advised to go bankrupt, Im confused

[Sarahlou]

Hi
Im currently on an IVA and since Jan I have been paying £1,148 until June, when my review is duw! If I was to continue paying this amount in June for the next 3 years, I will be paying them more than what I owe. Can I reduce my payments at all, as Im struggling on what I have left.

Also, lots of people are advising me to go Bankrupt and Im confused as to what to do. I would like to have a family and dont want the worry of rushing back to work, but obviously is not, I couldnt afford to pay my IVA.

[Lisa2009]

You will never pay back more than the original debt plus fees plus interest at 8% per year(i think)
Its your choice if you choose bankruptcy over your IVA. If you feel you cant maintain the payments at that level then you could ask for a reduction and see where that leads. It would involve a creditors meeting and your creditors agreeing.
You would be asked to fill in a new income and expendature to check if they agree that you are paying more than you can really afford.

[lily]

Hi

Did you go with the first IVA company you spoke to?? Were all of the options and implications explained to you??

Not sure why youre being advised to go BR, its difficult to advise without knowing about your assets how much you owe etc. I am sure that if your IVA payments are too high you should be able to negociate a reduction in them. Also your circumstances might change during the course of an IVA, its a long time, especially if youre thinking about a family. These things can be done within it and are not necessarily a reason to end it.

Perhaps you can post specifics and one of the experts may well be able to help.

[ianmillington]

As Mrs S rightly points out, whether you should come out of your IVA is a personal choice. Whether that is the right choice depends upon your overall circumstances (property, career aspirations etc). You don't indicate who it is that is advising you to go bankrupt but unless they have experience of insolvency and detailed knowledge about your personal circumstances you will be well advised to take it with a pinch of salt.

Do I read it right, your IVA is not far short of 2 years old? If so, given that in a bankruptcy any IPO/IPA will last for 3 years and the 6 year "blight" period on your credit rating will start again, you might think of asking your Supervisor whether he/she will consider promoting a variation of your IVA as you can't afford the current payments. That would potentially be a less destructive process. Given the protection you currently have as a result of the IVA it makes sense as Mrs S and Lily have suggested to investigate this before pulling the bankruptcy trigger.

Ian

[Adam Davies]

Hi
Good advice from Ian
I am always uncomfortable about reading of people who are returning 100p dividend,I just hope that a DMP was discussed in detail before an IVA was sought.Obviously it is great that people are repaying the full debt but they are also paying considerable IP fees on top of this.
Regards

[lily]

Sorry I cant see whats good about paying 100p if you cant afford the payments. Might be better negociating a DMP or directly with the creditors to save on fees.

[ianmillington]

I suppose the devil is in the detail, and I'm mindful that we don't know the background. It may be that there was some compelling reason for entering into the IVA. Or Sarahlou may simply have encountered a salesman who has kissed the blarney stone.

Whilst understanding and agreeing your concerns Andy as to how she came to be in an IVA I think we are all agreed it's probably in Sarahlou's interests to make it work if she can, as it seems quite likely she can no longer pay 100p in the £, and hopefully we have given her some food for thought.

Ian

[Adam Davies]

Hi
Agreed
Regards

[lily]

No offence intended, just concerned that the 'good 100p.' in the pound thing was sending out the wrong message, the poster had flagged this as tne problem in her request for help. I agree it would be best to make the IVA more workable, thats why I put it in my origional post to her. I am not expert in all this of course, its just an opinion.

[Sarahlou]

I was with Baines & Ernest and had a call from Blair Endesby, and they basically talked me into the IVA as they said the only other option was bankruptcy or staying in the DMP and not ever being debt free!
I know of a couple of people that are paying below £500, and I know everyones outgoings are different!
My husbands outgoings have increased leaving us even shorter every month. I think I will do as you say and contact them about re-doing my income and expenditure, although in the past they have advised that it would cost £150.
Another worry is I only get 3 days paid sick leave and have been unwell on and off since Jan and have used holiday as it would be unpaid otherwise!
I will have been on it 2 years in June, leaving another 3 years to go.

Its been friends & family rather than professionals mentioning bankruptcy.

[Adam Davies]

Hi Lily
No offence taken
If anyone can afford to then repaying 100p dividend is great,obviously I totally agree that if you can't afford to do this then you should not.
Affordability is key to any debt repayment vehicle
Regards

[luluj]

We are in similar position and by the time our "extra" payments have been included we will have paid back 100% - we opted forthe IVA route for security purposes - knowing that the interest had stopped and could not be re-started -with a DMP you always have that maybe feeling!

[MelanieGiles]

Hi Sarahlou

How much do you feel you can comfortably pay each month, given that your husband's expenditure has increased?

[zchr1]

Iwas with an IVA but have let it fail because I feeland know from the legal advice I've received, that BR is best for me. Look at those on this forum and go onto www.bankruptcyhelp.org for advice. Ask every legal professional you can. You can never have ebough advice. Ask and ask again. Be sure.

[ianmillington]

Yes, it's whatever's right. In this case from what Sarahlou says she was to a degree a "captive" client, being then passed from B&E to, well, BE.

It does seem that the original IVA was, for any number of reasons, over-ambitious. Having said that Sarahlou now has a great opportunity to get an IVA she can afford. I suspect that BE might be quite receptive to a sensible variation proposal if they knew she was prepared to walk.

Ian