About to hit rock bottom! Any advice?

[hwild]

Hi

 

My other half is really finding things VERY difficult financially.

 

1) The CSA take a third of his wages off him due to the fact that where he used to live they classed as 'living with parents' as he was a lodger. Has now moved + is a private tenant so therefore considerably more outgoings. Have contacted the CSA and sent them tenancy agreement and council tax statement as proof. Haven't heard anything for 3 wks.

 

2) Also has 3 attachment of earnings taken off - total of £145 every month. Have applied to the court and waiting to see if creditors will reduce them...

 

3) Nearly got kicked out of flat as owe rent due to the above and U GUESSED IT - bank charges!

 

4) He is now close to quitting job and going on DOL as he would be better off!

 

Don't think he would be entitled to any benefits or help - don't feel that there is any way out of this - please help!

 

Thanks in advance x

[alanfromderby]

I would advise ringing the National Debtline on 0808 808 4000. They are open until 9pm and the call is free. Make sure you have all the info to hand when you call. They are totally independent.

[Seminole]

Has he considered bankruptcy. Not an easy option as it has implications but it may be a way out.

[Guest Lueeze]

Hi,

 

I know alot about the CSA,

 

Your partners circumstances do not matter to the CSA, they will take 15% of his income, and an extra 5% for arrears.

 

The only things that change the payments is if he has the child more/less, the more he see them the more reducition he gets for that.

 

The CSA will not reduce the payments, as the child should be the 1st priority and the debts after that. The CSA do not go on personal circumstances just on % income.

 

How do they take the money?

 

Have you called your local MP?

 

Sorry to ask these questions but I know the CSA inside out...

[closey]

I received really good help and advise off PayPlan....dependant on your situation they may be able to help. DO NOT take out an IVA - this is not a route anyone should ever take.

[Guest Lueeze]

Closey what is bad about an IVA? Sorry i had the impression they were good? I just need educating in that!

[Jamloo]

..

[sean frampton]

I am sorry to hear the situation.

 

I asked the CSA to do a voluntary deductions of earnings order on my wages.They then supply you with a protected level of income.It does not leave you much but these deductions have to take place before any other DOE.If you are then only left protected income after that deduction you might not have to pay any other deductions,ask your payroll personell,they stopped mine.

 

If you are assesed on the new system which is 15% for one child and 20% for two on net income this might not be an alternative.I was unfortunately on old system and they will not transfer me over and i am forced to pay 27% of my wages directly.

[hwild]

Thanks guys for all your help.

He defiinately is considering bankruptcy but not sure of the implications.

We also rang the CCCS and they said they could not do anything because if it has already been decided by the courts it is too late.

 

He pays the CSA by attachment of earnings as well.

 

Thanks again:)

[thecornflake]

Closey what is bad about an IVA? Sorry i had the impression they were good? I just need educating in that!

 

Yeah, I would be interested in this as well. We seriously considered one a while ago.

 

By the way, if you quit your job you can't get the dole very easily.

 

I did know someone a while ago who 'went mad' and smashed up loads of computers where he worked. He was diagnosed with technophobia or whatever the term is and basically gets loads of benefits as he can't work anywhere with tills, computers, etc etc. I'm not entirely sure how much of it was a [problem].

[Seminole]

I think IVAs may be a good idea for those who don't want to go bankrupt for employment reasons or where there is an asset (like a home) to protect.

 

Bankruptcy puts everything up for grabs including the family home if there is equity in it. The only way to avoid this is to get someone else to buy the bankrupt's beneficial interest and this is not always possible.

 

Other than this IVAs are a pretty dreadful option. They tie you down for a long period and if the fail you will probably be made bankrupt anyway. They are also expensive and have substantial up front fees. A large number of the "debt help" sites on the web are actually people selling IVAs. The commissions can be so large that you have to wonder whether many of the people going into IVAs are doing the right thing.

 

In many ways bankruptcy is not an easy option. It doesn't extinguish all debts (court fines and student loans are excluded for example- not sure about CSA) and it screws up your credit file for six years. You can also be subject to a Income Payment Order for three years. However, under this Government's recent relaxation of the regime many people with no assets and substantial debts are finding bankruptcy a straightforward way of wiping the slate clean and emerging debt free often in a year or less. Since the rule changes came in the numbers of personal bankruptcies in the UK has soared which has led some, including me, to believe that they have gone slightly too far.

[hwild]

Thanks Seminole.

[closey]

IVA's are often pretty short term (five years) which means payments can be pretty large.

 

All assets and liabilities must be declared and in some cases you have to release them to pay your creditors.

 

If you have a property often you have to pay extra so your home is excluded from the arrangement, other times you are expected to release equity from your property.

 

Look at http://www.payplan.com for help.

 

Good luck.

[myvesta-sean]

Hi, bankruptcy may well be a real option for him to consider if he simply does not have the means to make any substantial payments towards his creditors with no real prospect of this changing in the near future.

 

There is a really useful online video clip Q&A resource on the Not-For-Profit Myvesta site that may help him to learn more about this option. I have attached a link to the bankruptcy video clip page on the site below.

 

http://myvesta.org.uk/media/video/bankruptcy/index.html

 

It may also be worth him visiting his local CAB to obtain some face to face advice also.

 

Hope this helps!

[hwild]

Thankyou very much for your advice - i'l pass it on to him.

[thecornflake]

A while ago when I had some trouble deciding the best way to deal with my debts I checked out IFAs and found out that most of them offer a free intial consultation. As a coupld of them had started doing it, they all did to keep up.

 

As it happened, the initial session was all I needed. It's worth checkign if they still do this - 30 minutes with an IFA for free is well worth it.

[myvesta-sean]

Hi thecornflake,

Well typically an IFA will not necessarily have a good understanding of the more specialist areas of debt advice so you may find that an IFA will only be able to give more general advice about basic debt issues.

 

No harm in talking with one for free though. I would suggest that you contact a Not For Profit debt advice organisation to gain comprehensive debt advice. Some of the main non profits are Myvesta, CCCS, National Debtline and the CAB.

 

Hope this helps!

[trundlecat]

Is there any chance he could go self employed Hwild? Either go it alone or get his current employers to employ him as a contractor? I know it's a big thing but if he gets set up as a director he can pay himself a very low wage & take the rest in dividends (CSA can't touch unearned income).

[hwild]

Wow u lot are so helpful! I'm going to print this whole thread and show it too him - he is very down at the minute so i'm sure it will cheer him up! :) x

[closey]

Going back to the point of bankruptcy....my friend went down this route and was decalred bankrput about six months ago. Since then she has become a new person and looks like she has had 10 years knocked off her age! It is a term with stigma attached, but get over that and your friend may find that this is a good option for them. I think the thing to point out is there are options, they aren't alone, and there are plenty of people out there to help for free.

[sunseeker]

Hiya,

 

Bankrupcy does seem a much easier route now but I was declared bankrupt in 1993 for approx £11k to HM Customs & Excise.

 

Just paid this off last month by remortgaging house and had to pay £50k including interest and trustee fees and solicitors fees. Whilst a lot of money, it now means my house is now my own, I don't have this hanging over me any more and am nowhere near as stressed.

 

As seminole has said, could be an option for him if zero or minimal assets as then they can't take anything he may be able to come out of this in a year or two with no debt. Collecting all the debt up and getting rid of it via bankruptcy may help in the short term as long as you can live without credit though it is tough to begin with.

 

Good luck with whatever you decide and there'll always be people willing to help and give advice here if you need it

[hwild]

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