I am trying to help some friends

[james_g]

Hi, I am trying to help some friends. If, after working a budget it is found that there is little or no money left for re-payments to creditors, would an IVA still go ahead, or would Bankruptcy be considered as an alternative?
If neither could go ahead, what would be the alternatives to try to get them out of trouble?, considering that there is only rented accommodation, are no assetts and two young children with disabilities linked to a single parent.

[Lisa2009]

Hi james

This would all depend on how much disposable income is left. Does your friend work or is he/she just in reciept of benefits?

How much debt does your friend have?

Bankruptcy could well be an option with no assets to lose.

Maybe you could post a few more details if you know them.

[MelanieGiles]

Hi James and welcome to the forum

If your friends have no disposable income an IBA is not an option for them, unless they have assets to sell or third party monies to offer.

From what you tell me it would appear that bankruptcy would be a far better option for them to have a fresh start clear of debt - but the applications will costs £495 each unless they are on benefits where they can save £150 of that.

Hope this helps.

[Reviva UK]

Hi James

worth speaking to one of the IP's on the forum for some professional advice - assuming you have all the info in income / expenditure & debt.

These are free discussions and are without committment but at least you will be able to check out all of the options for them.

IVA, Debt Management, or Br.

[Viki.W]

Hey james, welcome to the forum, you are in the right place for some good advice. An expert will be along shortly to help you, in my opinion, they need to contact an Insolvency Practitioner to go over all the options and look at their income and expenditure in detail. An IVA does usually need at least £200 per month to work so bankruptcy may be the only option, but please wait for an expert. Viki X

[Viki.W]

Sorry, slow typing by me there!

[aguise]

Hi James if there is no disposable income then an iva would not be an option. Bankrupcy would be a better solution if there are no assets, as long as jobs were not affected by it, should be in their contract if bankrupcy is not allowed.
Other alternatives would be a debt management plan or to ask creditors themselves to freeze interest.
Wait for other answers as you know I am not a technical expert.. A good person for them to talk to would be someone like Paul from reviva , he is around I think or can be contacted from the experts page.

Ang

[aguise]

Not a sssslloooooowwwwww as me viki.

Ang x

[james_g]

Hi Guy's, thank you so much for the help and consideration that you all have given to my question. This is a genuine attempt to help my friends, and not just a misguided "my friend question".
The person I am trying to help is on benefits, a single mom with two children with learning and attention problems. She is also on D.L.A, industrial injuries and Incapacity Benefit etc with relevent Working Tax Credits and family allowance.

She has recently just been to the local C.A.B. where she has received advice that an I.V.A. is the way to go.
Having just been informed today of the circumstances, and on completing a budget of her "incoming/Outgoing" allowances, it is obvious to me that her expendible income is greater than her income. (Whether or not official allowances agree, is a different matter).

Having realised that there is no way that she could afford to pay an average of £200.00 a month to her creditors, (along with her court debt of £150-200 a month for a debt of Council Tax) I could not see any way forward for her in this situation.

She does not get help with Rent for her privately rented house (600.00 month) as her total income (including all D.L.A. payments for herself and her children)exceeds by a few pounds what she is allowed by means testing.

I don't have all figures to hand, but could within 24/36 hours have copies of them. My problem is that on thursday 22 May she has an appointment with the C.A.B.for a review/decision on her circumstances with the figures she left with them. I am hoping to go with her in order to help her understand what is going on.

She really is at the bottom of a dark cavern, and having seen and spoken to her today, needs immediate help. She is hoping to get married within a few months, has asked for money for a wedding present and was talking about donating that money to the reciever/fund.
Having helped another couple, (also friends, (lucky me) through Bankruptcy) I now feel the need that as there is no disposable income for my friend,(that I can see) that the worries of trying to go through an I.V.A. would prove to be not only traumatic, but would prove to be unsurmountable in their case. With regards to the funding of a Bankruptcy case, they would qualify for the reduction of fees, and I would also help with the outstanding fees required for them.

