Hi, can someone please give me some advice on my financial situation? I'm currently on an IVA which is 8 months old through business debts. When my company was liquidated the IP said they would not pursue me for my directors loan account as my IVA would protect me and it wouldn't be worth their while to chase it. Now they've had a change of heart and has asked for it to be included into my IVA. It has been accepted but instead of paying £230 per month for 6 years they're adding another 12 months to the IVA.
Is it worth carrying on with it or going down the bankruptcy road?
I'm so upset by this horrible mess. Limited Liability means nothing it would seem. I've lost my business which came with my home so I'm now in rented accommodation to which my sister has paid for for the 1st 6 months as my credit file gave me a problem to find somewhere to live and I understand if I go bankrupt the landlord will be notified and I could end up homeless.
At this moment in time not waking up tomorrow morning seems appealing.
Hi Katie - I can understand it just seems an awful mess especially as it has had such an impact on all aspects of your life but don't be beaten down by it as eventually you will be the other side of this and life will be different.
Your IP company should not have really led you to believe you were protected fmr the loan if it turns out you were not but that aside what is done is done. It is up to you to decide if going BR is better for you. You are only 8 months into your term so if you were to go BR any payment you make would end before the IVA came to an end if it went full term. You need to check your tenancy agreement to see what clause is in there about bankruptcy as to whether this will affect your ability to remain in the property. Also check your contract of employment to see how it would affect your job.
If there will be advserse efects on you then it may be worth continuing with the IVA if the budget has been set to a manageable level which hopefully it has.
Let us know how you get on ansd what you decide and remember there is always someone on here if you feel really down about it all.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
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I'm at a total loss as to what to do. I never wanted to go down the road of bankruptcy but think I'm putting off the inevitable.
My lease may give me a problem as it does say on it that should the tenant become bankrupt the lease would be forfeited. I'm trying to contact the landlady direct.
Also, I work in finance but my boss who also had a business which failed came out of bankruptcy May this year so he's been really supportive. That's not to say it wouldn't give ma a problem with future employers. And I can no longer be a member of the AAT board.
To be honest, I'm worried sick.
Had I gone bankrupt in the first instance I would be nearing the discharge stage and be debt free.
I wonder why your IP advised you against including the directors loan account. Maybe they left it out thinking that they were doing you a favour by not drawing attention to it.
BR or IVA is a personal decision. I won't lie, the thought of a 7 year iva fills me with dread as it will be tough but that doesn't mean it is wrong for you if it is the best option in current circumstances. Often in this situation, it's about choosing the least worst option rather than about chosing a 'good' option.
Katie - we are here to offer you support and advice....please don't feel too low...there is a solution to your issues.
Why not make an appointment with the Citizen Advice Bureau and discuss this through with them - they have some good debt counsellors....equally you need to be aware that in Bankruptcy you may be liable to pay similar amounts each month depending on your surplus income that OR believes you have so financially you may not be better off....I believe the only difference would be after 3 years the payments would be finished, however I would think seriously about this route and the impact it will have on your employment now and in the future.
You clearly have a supportive employer now, but not knowing what is around I would ensure my decision was informed and one that I was aware of the consequences in the future.....
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
The IP who said they wouldn't claim against me for the directors loan account isn't the IP who sorted out my IVA but the company who liquidated mine.
I was told not to trust these people but foolishly I did.
I don't want to go down the route of BR but I'm told there is little difference between BR and IVA and I'm thinking I may have the chance, a better chance of a fresh start.
The truth is BR scares me to death.
May I please ask if after the 7 years of the IVA I'll be clear and free to start again it's just I've been told that my credit file will not start to improve until the last payment has been made Oct 2018 and that it will be a further 6 years until all the IVA stuff falls off the bottom of my credit file. Is this the case?
Katie, your IVA will drop off your credit file 6 years from the date it was accepted, eg,IVA accepted march 2012 drops off credit reports march 2018...
I think I'm going to ask if there is any other thing I can do to avoid the 7 years. You know I have a spreadsheet on the kitchen wall with year 1 through to year 6 and at the end of each month I mark it with a tick so that I can see it coming down and so that I can see light at the end.
I would rather try to pay slightly more that be stuck with this for another year.
I really don't know what to do with this whole horrible mess. My IP is saying stick with it but they would as they're receiving their fees each month. I also have the BR people saying you'd be better off with a fresh start but again they stand to gain.
The director's loan should always have been included in your IVA, as the liquidator of your limited company has a right to claim against you. Ask your IP why your IVA has to be extended though - was there a requirement to achieve a minimum dividend?
Tell creditors you will not accept a 7 year IVA and unless it reverts to 6 you will petition for bankruptcy. This sounds unfair to me and if you will not lose your job you should give bankruptcy serious consideration.
I'm trying to get through to my IP but they're part of the RBS group so no calls are getting through.
I understand that now but I think I trusted the liquidator. During a meeting with BWC of Stockton-on-Tees I asked about the loan account and he said to me don't worry about it. If you're entering into an IVA it's not going to be worth our time claiming.
I think because I'm paying £230 per month and the loan amount is £25k (although I've asked for proof of this it hasn't been forth coming and they now hold old the company records) they have agreed between themselves I should pay a further 12 months.
What worries me though is anything can happen in 7 years. lose my job, get divorced anything and then the IVA would surely fail and I could be back to square one. At least with BR I could be debt free in 12 months but I don't really understand it or how it works.
How can your IP be part of the RBS group? The bank do not own any IP firms so far as I am aware.
Notwithstanding the earlier comments from the liquidator, the IP acting in your IVA should have included the debt at least as a contingent creditor. Were they aware of the existence of the loan account at the time your IVA proposals were drafted? Was the loan account disputed at all?
Is the IP proposing to approach creditors with a view to varying the terms of the IVA to accomodate the loan account?
I've told them I'm not prepared to enter into another year and they're saying that is what is required but if I would prefer to speak with a colleague they can instigate BR but BR really scares me.
My job is ok but should that change I no longer wish to do management accounts as I'm not getting any younger and I don't want the stress associated with deadlines etc plus the more I earn the more they'll take so I don't think getting work will give me a problem in the future.
I'm renting my house at the moment so that may give me a problem if I go BR.
I kind of wish I wasn't a worrier by nature as I can't remember the last time I had a full nights sleep.
Oops, I was going to say when I lost my business I also lost my home as they were in the same building and under a 6 year lease which I couldn't see through so I'm in trouble there also.
