Debt Questions

Hi Folks

I have in excess of £62,000 unsecured debt owed to approx 38 creditors - granted, some of these debts go back many years but they are coming back to haunt me.

I've put my head in the sand and have also hidden my debts from family & friends, but the stress is affecting my health.

Just a brief background - I have been with same employer for 11 years. My monthly disposable income is currently in the region of an average £300.

I work in sales selling new & used vans. Approx 18 months ago all was fine & I was meeting my monthly payments for current comittments - in fact my credit rating was quite good & NatWest especially threw money at me in one of their 'financial reviews' (my old debts had exceeded 6 years & been removed from credit files)

Very shortly after my loan I noticed a dramatic decrease in the amount of commision I was earning - many businesses were going into liquidation & many others considered vehicle purchase the least of their priorities.

Things have recently improved - hence some disposable income; but I am months & months in arrears & my credit rating is in tatters to say the very least.

I am getting constant calls - even at work; piles of letters and it really is getting on top of me.

I have been considering an IVA with someone like 'Debt Free Direct' in order to address not only my current debts, but my old ones also.

One of my creditors is threatening bankruptcy (CapQuest) which almost feels like a relief, and they have issued a 'statutory demand' stating in their letter that they would rather come to some arrangement - I'm thinking it's probably time I stopped ignoring my financial problems! The debt relates to a loan with an outstanding balance of just over £5,00 with Citifinancial - CapQuest have no idea whatsover regarding my £62K debt.

I rent my home through an association, I am single with no immediate family commitments - I have no assets to speak of, or any investments & the last thing I need is credit!

My job is governed by the FSA - so if my employer were to discover I was bankrupt it would seriously put my position at risk - regardless of my 11 years service.

Can anyone advise if an IVA is worth considering in my situation?

Secondly - where could I find an example of what (genuine) figures to use when completing an I & E form?

Any help would be greatly appreciated - I just want the phone to stop, the letters to subside & the headaches to go away!!

It certainly looks on the surface that an IVA may be a good option for you if your job would not be at risk with that - as some are.

You are in rented accommodation so there is no equity to worry about and often this means that bankruptcy is the quickest and cheapest way of resolving a debt issue but you have already said this would mean you lost your job.

Give National Debtline, Payplan or CCCS a call - the first can advise you on options and go through a detailed budget etc with you as can the other two - and neither charge any upfront fees so if an IVA was not accepted then you would pay them nothing and any fees are included in the monthly payment you make. These two companies also have good supervision records which means that their success rate in getting IVAs to completion is also good. The reason I say this is that if an IVA fails during the term then often you can end up back at square one so you need to be sure your income will be maintained.

Other companies also do this and if they charge no upfront fees you have nothing to lose by trying.

Just remember when you are given the options it is your choice so take your time before jumping for any solution.

Thanks Sarah

Would my employer be informed if I went into an IVA?

I know they aren't informed with Bankruptcy - but they may find out when tax code is amended.

If I thought a bankruptcy would be accepted then I would definitely petition for this and pay an IPO - but I doubt it would all go through before April? If my tax code changed for a very short period then it would probably go un-noticed. But would a judge accept a bankruptcy from someone with £300 surplus each month?

I really do need to sort this out.

Thanks for the advice.

Your employer is not informed if you go into an IVA.

If you have a real disposable income of £300 they may suggest you look at other solutions but will not stop you going bankrupt - but you would get an IPA (as of course you would negotiate with the OR). He or she is generally far more generous with allowances than creditors would be in an IVA and would only want a proportion of it - unlike in an IVA or DMP when they want the lot!

An IVA is used when you have something to protect or feel you want to pay something back as the creditors will get more in an IVA than they would in bankruptcy.

It has to be your decision!