bankruptcy would have been a better option?

[lynneg]

My husband and I (age 33 &30 respectively) were £60k in debt and enterted into an IVA in July 2006. Although we took considerable advice before signing up to the agreement, we are now having doubts as to whether filing for bankruptcy would have been a better option. Credit referencing agencies don't seem to make much of a distinction between IVA and bankruptcy and we have no assets except for my car which I need to do my job. What also concerns us is the fact that although we are (just about) managing to keep our heads above water at the moment, our IVA payments will increase in line with our salaries- therefore we have no chance of achieving a more comfortable lifestyle until the IVA is completed.
Please could you offer some advice on this as there is so much conflicting information out there! Many thanks

[MelanieGiles]

Hi lynneg and welcome to the forum

I assume that all of the options were appropriately explained to you at the time you entered into your IVA, so why the second thoughts now? There is little distinction between IVA and bankruptcy at the credit scoring agencies to be frank, but your credit rating ought to be of low priority to you at a time when your are paying back debts. It will be restored over time.

I am afraid that when you owe money that you can no longer afford to repay, your creditors are not really interested in you having a better lifestyle, although there does have to be some incentive to soldier on with the payments. Have you reassessed your income to make sure that you are properly allowing for all expenditure?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[hara]

As melanie giles has indicated,Credit rating should be the last thing on your mind.In a society where credit is easy we worry about credit rating. May be we should look at Japanese who I think have a high savings history and lend money to others, even to mighty America.

It may be better to save and buy,so that no unplseant elements would be making our lives a misery.

Credit rating may come in to equation only for large purchases (car) or may be when you want obtain a mortgage,which are an occasional incidents in our lives.

hara.