1,826 long days, I have been officially skint. Well I was skint before that but I have a court judgement to prove it. The IVA is government legislation which whilst keeping you to a strict budget and forcing you to cut up your credit cards, allows you to reach an arrangement with all your creditors to pay back only part of what you owe. Unlike a debt management plan, both parties are bound to this so Barclays can’t suddenly decide they want all your cash tomorrow, or they send the boys round.
If you are in money strife as some of you might be after Christmas, worry not. A IVA or similar financial agreement is not a cakewalk but it is a proactive step to doing something to keep the wolves from the door. If you are thinking about taking one up, here are 11 (I like Spinal Tap) things I learnt along the way to help you sleep a little better.
- If you know you you are going to enter into the agreement and you need to buy something, shove it on the card before. If it’s a big purchase, don’t try and do it on the cheap. Two reasons for this, whatever it is will have to last you 5 years and it is the last chance you’ll have to “enjoy” spending for a while. I brought the Macbook I’m typing this on, yes I could have got a cheaper machine, but it wouldn’t have lasted me.
- Before you enter into the agreement, grab a meal out with your family and friends (or people you like!) It’s the last time you’ll do so without wondering if you really should.
- Get a decent administrator. I recommend Payplan. They do everything for you, and they are very friendly and sympathetic. They know arrangements inside and out and will assist you to keep as much money as you are allowed.
- Ask questions and be honest, when you are in £20k + debt, the time for bullshit and bravado is over. Ask any questions you may have, and above all be honest. Help them help you.
- Don’t respond to any letters or phone calls from creditors. They are trying to catch you out.
- If you didn’t before, look at bank balances and statements on a regular basis, no overdraft means you won’t ever be overdrawn, but knowing what you don’t have will save embarrassment at Tescos.
- Another way to not be embarrassed by cash running out in shops is to either, withdraw cash before shopping or use the self service checkouts. The machine won’t judge you if you can’t pay and you can just leave the stuff you can’t afford and haul ass to your car and sob uncontrollably.
- Sounds silly but pick some luxury every day items. Things that even though they are more expensive you will enjoy. For me it was Cheese and Tea, it’s amazing how much something little can brighten your day. Best not choose Caviar though eh.
- You will learn who your friends really are. Sounds cliched but it’s true. I have been very lucky to have so many people in my life who have been willing to lend a hand. I will always be humbled and grateful.
- Tell people in your life the restrictions imposed. I told everyone important to me, this helps because when your daughter asks for those new trainers and you say no, she knows it’s genuinely because you have not got the cash. Learn to say NO.
- It’s not forever. And with careful planning and the support of your administrators and your friends you will make it. Credit score zero is a wonderful place.