Joint IVA

[stewpots]

I have about £85,000 of debt credit cards /loans etc and could probably only afford 15p in the £1 in paying it back (5yrs). I make just token payments at present

 

I lost my job was out of work for 10 months, my new job pays 35% of my previous salary (been there 6 months).

 

My partner has over £40,000 of debt but has kept up every payment (buts it’s more 50% of her take home pay)

 

She can’t ‘make these payments’ with out me paying council tax and all other direct debits at present (which I can do as only making token payments to my creditors e.g £1 a month).

 

Once in an IVA I won’t be able to do that

 

The IP wants us to go down a joint IVA route

 

They say creditors won’t accept my partner making £900 of payments to her creditors a month

 

Put the whole thing together

 

BUT if she is then liable for my debt it would be non starter

 

She has elderly mum and would inherit a lot of money and there is no way she would have that to go and pay off my debt

 

Any advice ?

 

We are only paying interest only on a massive mortgage at present and both nearer 50 then 40 so whole thing needs sorting

 

I DON’T know wether I just keep making token payments to see if I ever get back into a job (salary wise) as before. Most of my creditors are accepting token payments at present the phone calls have largely gone away although this wont sort my partners problems out or my own.

 

If we could LEGALLY keep our debts seperate and then sort out this mess that would be ideal.

 

Any help greatly received

[loobyloo85]

Hi

 

The IVA is an individual voluntary arrangement, so it wouldn't be a joint plan as such, it would be two arrangements using the same household income and expenditure.

With you making an offer of around 15p in the £, an IVA is definately a good option for you. With regards to your wife also doing an IVA, she does have enough debt, but you will need to sit down and look through your household income and expenditure to see if you have sufficient surplus (disposable income) between you for you to both pay into individual arrangements.

You will need to include all income, and then excluding any unsecured creditor payments, write down all expenses for the both of you, including any children you may have, for example, housekeeping, clothing, footwear, travel costs, bills, etc. If you then have at least £100 each between you to spare at the end of the month, then you could both possibly look at doing two IVAs alongside eachother, and have both of your debts written off after 5 years.

If your wife does receive an inheritance, from her elderley mum, and has already entered into an IVA, this is not a problem. She would need to declare that she has received this money, and then could offer a full and final payment to her IVA to clear her debts in under the 5 year period.

The problem with making token payments is that your debt doesnt clear that much at all, and the amount of interest charged will be very high.

 

Another option, if your wife does not want to entr into an IVA, is for her to enter into a debt management plan alongside your IVA. This way, she could make monthly payments she can afford, whcih do not have to be her contractual payments. the debt management company would then disctribute these payments to all creditors each month. You can as above continue to pay into yoru IVA whilst she is doing this, and ocne your IVA has been completed, after 5 years, you will both be able to put more into her DMP pot to clear her debt quicker. If she receives the inheritance in a DMP, it would be the same thign in that she can propose a full and final offer to her creditors to clear debts in full.

 

I hope this helps. I would be interested to hear how you get on or what you decide to do x

[stewpots]

Hi

 

The IVA is an individual voluntary arrangement, so it wouldn't be a joint plan as such, it would be two arrangements using the same household income and expenditure.

With you making an offer of around 15p in the £, an IVA is definately a good option for you. With regards to your wife also doing an IVA, she does have enough debt, but you will need to sit down and look through your household income and expenditure to see if you have sufficient surplus (disposable income) between you for you to both pay into individual arrangements.

You will need to include all income, and then excluding any unsecured creditor payments, write down all expenses for the both of you, including any children you may have, for example, housekeeping, clothing, footwear, travel costs, bills, etc. If you then have at least £100 each between you to spare at the end of the month, then you could both possibly look at doing two IVAs alongside eachother, and have both of your debts written off after 5 years.

If your wife does receive an inheritance, from her elderley mum, and has already entered into an IVA, this is not a problem. She would need to declare that she has received this money, and then could offer a full and final payment to her IVA to clear her debts in under the 5 year period.

The problem with making token payments is that your debt doesnt clear that much at all, and the amount of interest charged will be very high.

 

Another option, if your wife does not want to entr into an IVA, is for her to enter into a debt management plan alongside your IVA. This way, she could make monthly payments she can afford, whcih do not have to be her contractual payments. the debt management company would then disctribute these payments to all creditors each month. You can as above continue to pay into yoru IVA whilst she is doing this, and ocne your IVA has been completed, after 5 years, you will both be able to put more into her DMP pot to clear her debt quicker. If she receives the inheritance in a DMP, it would be the same thign in that she can propose a full and final offer to her creditors to clear debts in full.

