I am considering taking out an IVA.

[fudge]

Hi
I wonder if you can help me, I am considering taking out an IVA. My unsecured debts are over 50.000 owed to 7 crditors, I am currently unemployed but could use all my jsa allowace currently £60.00 per week to put towards these debts and with some help from my husband. We have a 150.000 mgt on our properly which we brought in August 2006 for 153.000 so there is little equity in our house. We have been married for 2 and a half years and have a one year old child. Should I think about setting up an IVA?

[finebridge]

Hi,
Unfortunately you are unable to enter into an IVA if you income is solely benefit driven. It may be accepted by creditors if you were to supply a household income & expenditure which showed enough surplus income.
Although there is little equity in your property at the moment, it would probably be included within your proposal to obtain a re-mortgage in year 4 of the arrangement to give creditors a better return.
From what you have said I still think an IVA could be a good option for you, maybe have a chat with an IVA expert and see what you think.
Hope this helps.
Nicola


Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[MelanieGiles]

Hi fudge

This will be tricky, as you have no income or assets to offer to creditors. It may be possible to persuade your creditors to accept ongoing payments from your husband, but I think they would view this as risky. How much do you think you could both afford to pay each month?

Bankruptcy may be a better option, as you have very little equity in your property which would be covered by "low value" rulings - ie not worth pursuing. You could also try a Debt Management Programme but, given the level of your debts, this would take some time to pay off.

Do you intend on going back to work when the little one is older? If so, what is your earning potential there? It could be that a DMP for a couple of years, followed by an IVA when you are earning again, might be a sensible solution.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[fudge]

Hi
Am truly worried about bankruptcy as this could affect my house? I am already looking for work but am wondering how much surplus income I would need for an IVA as I would obviously be paying more in child care bills would this fall under normal household expenditure? I am worried because I spoke to teh creditors this afternoon and most of them have agreed to let me work out a debt repayment plan reducing the payments but only for six months after which they have told me that my accounts will be sent to a debt collectors despite me phoning them before I defaulted they tell me i am still going to have a credit default agaisnt my name not sure of the right thing to do!

[MelanieGiles]

Can you let me have a detailed list of your creditors so I can give you some idea of the minimum payment required to fund an IVA.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[fudge]

HI
Main loan at NR rock for monthly payment of 309 for a loan that stands at 27.000 (although this is with projected interest for the lenght of the loan another 6 years) egg for a 15.000 loan set for five years, egg credit card which is 4.000, and my overdraft which is 900.00 with a 1000 limit. I have also two credit cards one for lloyds 656.00 and one with mbna which is 5000 outstanding to pay.

[finebridge]

Hi,

I can understand that bankruptcy may seem a scary option and as the property could get brought into the equation, it would seem that an IVA or as Melanie suggested a Debt management plan for a short term may be the answer.

Just as a rough guide (and this really is rough) you would be looking at around £400 per month for IVA payments with debts of £50k.

I hope this helps.

Kind Regards

Nicola


Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[MelanieGiles]

As you have a large debt with Northern Rock, who generally have a requirement for a dividend payment of 45p in the £, you may be looking at nearer to £500 per month depending on how much an IP would charge for fees.

Fudge, I have to tell you that Northern Rock are a very tricky creditor at the moment with regard to IVA's and are rejecting a lot of them. I think you firstly need to ascertain exactly how much you currently owe now - it may be a lot lower when the future interest in discounted, but this may not be possible depending upon the terms of the loan. I would then speak to Northern Rock directly to ask them if you feel they would support an IVA, and if so on what basis. If they say no, then I would look at bankrupty as the most sensible option.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[fudge]

Great thank you I will - If I do take the bankruptcy option then my name will be listed in the papers won't i (am actually trying to apply for jobs within the local policeforce at the moment) also if I do take this route what happens to my house? will this have to be sold to meet the creditors bills?

[MelanieGiles]

I have already explained the situation regarding your house. There is insufficient equity to warrant a Trustee in bankrupty commencing possession proceedings, so I would suggest that your husband makes a nominal offer of £1 to acquire your interest. This means that he will then own all of the property, but I do not believe that you will be required to sell your house.

You may encounter difficulties in seeking work with local governments or police authorities, so you might want to delay commencing bankruptcy proceedings until this has been sorted out. Try and send the creditors some form of payment in the meantime to keep the letters and phone calls at bay,

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[finebridge]

You are correct in saying your name would appear in the local paper.

We have clients at the moment in the Police that have opted for the IVA route as they felt bankruptcy would affect their career prospects. You may wish to check this out before deciding which route is best for you.

As far as your house is concerned it is the Trustee's responsibility to realise any equity that may be in the property. The Trustee will first offer your partner or a third party the opportunity to "purchase" his interest in the property; only after this avenue has been considered would he look at selling the property to obtain his share of the equity. You really should speak to a bankruptcy expert before deciding what to do.



Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[finebridge]

You are correct in saying your name would appear in the local paper.

We have clients at the moment in the Police that have opted for the IVA route as they felt bankruptcy would affect their career prospects. You may wish to check this out before deciding which route is best for you.

As far as your house is concerned it is the Trustee's responsibility to realise any equity that may be in the property. The Trustee will first offer your partner or a third party the opportunity to "purchase" his interest in the property; only after this avenue has been considered would he look at selling the property to obtain his share of the equity. You really should speak to a bankruptcy expert before deciding what to do.



Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk