won't allow that either despite the fact that we have a good amount wrapped up in it.

Has anyone else been in the same situation ? I'm scared that we'll have to end up selling our home.

What is your income and what are your outgoings?

An IVA for £15,000 seems like a sledgehammer to crack a nut.

When you say "probably between £10,000-15,000" that rings alarm bells anyway - you need to know exactly what you owe.

Start by writing everything down. You can't make a plan if you don't have the facts straight.

@NoSquirrels do you mean it could be worse ??

Ok so there's 10,500 on one
2,800 on another soooo approx 13,300 we do have other little bits too but they're manageable.
I get approx 1400 per month but attempt another £1000 per month on agency shifts

DH about £1700 per month.

Mortgage: £540
Cars: £400
Council tax: £200 (we were behind on payments)
Phones £80
Loan £240 (yes I've been here before)
Utilities £180
Car insurance £90
Childcare £300

There are people on loads less that are probably better than us. We have frivolous natures that we're trying to reign under control. I'm working all the hours I can to try and get somewhere and end up getting nowhere :(

I would get yourself over to MoneySavingExpert's forums, take a deep breath and post on their debt free wannabee board. There are people over there who have repaid much bigger debts than yours and while the site is very 'plain speaking' they aren't judgemental and people have a huge amount of knowledge and experience. Initially I would say you don't need an IVA but you do probably need to take a long hard honest look at where this debt came from and then live very frugally for a while until you can repay it.

What are the rates on the credit cards and loans - is it worth consolidating them into a lower interest rate loan or card? Can you cut back on the cars or phones (use a cheap sim only deal, drive an old banger or share a car between you?). Is the mortgage repayment or interest only, and could you switch to interest only for a few years while you get back on your feet?

Then when you fully understand the extent of the debt including the interest owing, you need a proper budget. You need to write down all essential outgoings and assign whatever a realistic amount is for personal/discretionary spending, then assign the rest to debt repayment. Prioritise whatever has the highest interest rate, and try and negotiate a reasonable repayment plan with any creditor who is threatening action against you - then stick to it!

You seem to have an OK income with the agency shifts, but you've missed quite a lot off your outgoings in the statement above, what about clothes, holidays, hobbies, food, socialising, Christmas, DC's activities ? You can usually make savings in these areas without having to completely lose all joy in your life by being smart...

Good luck, it will be hard but worth it in the end.

Hi @maxelly thank you for your post ! it's given me plenty to think about.
You're right, I think many of our problems stem from not budgeting on things like socialising, presents, holidays etc. I think we can live more frugally than we are but it's learning to do it.

I'm so disappointed in myself. My grandfather was amazing with money. Because of him we were able to live in the house we're in. I'm coming up 30 and just hoping I can turn this around to secure a better future for DC.

I'm gonna get over to the money saving website too. Thank you :)

Frivalous spending does sound like the root cause and maybe it's a good thing that you're looking at this now when you're 'only' in £15k of credit card and 'only' on the second round of getting into trouble and wanting to borrow more to shift your debt around but kidding yourself that you're clearing it.

Plenty of people don't reach crisis desperation point until they're £40/50k in debt, so well done if you manage to break the cycle now.

IVAs are like 'bankruptcy lite' and not really a solution for people with room to cut back, which it really looks like you do have.

Your mortgage is quite low, but you are paying a lot on cars - do you need 2 cars, can either of you cycle or use public transport? Do you need cars on finance, or can you buy cheaper ones outright?

£80 pm for phones is loads, stop renewing expensive contracts with 'free' phones, go sim only and keep your old phone for more than 2 years.

Utilities is quite a lot, are you on the best deal and do you try to save energy?

Are you taking advantage of childcare help like tax free childcare etc?

Sounds like you need to start from scratch with:

www.moneysavingexpert.com/family/money-help/

Good luck, it takes a huge change in mindset to go from being a spender for a saver, but you have a reasonable income and a smallish mortgage, so you should be quite comfortable, not struggling and getting into debt.

How much do you spend on food and drink out of the house - this can be a huge cost, so one to look at by taking your own lunch and coffee to work from home.

Thanks @BarbaraofSevillle

Our cars are on finance and contract due to end next year. Our plan is to hand one back and get a cheaper car and keep the other. Sadly we do need two cars as we work in different directions at non public transport times (shift workers)
If I'm honest I'm not sure we're getting the best deals energy wise. We swapped over in January to one who then did us over and it appeared like we were paying them both so I'm reluctant to switch again. Might look into water and car insurance though as they're quite high.
Tax free childcare is also an option (is that the one where it comes directly from your wages ?)

If I was to move my mortgage on to interest only for a few years would I struggle to get it back to repayment? The future and brexit is worrying me too.

So today !
I organised a mortgage break, money going straight on to credit card. I've also calculated how much I'm owed in bank charges (using the money saving expert template) around £620 with interest added on. My husband also due about £140.
Going to discuss phones and cars with him when he gets home from work... hopefully a step in the right direction.

Thank you all for your advice !!

Sounds like a plan. I don't suppose you were ever misold PPI on the loans and credit cards were you? Another potential avenue to explore with MSE to reduce the debt.

Make sure the mortgage break money does go straight on the credit card, it's not breathing space for more spending .

If the pair of you knuckled down, you could probably be out of non mortgage debt within a couple of years? Make sure your DH is on board too though - especially if you're doing all the extra shifts - is this something he can do too?

Make sure you've written down absolutely everything you're spending - I assume your mortgage break is for a short period, and usually you can't repeat that again for a long time, so you need to maximise this to get the benefit. Have a really frugal few months and set yourselves a challenge to get as much as possible off the credit card debt.

Yes he was with the same agency previously but registration lapsed (still on the books but not active) he's got the ball rolling to start up again. We plan on putting it on the credit card then reducing our credit limit etc.
Mortgage break for two months. Not allowed another for 3 years. I'm going to look into PPI too :)