 

I hope this helps. I would be interested to hear how you get on or what you decide to do x

 

Thanks for this, her biggest concern is she would be legally /contractually obliged to pay my debt when she gets this inheritance (her previous partner took her for £50,000)

 

She also has a problem of burying her head in the sand so comments like when I get my 3% pay raise and/or I might get a small bonus don’t help

 

With regards to my offer 15p, the IP is saying that won’t be accepted so it has to be joint or my offer much more (my income wont support much more)

 

My original proposal was £250ish a month for my IVA but partner is paying £900 to service her debt, she earns just bit more then me

 

 

They have all our income bank statements payment plans etc

 

The initial idea was solely my IVA although the reality is IF I start paying for an IVA (£450 a month which i cant really afford) she can’t continue to pay for her debts (I am at present paying towards them as I am only making token payments to my creditors)

A big mess

[loobyloo85]

I would suggest speaking with other IVA companies like Payplan, as I know that the lower offer they put forward is 10%, so I cannot understand why the IP you have been speaking to is saying it will not be accepted

Why dont you consider going forward with the IVA, and then your wife making reduced payments to her creditors in a DMP. This way you will be able to do the IVA, and she will be clearing her debt in a DMP? x

[stewpots]

I would suggest speaking with other IVA companies like Payplan, as I know that the lower offer they put forward is 10%, so I cannot understand why the IP you have been speaking to is saying it will not be accepted

Why dont you consider going forward with the IVA, and then your wife making reduced payments to her creditors in a DMP. This way you will be able to do the IVA, and she will be clearing her debt in a DMP? x

 

Thanks for this , they have now gone to £571 a month , some how inflating my salary by 10% and making figures up !

 

The detailed spreadsheet I sent over has been ignored

 

Its still all around joint income although I want a sole IVA.

 

I know they have to take into account household expenditure but its getting silly.

[loobyloo85]

Unfortunately the creditors are not accepting a lot of IVA proposals with single income and expenditure (their criteria changes all of the time). You will be told that you could try an IVA if you are adamant of using a sole Income and expenditure, but it is likely not to be accepted by your creditors. You would need to put forward a joint income and expenditure (where your partners income would be cancelled out by most of her expenditure), or at least showing your partners contribution towards half of the household bills, with your other sole expenses.

Dont forget also that all DMPs and IVA companies have certain guidelines to adhere to that the creditors require you to stick to. This is to ensure that you are paying back as much as you can afford within the given time span of the plan, and to give your IVA the best chance of being accepted.x

[stewpots]

Thanks for this , they have now gone to £571 a month , some how inflating my salary by 10% and making figures up !

 

The detailed spreadsheet I sent over has been ignored

 

Its still all around joint income although I want a sole IVA.

 

I know they have to take into account household expenditure but its getting silly.

 

Guess what they have come back with new figures

 

Guess what their exactly the same as the ones before (with an inflated salary)

 

Of course it occurs to me their a business

 

Not really interested in you spending 3hrs doing on a detailed budget, they probably dont care if you fail your IVA

 

I dont really want to find someone else supply 3 months of bank statements copies of all credit cards etc etc

 

will keep the world updated

 

My orginal advisor said it would be around £400 a month

[loobyloo85]

Hi

 

So, has Payplan now said that you should be proposing to pay £400. Are you comfortable in affording this each month?

As in my previous post, you can try an IVA based on your sole details, but they are likely to ask for a joint income and expenditure to show a realistic reflection of what is coming in and going out of the household.

I hope you manage to get this sorted, if I can be of any more help at all, please contact me

[stewpots]

Hi

 

So, has Payplan now said that you should be proposing to pay £400. Are you comfortable in affording this each month?

As in my previous post, you can try an IVA based on your sole details, but they are likely to ask for a joint income and expenditure to show a realistic reflection of what is coming in and going out of the household.

I hope you manage to get this sorted, if I can be of any more help at all, please contact me

 

Running up date

The IP wasn’t aware we had £3,600 mortgage arrears.

To be honest after a bit of hassle with the mortgage company we have had no pressure from them to start paying the arrears back.

Its represents just over 1% of the total mortgage.

I then suggested I would pay back the arrears £100 a month (i.e. over 3yrs) to the IP and he immediately suggested that would reduce the IVA by £100 a month.

