Is an IVA bad?

[magpiecounter]

Hi, does anyone know anything about IVA? I've read that it's a good thing if you have loads of debt because it writes some off but a bad thing because you'll never get credit again afterwards and you lose all the overdraft/cards you have currently.

Any experience?

How much debt have you got? There are many over ways to deal with debt.

Whether they are good or bad depends on your circumstances. They can be good if you have property to protect. They will stop you getting credit for the next 6 years but not after then. You need independent advice from someone like step change before committing to one.

Thank you. All told I have about £10,000 of debt and that would clear it. The problem is I spend most of my income each month on charges and that makes it hard to make a dent in it. I don't have great credit though so I can't get a consolidation loan from my bank.

Do you own property? If not and you have little or no disposable income then a debt relief order may be appropriate.

But you need proper advice before proceeding, either from step change or at least by posting a full statement of income and outgoing s on the debt advice board on money saving expert.

@BarbaraofSevillle I do own my house. It's a joint mortgage with my husband. My only outgoings are food and transport. He deals with the house bills and mortgage. I do the weekly shop, presents and holidays. We don't really go on holiday but we have an expensive year as my brother got married in Greece so we had to go to that and my sister is married in three weeks in turkey that we have to go and my SIL gets married next month which is costing us about £500. Due to only working p/t for childcare arrangements it's a lot I pay out for. I've been careful to make sure I don't spend on unnecessary items like I've stopped all clothes shopping, cancelled my contact lenses, have a hair cut once every two years, no going out, I walk everywhere possible so I can save petrol. It's all the other stuff like birthday gifts for people that add up!

Have you spoken to a debt management charity? Stepchange or christians against poverty (2 Martin Lewis recommends)? They can give you the best advice if Iva would be right for you.

How much disposable income does your DH have?

If you enter into any formal debt management solution, they will expect your DH to contribute to debts that he's benefitted from or being responsible for, you won't get away with him keeping loads of disposable income while you have debts reduced that were run up paying for his DC childcare or sisters wedding. Also stop buying birthday gifts for adults. Ridiculous when you're in debt.

I think it's crazy that you are going abroad with that much debt, and buying presents, too! You need to just say you can't go and that's it.

I'd speak to debt charities like those mentioned up thread before going down the IVA route. There's a lot you can do informally with your creditors and it's quite a drastic step for what isn't a particularly large debt.

I agree with @CrotchetyQuaver. £10K is a bit trivial for an IVA. You may be better off with a DMP (Debt Management Plan) for smaller debts like that, less of a wipe-out effect. IVA's are really for people who are 1 step short of bankruptcy, with property to protect. They last for 6 years effectively, and can even bar you from some professions for life. So they're not for the faint-hearted.

Definitely get everything written down in a spreadsheet, then talk to Step Change or some other debt charity. They're very experienced at that sort of thing.

@HollowTalk it's my sisters wedding and I'm MOH and my son is Page Boy so we can't realistically miss it. The other wedding is almost as expensive and that's my SIL so again we can't miss it.

I don't buy presents for adults except my mum, dad, grandma. It's all the kids in the family that need presents buying for and it adds up. Plus parties almost each weekend means a card and small gift. We turn down a lot of them except the kids he likes (sometimes all the class get invited) but he's got quite a few friends now.

As to my husband he has, in theory, quite a bit of disposable income but that tends to disappear quite quick. Not sure what on... but he pays all the mortgage and bills so he shouldn't have to pay off my debt with what's left.

Did you have the debts before you met him? What's the cause of your debts?

No I didn't have debts. It's mainly from paying for our wedding and when I was a stay at home mum. When my maternity finishes it was costing us more than I made to pay for nursery so I stopped working. My husband gave me £100 a month in a joint bank account so I ended up using my credit card to make up the difference. I've been back to work since but again childcare costs are difficult to manage sometimes and we've paid out a lot this year for weddings, new babies in the family and my hours getting cut by half.

What madness.

@Underhiseye2 what's madness?

@magpiecounter From what you've written you and your husband need to work as a team to tackle the debt.
I don't know the details but on the surface it seems grossly unfair that you alone, rather than you and your husband, acquired the debt through paying for your wedding and living expenses from being a stay at home mum. £100 a month is a very small amount to live on. What are his earnings compared to yours? What's his thoughts on tackling the debt?

@ovenchips he earns four times as much as me but has no tax free income so a lot of it is taken away before we even see it. He has a lot of other things to pay for too so for a few months this year I've had to top up the bank account from my overdraft which has meant I'm struggling.

Unless your husband's bank balance was also at 0.00, you should not be using money you do not have instead of money he does have.

^^ What Dixie says!

I'm not surprised you're struggling. It really does sound like a very unfair money situation you are in with your husband. Unless he has a lot of debt (from family spending) himself, there seems an awful imbalance of money (and power).

The fact that he has no tax free income is not something that you need to feel badly for him about. It's because he's on decent money that it's taxed. My DH is a higher tax payer but it doesn't mean he's left with very little - he is on a good salary!

I wonder if it's worth doing a new post in relationships, not about a possible IVA but asking for views on your financial situation and your husband's. I do actually feel angry at your DH from reading your posts. It's not right.

@ovenchips after all his outgoings he doesn't have much left at all and until next May we cannot get rid of his car so we will continue to struggle. His tax is not because he earns a lot of money it's because his company gives him a company car and it's counted as "benefit in kind" which means he has no tax allowance. We were doing ok before my days were cut and now it's a struggle.

What's worrying is we are having a baby next year and my income will be even less so we need to fix this now. Luckily the baby won't cost anything except a reduction in my income but I wanted to be able to get out of debt so it wouldn't be as stressful.

@DixieFlatline his account is at zero which is why we have to borrow from my overdraft to pay bills.

I believe from a family member having an Iva that your expenses have to be approved before the repayment plan/write off is agreed. Expensive holidays, weddings or not may not be approved expenses.
It has worked for family member but is a long haul thing.
Don't know how it works when you are married.
Get proper advice OP.

Ask the experts over at Martin Lewis Money Saving Expert, Debt Free Wannabe.

@magpiecounter. I see what you are saying OP but it still doesn't sound right.

Does your DH have a similar debt to yours accrued over a similar period for similar reasons? If not, why on earth do you have the debt and he doesn't? Why do you have to pay this shortfall in your income by acquiring debt and he doesn't? It seems very wrong to accrue debt every month due to being a stay at home mum, if your husband is not. When your husband put £100 in the joint account for you each month as a stay-at-home mum, what was that supposed to cover?

I'm assuming you have finances mainly separate. Do you have sight of your husband's income and all his monthly expenditure? I mean physical evidence of it, rather than conversations about it? Also, it would be good to know what your husband says/ does about your debt - if you didn't mind sharing.

I feel for you OP. Money worries are awful and become amplified with a baby on the way. Somehow from what you write, you seem to feel the burden of this debt as yours and yours alone, when actually it isn't.