I think that I am correct in my assumption that an I.V.A. is not the course for her, but that depending on the amount of debt, and number of creditors in her portfolio, that Bankruptcy seems to be the only way out of her quandry.
Many thanks to all that have replied to my question, and I hope that when published, it will at least give others viewing this service and looking for help some form of encouragement and help in at least asking the type of questions that are relevent to their own cases.

I will check back on the site tomorrow.

Many thanks

james_g

[Viki.W]

Hey James, I can't help with your query, I'm not an expert, but I'd just like to say....what a fantastic friend you are, your friend is lucky to have someone like you to look out for them. Good luck to your friend in whatever she decides to do. Viki X

[Lisa2009]

How lovely of you to help your friend the way you are.

In MOST cases, DLA is not means tested.

It does seem to me that Bankruptcy would be the far better option here as there are no assets to protect and as your friend only recieves benefits.

It would draw a line under the financial stress and enable your friend to concentrate on providing a better future for herself and her children.

Family is far more important than money afterall and as she has 2 children with special needs, her time would be best spent with her children than carrying the burden of debt around.

[MelanieGiles]

James

Your friend has been poorly advised, as an IVA will not be possible for her if her income is solely derived from benefits. Bankruptcy would seem a more sensible option for her, but I suggest that you take advice from a qualified professional in this regard. The Insolvency Service website is also a useful source of information.

[rockbottom]

HI James

what a lovely true friend you are and obviously your friends see it that way aswell or they wouldnt trust and confide in you, i hope your friend finds the right solution quickly.

Good Luck

[ianmillington]

Hi James

Based upon what you have said I can't see how the CAB have concluded an IVA is the right option. Still at least they haven't said DMP so that is something I suppose.

To get this into perspective, how much does your friend owe? Subject to it not being less than £1,000 or so, then bankruptcy certainly seems to be the option that leaps out.

You could see if your friend can get a meeting with a local IP, or a chat on the phone at least. Most of us will give some time for free, in the sure knowledge that the person we are seeing will never become a client.

Ian

[james_g]

Hi Ian, thank you very much for your kind reply. Unfortunately I only became aware of the situation yesterday and have limited knowledge of her complete circumstances to date. She has already seen someone at the local CAB. All of her paperwork is with him, and she isn't due to see him till Thursday, (when I will be going with her). Having visited her yesterday, I managed to get from her bank statements her income, and a back of the packet calculation of her expenses.

I believe that she owes something like £15,000.00, but that is only a guess on my part. I have been trying to locate a copy of what allowances are taken into consideration, when calculating her disposable income, but so far this has eluded me. It is more than likely that the CAB are using figures much lower than those that she gave me, but from what I have been able to understand, her basic needs (financially) are quite high and almost certainly are higher than her present income.

All of her income is of a Benefits source, ie, D.L.A. for her 2 children, D.L.A. for herself, (which pays for the D.L.A. car), Family Allowances, Income Support, Industrial Injuries and Working Tax Credits etc., I don't know if I have listed them all, but it should give you a good idea of how her life is funded.

For some reason (which I will later check on) she does not qualify for a council house and is having to live in rented accommodation.
She is ill herself is now unable to continue with work. She is pretty well down emotionally as far as I would like to see anyone without wanting to see them sink any lower, and it is for this reason that I am trying to do everything within my power to help her and her family.

If you can help by directing me to the webs site for any documentation helping to sort out her expenses/allowances, then this would be greatly welcomed.

Many many thanks for your help and encouragement.

Jim Glennon

Hi James

Based upon what you have said I can't see how the CAB have concluded an IVA is the right option. Still at least they haven't said DMP so that is something I suppose.

To get this into perspective, how much does your friend owe? Subject to it not being less than £1,000 or so, then bankruptcy certainly seems to be the option that leaps out.

You could see if your friend can get a meeting with a local IP, or a chat on the phone at least. Most of us will give some time for free, in the sure knowledge that the person we are seeing will never become a client.

Ian