Advice, Help?

[lofty1979]

Hi guys, this is my 1st post here, having browsed for a few days, I am writing as i really don't know what to do at the moment.

My story

Myself and my soon to be ex wife entered into an IVA in October 2005, mainly due to the fact she had accrued approx £27,000 of unsecured debt, my debt was about £12,000, but at the time as she was getting letters from debt companies etc etc, i was scared that they would come and take away all of our stuff, so we entered into it, she was out of work at the time and I was a student nurse, and our original arrangement was to pay £250 per month until March 2007, where i would be 'hopefully' employed asa qualified nurse. I agreed to have the money come out of my bank account, and she would pay in whatever she could

However in 2006 we split, mainly due to the financial aspect of things, however she continued to pay in as much as she could toward the £250. In 2007 i qualified as a Nurse, however because the only job i could get was based in London, i moved away from where I used to live, and as the job was a bit better than what i would have been receiving back home, the payments went up to £300, which was fine by me, however, in mid 2007, she stopped making payments to me, and after much shouting from me she declared that she was going to go bankrupt, which left me paying £300 a month into my own IVA (i must say it was at this point i found out that it wasn't a joint IVA, but 2 seperate ones), this carried on without a hitch until December 2008, when the business i worked at was closed.

In January 2009, i received my final payslip (which was a months pay minus tax) and sent them off to my IVA company, with a letter explaining that I had now lost my job. Didn't get my payslips back but thought nothing of it, and continued to pay out the £300 a month, last month i received a Notice of Breach letter stating that they hadn't received my payslips and had 30 days to provide the information, to which i spoke with the new advisor i had been allocated and said i would get the payslips that they required as well as proof that I am in receipt of benefits and also asking them how much I owed them.

I received an email from them on the 27th, saying i owe them £5100 (and a £300 payment came out the next day), so as of the time of writing i owe £4800.

The problem i have is, I just now feel i cannot afford to continue paying into the IVA anymore, I have worked out that with my outgoings, next month would be the last time that a payment would go through before me going overdrawn and incurring a bank charge. I am trying to gather a small amount of money by selling off stuff i have accrued over the years (nothing of any great value, mainly ebaying bits and bobs of clutter)

The only bright spot is the fact i've been offered a position of work, however it's paying less than my outgoings, not including the IVA in the short term, so I'm going to be worse off in the short term, but with the bright spot of a possible pay rise to match what i was earning before I lost my job.

So what am I asking? Well, should i just give up the ghost on the IVA (as even with reduced payments, i'll still be going under) and go bankrupt (my girlfriend is adamant that I don't do this because of the stigma), also having read up on it, there is a cost of £500 attached to going bankrupt, which i obviously don't have, so am really worried about being able to go bankrupt.

I am not sleeping over this and I really don't know which way is going to be the best way forward for me, so any help/advice would be greatly appreciated.

Many thanks

Liam

[Adam Davies]

Hi Liam
You can go bankrupt if you feel that this is the best option for you, simoly stop paying into your IVA and allow it to fail, then use the saved IVA payments to fund the bankruptcy.
When you say you owe them £4800, is that arrears ? or the amount of payments left ?
If it equates to the payments left then do try to speak with your IP and agree a way forward, you are very close to the end of the IVA and could ask for a payment break until your income picks up. it is also possible that your creditors will accept payments to date as a full and final settlement of your debts.
Regards

[lofty1979]

it's £4800 that I owe to fulfil the 60 month term, at £300 per month, it ends in October 2010.

I've never thought about a payment break, I'm really annoyed that my inital set of payslips never arrived to my IP, as we could have possibly sorted this out a few months ago.

Alternatively, I i stopped my DD on the IVA, how quickly would my IP filed for bankruptcy against me, as it would take 2 months at least for my IVA payments to cover the cost of going BR.

[ivas4us]

If you go BR now then you may have to pay an IPA for 3 years which might be similar to your outstanding amount of the IVA. On top of this your credit history will be shot for a further 6 years from date of BR. A payment break might be the best way forward and then pick up the IVA again when your income picks up.

[plasticdaft]

Is there any way your girlfriend could fund a full and final offer to conclude the iva early.
If you owe £4800 perhaps she could offer £4000 to your creditors to end things now?

This would save you from going BR and having a ropey credit file for another 6 years(and possibly 36 more months of payments due to BR.

Paul

[lofty1979]

My Girfriend was a full time carer for her nan and she has just passed away so her main income stream has gone, she doesn't live with me either, so I am paying all of the bills for this property with the exception of food, which she buys for keep me going.

The only person who could help me out could be my father, but he knows nothing of this and I really don't want to involve him.

Ivas4us - I have no equity, and no assets at all (never owned a car, all debts were unsecured, namely):
HSBC: £5000 Loan, £3000 Credit Card, £1500 overdraft
Student Loans: £3000

[kallis3]

Hi,

Unless it is written into your proposal that funds would be kept aside for bankruptcy, then your IP won't fund it, and it is unlikely that the creditors will as it will cost them too much money. They will just start hassling you again.

It would take three months non payment before the IVA would fail and this would give you ample time to put money aside to pay the fees.

[ivas4us]

I appreciate what your saying but my concern is that bankruptcy may cost you just as much as what you have outstanding in the IVA. If your income does in fact increase to your previous level and therefore your disposable income is £300 per month then the OR will expect you to pay £150 a month for 3 years plus the £500+ BR fees and you are up to nearly £6,000 as oppose to £4,800 in the IVA and on top your credit history is also affected for longer. I am just concerned that you don't jump out of the frying pan and into the fire.

[lofty1979]

kallis: according to last year's report, funds have been set aside to petition for bankruptcy should the IVA fail

[kallis3]

In that case then you wouldn't have to petition yourself. Your IP should sort it out for you if the IVA fails.

[MelanieGiles]

Why not ask your IP to put forward a variation to your creditors on the basis that they accept what you have paid in to date in full and final settlement, due to your changed circumstances. They are unlikely to get any return under bankruptcy proceedings, and it is worth a try. If it does not work, then you can think about funding bankruptcy proceedings - but at least you will have tried.

[ivas4us]

Melanie, if someone goes bankrupt and the OR says the DI is to low for an IPA would they re-visit this within the 3 years if the disposable income was to rise to a sufficient level.

[MelanieGiles]

They can only reassess for an IPA whilst the bankrupt is undischarged, so this only gives a one year window. Technically, bankrupts are supposed to update the OR of any changes in their circumstances during the first year, but I suspect that many don't, and I am not sure how well this is followed up by the OR's collection agents.

[lofty1979]

Am still undecided on what to do, have had a very low day today.

Being unemployed for so long is now taking its toll, part of me hopes that my IVA fails as i'm not fussed about getting credit or a house, but another part of me want to complete it, but under the current circumstance I don't see how it's going to work.

[MelanieGiles]

So maybe bankruptcy is actually quite appealing, in that it would enable you to put all of this behind you once and for all.

Do you have any assets which would be at risk under bankrutpcy proceedings?