Payplan

A question about : Payplan

Hiya

I've recently found out that hubby has run up debts of Ј26,000 comprising a loan from Natwest and three credit cards.

From looking at all available options and looking extensively on-line we feel that an IVA may be our way forward.

Read so many horror stories about IVA's going wrong; but notice that Payplan are both on sticky at the top and on the CAB debt leaflet so thinking of consulting with them.

What really worries us is any hidden costs or the thought of losing our property which is a separate secured loan.

Any advice or guidance gratefully received. Thanks

Best answers:

• Always difficult to advise not knowing your exact circumstances, and you have had good advice here already.
  I assume that you have exhausted more conventional solutions eg: a debt consolidation loan. This would be the least damaging to your credit file.
  You are right to thoroughly research the subject of IVAs. Please consider the ramifications before entering one - speak to a few providers to see if it is the right option for you. Remember, just like bankruptcy, it is a form of insolvency, which in turn puts all sorts of restrictions on everything from the ability to open a bank account, or even get a mobile phone on contract.
  I only went down the IVA route as I had no real option after an unexpected change in financial circumstances. That said, I am 13 Months in, and can sleep at night not worrying about debt.
  Initially seek advice from the 'charity' organisations, but don't be afraid to approach a private firm if they don't think you are eligible for an IVA.
  Google 'insolvency practitioner reviews' and contact a couple of well-reviewed Insolvency Practitioners. Contrary to what some might have you believe, many don't charge you anything upfront, and their fees would be paid out of your monthly IVA payment (and agreed by your creditors). In fact, even charity organisations such as 'Stepchange' farm out many of their IVA customers to Grant Thornton and PayPlan.
  The following link to Stepchange, gives a brief 'iva pros & cons' guide though which is a useful starting point:
  https://www.stepchange.org/Debtinform...osandcons.aspx
  Google 'Straightforward Consumer IVA protocol' which the vast majority of new IVAs are compliant with. This should direct you to a link to download the pdf document. Well worth a read.
  Similarly, you will have to work out your income and expenditure. Whatever is left over is your IVA payment. Regarding what is deemed 'reasonable' expenditure, all IVA companies that I have come across, use the Stepchange budget Guidelines, which can be viewed/downloaded here:
  https://docs.google.com/file/d/0B7LabJy69BP1M0gxeHQ1SDFiN1E/edit?pli=1
  It is well worth a read, as it covers every form of expenditure, right the way down to allowances for hairdressing, kid's school dinners, meals at work, even hobbies etc if so required.
  If you are careful to correctly record your income and expenditure, your IVA payment should be set at quite an affordable level. I have come across people who underestimate their expenditure (in the mistaken belief that their IVA will more likely be accepted), and subsequently have difficulty from day one. Don't fall into that trap.
  Equity release (if applicable): Bear in mind that, however unlikely it is currently likely to happen, most IVA's require homeowners to (subject to a property valuation in Month 54 of the IVA), attempt to release equity via remortgage / secured loan up to 85% LTV to increase creditor dividend up to 100p in the Ј. (Subject to the resulting payment being max. 50% of you current IVA payment for affordability reasons). For most, equity release is not possible, so your IVA goes on for a 6th Year instead (which usually works out a lot cheaper). But who knows what the economic climate will be like in 4-5 Years time?
  Bank Accounts: If any of your debts are with your existing bank, you need to open a full current account with a non-creditor institution now! (less overdraft of course). Best not to reveal that you are considering an IVA though (no requirement to volunteer such information).
  Important to do this before you are on the insolvency register, as you will then probably be limited to a handful of basic accounts.
  DO NOT switch to HSBC/First Direct: when they find you on the insolvency register, (which they will), they will make you close your account.
  Enough for starters!!!
  You have options though. Good luck with whatever you decide to do.
• Have you looked into a self managed debt management plan who are the cards with ? Can you afford token payments look on my money steps in December i looked into getting an IVA glad i never now i between us started with Ј28000 just under. Credit card companies do like to try help. My interest and charges all frozen and i just have to speak with them every 3 months.
• Thank you all so much for your help - is so reassuring to speak to people who have been in a similar situation and can give me what all the IVA companies can't give me - first hand experience.
  I've spent the morning printing and googling the amazing amount of knowledge you have kindly shared with me. Unfortunately as i suffer depression and obviously whats gone on has had a knock on effect to my illness; my ability to absorb information and concentrate is near on impossible; but I know when hubby gets in from work I have a pile of stuff I've printed off and he will be better at being able to absorb the information.
  Something I did read on Stepchanges website with the pros and cons is that as "an IVA is a legal process - it may affect the terms of your employment or any hire purchase arrangements you have". Obviously not bothered about the hire purchase agreement; but alarmed that it could impact on hubby's employment??
  Am I right in understanding that our SOA would only include hubby's side of things as debt is in his name and from what hubby was saying it just has to show hubby is only paying 50% of the bills???
• I would tell him to do a soa that shows him paying all bills with a small contribution from you towards as additional income.
  I have been on reduced payment since march with virgin and they have just settled for 22% with a default on my account and in process of trying to sort out others. I would make token payments my money steps is a good site.
  With what you can save through making token payments you can save toward f&f
• Why not post a SOA on debt free wanabee forum and ask others for advice loads of knowledgeable people on there.
• I got in touch with virgin they agreed to freeze interest and i paid a small amount of my minimum think i actually paid half i then got in touch asked if they would accept a f&f full and final settlement (did this last week) They agreed have to pay it before oct.
  My money steps gives you all options. I self manage and seem to be doing ok. I dont pay interest but you have to speak to the companies.
• before agreeing to settle it would of taken me around 7 years to clear.
• yeah a lot lower. I think if wasnt for DFW board i would still be racking up more and more debt.
• Don't rule out a DMP, especially if it is determined that your Husbands disposable income (what would be his IVA payment), is high, and you can pay of the debt within say 6-7 Years. My only issue with DMP's is that the informal nature of the agreement means that there is no guarantee that your husbands creditors will freeze interest, and there is nothing to stop his creditors pursuing him for the full debt plus interest etc. ant any time.
  Also, be aware that the charity organisations are creditor-funded. They may therefore (as they did with me), suggest a DMP as the best way forward. I disagreed that a 15-Year DMP was the way to go!!! Best for the creditors? yes - a 100% return. Best for me? No.
  Seems to be no such thing as impartiality in this game: The IVA firms (especially the unscrupulous ones) will flog you an IVA at the drop of a hat. Also, I cynically believe that the Charities are looking out for their sponsors when suggesting DMPs in some cases.
  Whilst the IVA will be in your Husbands name, in calculating affordability, you will have to declare your income to the IVA company, as they will quite rightly expect you to make a pro-rata contribution to household bills etc. This will be a factor in determining his payments.
  Yes, in most cases, a proportion of his debt is 'written off' after the IVA, but again, that is not a dead cert: All depends on how your financial circumstances change over the IVA term - if you/husband get job promotions etc. with significant income increases, your IVA payment goes up. BE AWARE: your husband owes 100% of his debt until the IVA is concluded after year 5 or 6. Any windfalls, PPI claims etc. will normally be put in the IVA pot.
  Like you say: lots of thinking to do on your/your husband's part. Do not commit to the IVA until you are certain it is right for you.
• You are welcome on the on the dla note i was told by one company wouldnt come into consideration but another company disagreed.
  how many creditors ?
  I was paying 450 per month before i said no i cant pay now pay 100. Rest i save i pay off car tax etc outright now rather than plastic and have had odd weekend away.