conflicting information about going into an IVA

[j_g]

I have been given conflicting information about going into an IVA. I have a large amount of personal debt to repay, my partner has been helping me out financially, but has debts of his own to pay. We are in a position now where I have spent most of his savings and can't afford to continue contributing to the household bills and paying off the debt without getting further into debt.
One IP told me I could apply on my own, another has told me I can't do it without including my partner, they also said my best option was to declare myself bankrupt.

Who is right? I am very confused and vulnerable as I have little-no knowledge of IVAs / bankruptcy.

[MelanieGiles]

Hi jg and welcome to the forum

I think both of them are right in part and wrong in part - so I am probably going to confuse you even further!!!

The reality is that an IVA is an individual agreement between you and your creditors. The only reason you partner is taken into account, it to enable the IP to work out your disposable income. This is done by taking your salary and your partner's salary and working out the ratio of contribution you each make to the household income. For instance you might earn £1,000 per month, and your partner £2,000. In which case you are deemed to earn 33% of the joint income.

The same percentage is then applied to the shared household bills - ie you pay 33% of the costs, which then enables your disposable income to be calculated. So you are entering into the IVA on your own - but your partner's share of the joint income and expenditure is disclosed. Don't worry, his disposable income is his and does not need to be offered to creditors.

Can you advise me how much you owe, and what disposable income you have using the above method of calculation. Also do you own a property with equity in it? I can then advise you further.

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

[j_g]

Hi Melanie, Thank you for your reply.

I earn 45% of the household income, and we have a joint property with no equity in it. One of the IPs I talked to calculated -25,000 as the equity.

I'm not sure how to calculate the household bills as far as allowances for food, clothing etc. The monthly direct debits for bill payments totals approx £1667, which leaves me with £1179 before food, petrol, clothing, toiletries are taken out.

The minimum payment for the debts total £1200 pcm at the moment, the only reason I can pay these at the moment is because my partner has been helping me.

I appreciate any advice you can give me with this.

[MelanieGiles]

Hi again

I have a form on my website you may find useful, which details the usual categories. You will need to work out your total household expenditure so that I can assess your case further, but it looks to me as if you could maybe afford payments of around £500 per month.

How much do you owe in total - and is the £1,179 you refer to include your partner's 55% contribution or is this your remaining figure personally?

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

[j_g]

Hi Melanie, Thanks again for your help.

I have spoken to the IP who said I could do this on my own, and they explained that it is a bit more work to do it without my partner because of the contribution to household bills, but possible, which is positive.

We went through all of the expenses I can allow for, some I hadn't even considered like the optician and dentist, where I haven't been for a long time because I haven't been able to afford them.

They gave a monthly figure of £516 including their fees, which is pretty much the same amount you gave, so I am feeling a lot better about this now. They are sending out the paperwork for me to go through and sign if I am happy with it.

Thank you so much for your speedy advice and reassurance, you have been a great help to me. I think this website is fantastic, and I hope to continue using the site as I (hopefully) head towards a debt free future.

jg x

[MelanieGiles]

Hi jg

From my experience creditors do not like proposals which do not explain the partner's income and you may get rejections on this basis. But of course take your own IP's advice on this point - he will have to justify this to you at the creditors meeting if rejections ensue, as you have taken a second opinion.

Thanks for the comments re the site. They are much appreciated.

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