IVA - Would this impact my husband?

[Motherof1and2dogs]

I am currently considering an IVA but I am worried this will impact my husband. Does anyone know if I get an IVA will it impact my husbands credit score?

So we are married, we have 1 child and 1 on the way very soon! My debt is currently at £5350 (credit card and loans). My minimum payments are affordable but I have a loan where I need to pay off the £450 in one go and I don’t have that money right now and I am being charged 0.80% interest per day which works out about £50 until I am next paid taking that up to £500 which I do not or will not have a spare £500. Because of this I am unsure what to do and I cannot get anymore loans where I can pay monthly (due to my bad credit score).

My husband pays all the bills, if he doesn’t get commission he is literally left with 0, he has enough on his plate as it is.

It is my husbands name on the mortgage (I wasn’t added due to my credit score) so at this stage I am not too fussed about my credit score getting any worse as it is already bad. I can work on this in the future to build it up.

I am just living pay check to pay check at the minute, cost of everything going up and no pay increase at my job to meet inflation. I feel like if I get an IVA that I can at least start saving and putting money aside.

Please no judgey comments, I am just asking for some advice and looking into options and what’s the best thing to do.

Do you have any joint financial associations? Such as being named on any joint bills? If you do then it can affect his credit score.

depending on the severity you can also get a mark against your address affecting anyone who lives at the address but this is extreme and is more often used against HMOs.

you would be best speaking to someone like Stepchange who can talk you through the process fully and offer advice.

@Wolfpa all of the debts are from me personally from years ago and just in my name. I have arranged a call from Money Advice for tomorrow to see what they say. Just asking in here to see if anyone has been through a similar thing or if they know much about it. Fingers crossed I can go ahead and it doesn’t impact him 🤞

If he pays all the bills I don’t understand why you’ve never been able to start paying down a relatively small debt?

Personally I think it’s a huge breach of trust to do some sort of debt consolidation in secret without your husband knowing.

@Sofiewoo where have I said I am doing this in secret? I am finding out about an IVA first before I speak to him about it. If it’s not an option and would affect him then I wouldn’t go ahead. I am getting information first before I can go to him and tell him it won’t impact him financially.

My inheritance got us the deposit for our home so I have contributed and I pay for all food and other costs like vet bills, TV subscriptions etc.
I also said I can keep up with my minimum payments easily, but it’s the £500 one that I can’t pay off and the interest on this one is daily. I have a baby due in July so the last few months have been a bit more costly than usual. I just don’t think him clearing my debt is fair which is why I am looking into options. And then If an IVA is a good option then I can help a lot more

An IVA is generally for people who cannot afford the minimum payments on their debts, you can. You also owe less than £6000 and the fees to set up an IVA are high, it probably wouldn't be worth it for that amount of debt. More info can be found here: https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/individual-voluntary-arrangements-ivas/before-you-start-an-iva/check-if-an-iva-is-right-for-you/

You’re better off doing a debt management plan rather than an IVA- those are for very high levels of debt.
Often creditors will prefer the debt management plan option as opposed to an IVA as with an IVA they will get maybe 20p in the £1 due to the high fees.
You can apply for breathing space - this gives you a period of time to arrange your finances and make arrangements.

Don't get an IVA! They are marketed very aggressively for people for whom they're not suitable at all (like you). Like above poster says, DMP or breathing space likely suits you much better.

I've not heard of Money Advice - they re most likely a profit making company who try and sell IVAs to anyone and everyone and then take a massive cut.

Speak with Step Change (they're free), and head over to Money Saving Expert Debt free wannabe boards.

Good luck, your debt isn't that huge, you'll be fine.

@Pearlyb thank you for the advice! I will avoid IVA. It’s just this one loan that I need to clear off asap and I just can’t afford the £500 in one go and being charged interest daily is going to increase it so much! So annoying I can’t get a consolidation loan anywhere, I just don’t have the best credit score at the minute to get one

I know you say your husband pays all of the bills and is left with 0 if he gets no commission, but is this accurate? You pay family bills too (food, vets and tv subscriptions are mentioned). Have you reduced your income due to the DC and pay for childcare too?

I just find it difficult to understand why you are in debt accruing hefty interest, when your husband is potentially not struggling at all.

Yes, you may have got the debts initially, but you seem unable to pay them off due to family expenses that your DH could be helping with. How often does he earn no commission and is left with £0?

I worry that you are being unnecessarily overburdened with this, especially whilst pregnant, when it should be a joint issue that your DH could take the pressure off and help solve. (Obviously I only see the snippets that you've posted, so could be off the mark.)

Speak to one of the free companies - stepchange is one.

Could you do anything to bring in a bit of extra cash, like sell something, or do a bank account switch, etc?

Could you reduce your outgoings, like stop subscriptions for a few months or think how to reduce the food bill for a month?

Could you apply for breathing space for your credit cards for a few months,and use the money you usually would spend to your credit cards to pay off the loan?

Would the combination of doing these get you to that £500?

Longer term I suggest you start budgeting properly (again, look at money saving expert debt free wannabe boards). As you know, it's not good to live on credit cards, loans and overdrafts.

Good luck, you can sort this x

@CatsorDogsrule so he has his own debt at the moment, he actually owes my mum £2600 which he needs to prioritise over anything, he is then prioritising my debt after which will be easy for him to clear if he has a good month, but it’s this awful loan I took out 2 months ago due to an emergency and no savings left due to moving house and new baby on the way which they are now charging me interest daily so I am panicking about this one, it’s my fault that I did not read the terms properly and I thought you could pay it back as and when. So I borrowed £300 and it was £444 to pay back with interest, little did I know they are adding on 0.80% interest everyday until I pay it off. I can’t leave it and need it cleared asap which is why I thought IVA could be the only option as I have no other way. But we have to pay my mum back the money we borrowed end of August and he never really knows what he will be getting paid. But I also thought IVA just to start fresh and start saving but a few people are saying avoid and I’m not in enough debt anyway.

@Pearlyb if I live on very basic and cheap rations for a month, cancel all TV subscriptions for a month I could clear most of it off but I would be left with 0, probably no money for fuel that month but I don’t really need to go anywhere the first month baby is born anyway, I could ask for breathing space on my other credit cards which someone earlier mentioned would be my better option which I didn’t know about, this then saves me up about £150 that month. It would be possible but will be one tough month, that might be my only option and the best option. I didn’t realise an IVA was for a certain amount of debt. I reckon I might be ok. I’ll look into breathing space 100%

0.8% is minuscule - on a balance of £450 it works out at 30p a month. You must have the interest rate wrong.

It's daily

Op I took out a debt management process with Payplan they are much the same as Step change in that there are no fees so every penny goes to clearing the debt. They negotiated with my creditors to freeze interest and negotiated early settlement deals. I was left with 110,000 of debt from my marriage and with their help it was paid off in six years. I could have declared bankruptcy or had an IVA but didn't want the long term implications I would highly recommend them. Friends have used step change and would also recommend

@sleepchaser the 0.80% is added daily but I worked it out to be £3.60 per day which by July is an additional £50 roughly but my maths isn’t great! But I worked it out that I would owe around £500 by payday. What I might do is pay half off this month and half of next month

@Doggymummar wow that’s amazing that you have have the interest frozen on a pay plan, I will definitely give them a call tomorrow morning to discuss my options, it’s the interest that’s killing me. I am currently just laying minimum payments on my credit cards but then when the interest is added on each month then your sort of back to square one. But this loan charging interest daily is the killer!