I might take this £479 to IVA and £100 to mortgage arrears .

I can’t really afford this long term at present but know I could short term (first 10 months) and then hope things change.

I worked out I had more then £85,000 of debt this would mean paying back 34p on the £1 is that excessive? (That doesn’t account for their fees, so what I pay back would be less).

I am just fed up with calls and unceratinity

Was out of work 10 months but have been back in work 7 months now and there is potential consultancy work.

Edited June 3, 2010 by stewpots

[loobyloo85]

Hi there, thanks for the update.

If you have mortgage arrears, it is strongly advised that in the IVA budget, there is an allowance for you to pay these off. As soon as they are cleared your IVA payment can then increase by this amount. Dont forget that an IVA is reviewed annually, so any changes in income and expenses would be taken into account.

34% is a very good offer and is not classed excessive. Dependant on which IP you go to, this should include their fees, however ensure that there are no hidden/upfront costs, as many IVA companies charge these. As above, there are IVA companies such as Payplan who's fees are built in within the IVA, meaning there are no up front costs and you do not need to pay anything other than your monthly payment.

[stewpots]

Hi there, thanks for the update.

If you have mortgage arrears, it is strongly advised that in the IVA budget, there is an allowance for you to pay these off. As soon as they are cleared your IVA payment can then increase by this amount. Dont forget that an IVA is reviewed annually, so any changes in income and expenses would be taken into account.

34% is a very good offer and is not classed excessive. Dependant on which IP you go to, this should include their fees, however ensure that there are no hidden/upfront costs, as many IVA companies charge these. As above, there are IVA companies such as Payplan who's fees are built in within the IVA, meaning there are no up front costs and you do not need to pay anything other than your monthly payment.

 

 

Well after finally sorting out all the paper work my ‘hearing’ is 2nd July.

 

The IP has clearly show all their fees and they account to about a 1/3rd of the total.

 

They have also reduced the IVA for the first 18 months so I can pay back the mortgage arrears.

 

The creditors if this is accepted will only get about 22p in the pound (its £88,000 of of debt not £85,000).

 

The IP shows the Bankruptcy route would give them about 6p.

 

I get the impression with the 1000s they get it like a well oiled factory process.

 

I am told I should be available (via phone on 2nd July).

 

I was impressed with the IP documentation which runs to 30 pages, everything is spelt out in plain English including my obligation, what happens if I was made redundant etc.

 

The MBNA had offered to close account for a one off 8.5k (debt cira £27k with them) I of course don’t have 8.5k

[loobyloo85]

Hi Stewpots, thats great to hear it is all going to plan. 22% is a really good offer, especially compared to 6% if you were to go bankrupt, and the creditors will see this. The creditors will try to get you on board with them especially if they know you are setting up an IVA, they will want to try and either set up an arrangement for you themselves or chase for payment, while they still can.

Well good luck, and let me know how you get on

[stewpots]

Hi Stewpots, thats great to hear it is all going to plan. 22% is a really good offer, especially compared to 6% if you were to go bankrupt, and the creditors will see this. The creditors will try to get you on board with them especially if they know you are setting up an IVA, they will want to try and either set up an arrangement for you themselves or chase for payment, while they still can.

Well good luck, and let me know how you get on

Well this has all gone through now although the title of the thread is a bit misleading

 

Went for a sole IVA in the end.

 

First payment went out of bank account this month

 

Although Northern Rick didn’t go for it as they have under 25% of the debt so their legally bound.

 

No phone calls letters since (guess hearing from others a bit lucky there)

 

So now just 6yrs of payments

 

I think the first 16 months go to the IP !

Interesting article (your not alone !)

http://www.insolvencynews.com/article/show/140-debtors-apply-for-IVAs-every-day

[loobyloo85]

Thats brilliant Stewpots, I am really pleased for you. Northern Rock are so difficult, but at least your other creditors managed to outvote them. Yes, with Payplan, you make your monthly payment as proposed for the 5 years, but the creditors agree to forego the first 6 months or so's payments, to cover Payplan's fees. This is much better than having to faulk out upfront costs, or any costs if not accepted/fails. Your monthly payment would then go directly to your creditors for the remainder of your arrangement.

The creditors would have been fully informed of your IVA being successful - sometimes the message takes a while to filter down, so you can get some creditors still sending letters, but this would wear off, and at the end of the day, they cannot do anything

Good luck and best wishes to your future of being debt free xx