Declaring bankrupcy during IVA

[emma21]

Hi,

Could someone please explain the process of declaring bankrupcy and coming out of my IVA. Im currently 9 months in, and with the rising cost of living and being a single parent of two teeangers, some months i really struggle to put food on the table.

Ive read various posts some say...its straighforward to declare oneself bankrupt, just fail to make payments to the IVA, surely its not that simple ??

Please can someone tell me what happens when it goes to court? Do they look at my income and decide that on paper i CAN afford my IVA and therefore refuse the bankrupcy ???

Any insight would be helpful,

Thanks
Emma

[terry d]

good link here
http://www.mccambridgeduffy.co.uk/Bankr ... dvice.html

[Julie]

Hi Emma,

The first step is to contact your IP and explain your difficulites. There may be a way of continuing your IVA without going BR.

If you decide BR is the route for you, be aware you will probably still be expexted to make 36 payments into the BR - known as IPA. The amount of this payment depends on your income & expenditure the same as in an IVA.

In addition there will be a fee to be paid for going BR and this payable to the courts on the day. I'm not sure of the exact amount now, but it's in the region of £700 per person declaring themselves BR.

The court process is not so bad, a bit daunting perhaps. You have to complete the forms and some courts work on an appointment basis, so you should contact your local court for information.

[emma21]

Thanks Terry, but Wow, thats alot of information. Im even more confused now lol.

Emma

[terry d]

re what julie said regarding the BR and the 36 payments,im certain that payments will only be made if you have any money left after all your expenditure has been taken into concideration so example below
your income say £1,500 a month
your outgoing say £1,500 a month
you have no money left to pay into the IPA ,im sure if your £20 over at the end of your outgoings this will have to be paid into a IPA
so bankrupsy could only be for 12 months or can be earlier,like i said im all new to this so others correct me if im wrong,regards terry

[Niobe]

Any DI over £20 per month and the whole lot will be paid across for three years unless your circumstances change in that time.

You will be bankrupt for 12 months or you may get early discharge. However an IPA will continue on for three years and the BR will remain on your credit record for six years.

The court fees are currently set at £700 as Julie says.

BR can also last for longer than 12 months if you have not complied with the terms of the BR - Kerry Katona is still bankrupt after four years.

[Shining]

The advice of Julie to contact your IP in the first instance is excellent advvice. Bankruptcy can be disccussed with your IP. All the best with your decision. x

[Andre]

I have just gone through bankruptcy, If you want to know how it is in court to the interview with the receiver then just ask.

Andre

[MelanieGiles]

If you are in an IVA you will have to declare this in making your applicaton for bankruptcy and the Judge will want to know whether you could continue to make the payments and why the IVA has failed.

It is a simple Court process, but I would explore whether you could reduce your IVA payments as an alternative, before considering declaring yourself bankrupt.

[Daniel Griffiths]

Hi Emma

Even if you can afford the IVA however it seems you cannot , as you are already in an insolvency solution the court wil grant your bankruptcy, the fact you can afford an IVA does not mean you have to pay into one, and hopefully debtors will always continue to be able to chose for themselves how they remedy their indebtedness. But as your IVA is current the court may well want to see sight of a termination letter which you will get from your IP after you have discussed with him or her your situation then if you are comfortable in continuing your IVA then good luck, just remember an IVA can fail a bankruptcy over in half the time cannot and you will only ever pay into an income payments order if you can afford to, and when you cannot afford it will stop, If you are determined to get out of the IVA stop the payments and await its failure

[MelanieGiles]

I would have assumed that all of those considerations ought to have been made at the outset, and not after a lot of hard work has clearly been done to get an IVA accepted in the first place.

[Niobe]

Bear in mind as well that this thread is a few months old and we've no idea what the OP has done.

[Daniel Griffiths]

Hi Melanie

I understand your point about the due considerations to an IVA provider of entering an IVA and all the work put in by an IVA company prior to its inception, however the current thread "Fresh Start Finance" really tells it all. This unfortunate 23 year old single parent cold called at home,(Its still going on it seems) by a so thought respectable IVA provider, peddling these schemes manipulating her income to get it accepted all done in an instant including taking her card payments over the phone which she now cannot get back, I am afraid companies like this deserve no considerations whatsoever

http://www.iva.co.uk/forum/topic.asp?TO ... rt+Finance

[MelanieGiles]

The considerations I was referring to here are those the client should make before deciding on an appropriate debt solution. However I do agree with you that the post on the other thread is a disgraceful way of securing business and ought to be reported to the OFT.