Stopped burying my head. Should i look at an IVA?

[kota]

Hi All,

I'm 32 and starting a new chapter in my life. I've NEVER had credit. Abused it as soon as I turned 18 and never got back on the right foot. I was in a high paying sales role which included a company card. I managed to pick up a drug habit and subsequently abused this privilege. I'm 18 months clean now but that's another story. I'm now in a more blue collar role, whilst the money is substantially less (£13 p/h) I'm much happier in life.

I've managed to create quite a trail of destruction with my finances and i want to one day get a mortgage and not worry about bailiffs. I've started looking at IVA's. My current monthly budgets looks like this:

Income: £1,800 p/m

Rent & Household Bills (with my partner) - £550 p/m

Food - £200 p/m

Child Maintenance - £260 p/m

Phone - £25 p/m

Petrol - £100 p/m

My clear score credit rating is... 0 I have the following outstanding:

Borrowing and Utility Accounts - (British Gas, Lantern Debt Recovery etc) - 7 Accounts totaling £3,438

Overdraft - 1 overdraft (unarranged) £300

CCJs - (This is where a couple of silly ones and the aforementioned company card come into play) - 3 CCJ's totaling £8,675

Ultimately, i need some advice on how to sort this mess out once and for all and i was hoping i could get some help. I've not updated my address since i moved in April 22. I feel like a 2nd rate citizen and i just want to lead a normal life without the worry. The drugs used to help me ignore issues like this but the days of burying my head are gone. Should i look at an IVA?

Thanks in advance.

All above figures are GBP but my PC is set to US and i don't know how to change it back!

 

[laurapalooza]

@kota In general, I'd always question someone asking about an IVA whether bankruptcy, a debt relief order or a debt management plan would be preferable?

IVAs are a type of formal insolvency (just like bankruptcy), but they have the additional aspects of fees to the insolvency provider (hence why they're pushed heavily), plus the fact your 75% of your creditors need to agree to it.

The typical "good reason" to take on an IVA is to try and protect assets such as your home, but you mention a mortgage as a future plan, not a current thing you have. Other reasons can be if bankruptcy bars you from your profession or your tenancy is at risk.

Adding up your income and expenditure - I'd have thought a debt management plan through the likes of StepChange is going to be your best bet.

Assuming that the £550 is what you pay for rent and bills, this still leaves you with £665 per month which could be put towards your debt (assuming figures are all accurate.)

With a debt management plan, you should be in a reasonable position to negotiate the interest to be frozen, so the debts could be satisfied within the next 18 months or so.

I don't see insolvency of any form being a good move here, let alone the most expensive type of formal insolvency.

Speak to StepChange about a debt management plan, and ensure your creditors know how to contact you. If you engage and they can see a clear path to you paying your debts - they're far less likely to have bailiffs take your car one morning leaving you unable to get to work etc.

 

[kota]

@laurapalooza !thanks

Honestly, that’s everything I could have asked for in one comment. I’ll get on too step change and go from there. Really appreciate you taking the time to help. I had looked at my income in that sense and divided my spare cash by the amount of debt and got a similar answer.

 

[dichthuatmid]

@kota Looking at your situation, if the £665 is "real" then you could really buckle down and get back on track - with or without your creditors agreeing. That obviously isn't going to be pretty - it means no non-essential spending - but it's definitely doable.

 

[kota]

@dichthuatmid Yeah tbh until I started going through it I didn’t realise how much I could bang away. I’ve just had a divorce and lost pretty much everything so I do need a few quid for clothes and other bits but £400 a month is easily doable if I buckle down. Sometimes I guess it helps to actually write these things down and see them.

 

[dichthuatmid]

@kota I would strongly recommend adding everything up today, and then going as hard as you can for a month - meal prep, avoiding any additional spending - and seeing where you end up. If it's clothes this month it will be something else next month... Then Christmas... Etc.

ETA: it's important to be precise with the numbers, to tie it down and avoid mentally rounding things in your favour.

 

[kota]

@dichthuatmid I’m with you man, appreciate that. I’ll keep the post updated. Thanks for your advice.

 

[julia736]

@kota How old are the CCJs and are they actually chasing them?

 

[kota]

@julia736 They’re from June last year roughly. Not chasing at present but only because I haven’t updated my address anywhere as I have moved.

 

[julia736]

@kota Well, you should probably update your address with your banks, then they'll advise the credit referencing agencies - I imagine you'll soon start getting letters from your creditors.

 

[kota]

@julia736 I have all the info from them via my clearscore app. Bank with Nationwide who are the only ones who have my new address. I’m really seeking advice on weather I should be looking at an IVA or not?

 

[resjudicata]

@kota squeal chop rude dazzling continue automatic tan middle exultant relieved

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