Huge Debt - What are my options please

[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

[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]

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]

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.

[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.

[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]

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]

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...

[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???

[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

[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?

[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]

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.

[Roger]

The first thought is to open a bank account now with a Bank other than your Debtors. Not for borrowing but a safe place for any savings monies which otherwise might be take and set off against existing borrowing. An account that will enable standing orders direct debits etc.

I would do this now before considering anything else.

If you are making minimum payments on Credit Cards this itself will have already have been identified!
As far as I can see the majority of your debts on value would be what is know as small claims if your were to be taken to court.

Lenders can also close accounts! In other words require you to repay the whole amount with or without your defaulting.

The real deciding factor here is whether you can actually save your credit rating!!
If you can't then adopt a self protection policy towards your income placing you, your family needs first and creditors last! But your credit rating will be shot for the duration. Doesn't follow however that your wifes credit rating will be lost, and this may well be your saving route for renting , borrowing etc.

Many off Us have been where you are now by the way but with help and a non judgemental site like AAD you can like so many off US take back control of your Life. Not an easy choice but I suspect easy choices here are actually non existent in your case.

[DebtIssues]

Thanks Roger

I have already opened the safe bank account.

I have also closed the joint account between me and my wife, to keep her credit rating separate.

I am not hugely worried about credit rating now, as i have figured that it will take a hit either way. Not that it is great at the moment.

I am expecting bit more income towards end of year, so I am not sure. Do I try to keep afloat till then and then try snowballing etc.

Or should I go for DMP and not worry about default.

Confused......