Huge Debt - What are my options please

[DebtIssues]

What will happen if I miss 1 or 2 months of payments for each creditor? or some of them - this is to generate some cash in the system which I can then possibly use to pay off some of the smaller cards and possibly starting snowballing effect.

Should I write them to say that I am in financial difficulty and can they freeze interest or should I just let the payment miss? Then I can pay again next month.

But what would be the impact e.g. if I miss one payment, will I need to pay for 2 months next month or does that one missed payment goes to the end of the period.

I am thinking if I can do this 3 times in next few months, it can possibly generate cash for me to start snowballing on the credit cards.

Please advise.

[The Tech Clerk]

www.citizensadvice.org.uk › debt-and-money › debt-solutions › what...
What an individual voluntary arrangement is - Citizens Advice







An individual voluntary arrangement (IVA) is a formal and legally binding agreement between you and your creditors to pay back your debts over a period of time

Read this from Cutizens advice, but be wary as stated above could afterv fees cost a lot more than you think (not always what it seems)

[DebtIssues]

Thanks Warwick65 and The Tech Clerk

I was reading on the forums - someone had suggested better to get into DMP after being defaulted. I did not quite understand that, can someone please explain. Does this mean that I stop paying without any communication? or keep paying something? What kind of communication should I do in such case with the creditors?

[Warwick65]

As already said, think and weigh up your options. If your wife girl a job paying say 15000, that could be 6000 a year towards the IVA and as you say you might end up paying the same as your debts. Another thing to consider is the level of fees the IVA provider charge, these can be really quite high so if for example your wife got a job paying £30000 you could end up paying more than you currently owe!

One last note of caution, an IVA provider can promise anything but ultimately it is your creditors who approve or refuse IVA proposals.

You can probably tell, I am not a fan of IVA's, therefore I can not be totally free of values, but they do work for some

[The Tech Clerk]

Think wise:- look at all options what looks straight forward may not be as has been the case when peoples circumstances changes!!!! so many down falls over the years people have found and many got to be worse off, Diana Mayhew may have experience in this area???

[DebtIssues]

Hi,

So here is the update. I have spoken to few IVA companies since I started this thread. One of them said to me that they can get me an IVA as low as £429 for 5 years. Which is very attractive and affordable. This makes IVA very attractive.

However if my wife starts working (which she is looking for), then she will have to contribute and that would meant the monthly payment could go up by upto 40% of my wife salary.

This could possibly mean a significant increase in the monthly payment. This could also mean that I am returning most of my debt at end of 5 years. Then I am thinking is there a value in IVA as if I have to pay most of it then why not go for DMP (as being suggested here as well). Less oversight on the budget and expenses and can save wife's salary for f&f offer few years down the road.

Thoughts please...

[Warwick65]

How long is a piece of string is the answer I’m afraid about when a debt gets sold. As for the ccj, if you are paying why go to the expense, if you are not, well they will look at your finances and see. Also sometimes they have made mistakes and of course it just might be seen as bad PR.

Managing debt is not an exact
science

[DebtIssues]

Thanks Warwick65

How long does it usually take the debt to be sold?

Also if I am the lender, why wouldnt I go for CCJ rather than keeping up with me?

Thank you

[Warwick65]

Hi Debtissues

I received your PM and you asked what the 'other way' was.

Well it would really start with a self managed DMP and probably sending each and every creditor a CCA request. That is probably a formality as I imagine they will all be able to fulfil it.

If it were me, my goal would be to get them to sell the debt on, to achieve this I would be offering as low a monthly payment as possible but also getting the creditors to stop adding charges and interest. The downside here is that your credit rating will be trashed for 6 years and even then will take some rebuilding. I have a good credit rating but maybe because of my low salary have problems getting credit cards below 20% APR, I have one at 19.99 and others from 22% to 29%.


If the debts are sold on you can then ask the new owner for the agreement again (another CCA request) and who knows they might not be able to provide it. Also you do risk the danger of the creditors going for a CCJ but they can usually be stopped with reasonable offers (usually but not always).

While you are making low payments you need to try and build up a 'war chest' so you can offer full and final payments at reduced rates. The problem I foresee though is that you do have a good salary, in fact you have a very good salary so creditors may be less willing to play ball- always worth a shot though.

[Warwick65]

I’m sure IVAs work for many people but remember it is a form of insolvency and if BR could impact you wife and kids getting a ‘wonderful’ blue passport I would check. With an IVA the majority of your creditors (by value) have to agree. Not sure if it’s 51% or more.

We can offer help if you follow another route.

[DebtIssues]

Yes, I am tempted to do IVA with the payment almost the same for both - IVA offers and end date clear. But there is so much negativity around it so just scared.

[Warwick65]

That sounds very affordable to me - but I am not you
I know the idea of being completely free of debt in 6 years is a lovely idea I would research IVA's and Payplan -

https://debtcamel.co.uk/debt-options/ Sara runs a very good site but it is information, I don't think she will advise, however I think she has a lot of experience.

DMPs are relatively easy to self manage although sometimes it is easier to get someone else to do the donkey work for you and set it up- some lenders are more forthcoming than others.

If you did go down the DMP route paying 650 a month you might be able to save enough to make full and final settlements on some of the debts.

It is a complicated situation and I do not want to offer advice- just give a few options.

[DebtIssues]

No judgement on my part - all I will say is that if you were to go the IVA or BR route I doubt they would give you 2K a month for expenditure even with 2 kids.

Assuming you are a British citizen I would really check up on the situation regarding your wife and kids. Immigration law is a bitch to understand. If they were born here to a British father then I do not see the problem but there again I am what some would call a snowflake- a Marxist lefty who hates this government and their hostile environment with a passion.

Based on my discussions with PayPlan and Step Change so far - PayPlan is saying I can make £600 monthly payment towards my IVA. They are not sure if I will get 5 year or 6 year IVA.

Step Change on the other hand are suggesting £650 towards DMP

[The Tech Clerk]

^ ^ ^ ^ This comment catches my eye.

How old is this MBNA credit card account?

Di

Not an Old CCA then (makes a vast difference if was)??

[Warwick65]

Hi,

Thanks for the input all.

My rent is 1000, I have budgeted that I need 3000 (including rent) every month as minimum. Which means if I keep paying I am add 400 more debt every month. This will mean that the balance wont go down fast enough. The credit cards as it stand except for Santander and PayPal are all on 0%, but they are due to end soon. I am worrying this would mean the interest will start adding and the total will become too much.

BR is not a good option for me due to my job situation. Also my wife and kids are not yet British citizens and there can be impact of my BR on their application as I understand.

Wife didnt knew till last week, but I decided to come clean. Was not easy but I am glad I did. She is not happy but is supportive.

So I cannot figure out if I should opt for DMP or IVA.

No judgement on my part - all I will say is that if you were to go the IVA or BR route I doubt they would give you 2K a month for expenditure even with 2 kids.

Assuming you are a British citizen I would really check up on the situation regarding your wife and kids. Immigration law is a bitch to understand. If they were born here to a British father then I do not see the problem but there again I am what some would call a snowflake- a Marxist lefty who hates this government and their hostile environment with a passion.