How will it be treated?

[confussed]

I have amassed debts of approximately £42,000. This is a mixture of three Loans and about 7 Credit Cards. Until two years ago, I had two Loans, one a consolidation loan of about £15,000 and a further loan of £5,900 for a nearly new car and £2,000 on a Credit Card. Although I was repaying about £350 a month on repayments, I found this not to be a problem.

In early 2006, I then began to assist my son who was having problems with his business, financially. This was done by arranging a Loan and monies raised on Credit Cards at reasonable Balance Transfer rates. I was receiving about £600 a month from his business to repay the monies borrowed. Never missing any payments!

Unfortunately, his business has now failed, the Limited Company having just been 'wound up' and he is about to petition for his own personal Bankruptcy. It may sound stupid - but I am relieved that he has had to take these actions, as I have watched him over the past three years "flogging a dead horse" and now he can have his financial slate wiped clean - however it leves me with a problem.

Not surprisingly this has now left me in a position where I will not be able to keep the repayments going.

I had a Bankruptcy in 1992 (seems to run in the family?), at which time I had sold my half of the family home to my wife - the Mortgage was on any Interest only basis and I had to assign the Endowment policies over to my wife. We are still living together, however not in a total husband and wife relationship.

If I were to apply for an IVA, how would this affect me now - as I would not wish to go Bankrupt and I feel obliged to make every effort to repay at least part of the debts I have now left myself with.

Any advice would be much appreciated.

[confussed]

Perhaps I should have mentioned that the Loans are all unsecured.

[MelanieGiles]

Hi there confussed and welcome to the forum

So you have debts of £42k and assigned all of your interest in your property and endowment policies to your wife 15 years ago. Given the length of time since this transfer, it is possible that you may have developed another beneficial interest in your wife's property, but as you are not living in the true sense of man and wife, your wife probably has a strong case to argue that you have no interest. This will depend, of course, upon whether you have been assisting with the mortgage payments or the upkeep of the property since 1992.

An IVA will only be possible for you if you have a regular income which, after taking account of your usual household and living expenses, enables you to make realistic ongoing repayments to creditors over the next five years. Could you confirm how much you feel you could afford to pay creditors on a monthly basis so that we can advise further.

[confussed]

To keep a 'roof over my head' rather than moving elsewhere, I have been contributing at some stages £350 a month to my wife. I assume she uses a portion of it to pay the mortgage and utility bills - I just haven't asked any questions. There have been times, such as when I was ill with depression about 13 years ago, that no contribution was made at all. To be honest with my sons' problems I have been unable to make any contributions at all over the last three months, in order to keep up-to-date with all the Loan/Credit Card repayments.

I earn about £1150 clear a month, but with running costs for the car (which I depend on to get me to and from work, as I live in a rural area)and Food Bills, Clothing etc., I would estimate I would be left with about £350 a month of a surplus.

[MelanieGiles]

You could argue that you are paying your wife rent. I have a client in exactly the same situation as you and your wife, and this has been accepted unanimously by the creditors.

A payment of £350 per month, with debts of £42k ought to make a perfectly acceptable IVA, if that is the route you decide to take.

[confussed]

Thanks for your advice Melanie.

I will now be sitting down tomorrow evening and putting together a list of the Creditors and the amounts involved. Although I can obtain the amounts owing to the Credit Card companies from the "net" I will have to contact the Lenders in respect of the Personal Loans and find out the current amounts outstanding on each of the accounts.

I assume if I have three MBNA cards (1 x MBNA - 1 x Homebase MBNA - 1 x Abbey MBNA) these would be treated as one Creditor for the purposes of an IVA?

[MelanieGiles]

No - the MBNA debts are treated separately. So there are three debts due to that particular creditor.