If I have unsecured debts

[willalwaysreply]

Hi
If I have unsecured debts of £150'000 only £25'000 equity in my property and no disposable income, what should I do with an investment of £30'000 I am currently in informal debt management plans with some of my creditors, I feel like hiding the £30'000 and going bankrupt as i can't afford the monthly repayments and it would seems as though £30'000 isn't enough for a lump sum IVA.

Thanks

[MelanieGiles]

Don't hide it! In an IVA you have to make a full and honest declaration of your financial affairs, and your IP will not welcome you hiding things from him/her. Why not realise the equity and the investment and make a full and final offer of settlement via an IVA.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[zoe]

Hi there
i agree
the other point is if you are made bankrupt the official receiver will find out anyway!!!
hope this helps

Zoe
x
Keep your chin up - everything happens for a reason!
View my blog http://zoes.blogs.iva.co.uk/

[lily]

Just an opinion

I wouldnt hide anything because at the end of the day living beyond ones means is crock and facing up to debt by entering into insolvency proceedure/s is a way of living honestly. If you hide something it will still be on your conscience.

lily

[willalwaysreply]

Hi
Thanks for comments, I cannot release equity in my home due to LTV which is currently just above 90% and also my Income which isn't high enough to remortgage (self Employed) So my position is I have no disposable income and a lump sum of £30,000 my unsecred creditors are MBNA, Barclays (via barclaycard, barclayloan & barclays Bank), Lloyds tSB, cahoot & Egg.
Having spoken to people like Thomas Charles (who never rang me back)
and a few others it would seem that the £30,000 isn't sufficent and they said neither an IVA or a DMP is suitable and left me to my own devices.

[willalwaysreply]

any help please.

I,m very very genuine

[MelanieGiles]

Given the level of your debts, and the absence of any disposable income, you probably need to consider selling your house and pooling that money and your lump sum to try and do a deal with creditors. This would provide them with a more favourable return than under bankruptcy proceedings, which of course is also an option.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[willalwaysreply]

Melanie,
Yes I have considered that but I have a wife and young children to consider and we only have a 3 bed house and I have met all my secured debts, I am self employed so in a way I can create a disposable income but my accounts will not be able to prove this and in any case accounts are history not present or future and a lot of my so called expenses i.e gas electric are taken into consideration to obtain my Net profit so some expenses will be counted twice.

help please

[MelanieGiles]

I don't understand how you can "create" a disposable income? You either have spare money or you don't, and no IP will put forward an IVA for you if you are unable to prove your income and expenditure.

In any case, your investment will need to be realised, you will need to pay over some contributions and raise equity against the property in an IVA during the final year. Given your first post, your house would be lost in a bankruptcy, as I assume that your wife would not have funds to buy out your share, so the property is at risk in any case.

How are you funding the current DMP with no disposable income?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[willalwaysreply]

Melanie,
I arranged an informal agreement with some of my creditors directly to freeze interest, charges and pay over 10yrs.

some of the debts are in my wife's name.

Re creating a disposable income.
My last set of completed accounts are 04/2006 and my Income has gone up over the last 12mths but I haven't seen the accountant to start my last yrs tax return, also I have started a 2nd business for my wife (now able to work) which is instant income but cannot be proved
but will be profitable so I can estimate figures

hence create a disposable income.

Also the term remortgage in 4 yrs to release equity, say If my income isn't sufficent to remortgage in 4 yrs okay some say self cert
but that's fraud.

By the way I only got in this mess by investing into a fraud and lost £150k overnight and stuggled to pay everyone and the spiral
gradually got worse.

look forward to a reply.

As you can see I am trying to get a decent solution

[MelanieGiles]

Hi again

In terms of calculating your current disposable income, you do not need professionally prepared accounts. You know what you are invoicing and drawing from the business, so this together with your wife's income and any benefits you are receiving, forms your total household income.

Then list out all of your business, personal and household expenditure, and deduct this from the income, making an allowance for approximately 30% against your business profits for income tax. Whatever is left forms the disposable income you may be able to offer to creditors on an ongoing basis.

When you say that income cannot be proved - you must have invoices, or bank statements which show what is being received.

Self-certified mortgages are not committing fraud, they are confirming that you believe you will be in a position to meet the repayments.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[willalwaysreply]

Melanie thanks.
But your answer on self certified mortgage is incorrect as you need to state a figure as to your earnings and they don't check, so be
placing a figure in the box is committing fraud as I would have to state a figure much higher than I acutally earn to enable a remortgage.

This carries a potential prison sentence, I am not aware of any lender who allow a self cert mortgage without placing a figure on the forms.

With regards to income/expenditure I can creat a disposable income by
not claiming certain expentiture i.e car dispreciation

Hopefully i have proved my point re disposable income

But my question still hasn't been answered (with respect) would say £30'0000 be sufficent for an IVA or should I creat a disposable income as well or both or create a disposable income for DMP

please help

[MelanieGiles]

Well I certainly wasn't suggesting that you lie on your application form!!!

Car depreciation is not an expense item which involves cash, but obviously cars will need to be replaced as they devalue. If you are thinking of entering into an IVA, you would be wise to consider whether your vehicle will last the course of an IVA - usually five years.

Which particular question do you feel has been unanswered?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[willalwaysreply]

Melanie,

The point I was stating if I depreciate my car via the tax return it reduced my net profit and if I don't it increases my net profit hence one example of creating a disposal income.

My question was asked on my last post at the bottom.

Also
Anyone else please feel free to help as I need some expert advice even Payplan told me yesterday they didn't think you could do a lump sum IVA she had to double check.

Thanks

[MelanieGiles]

I suggest that you find a local insolvency practitioner in your vicinity, where you can go for a face to face meeting to discuss your options. As a self-emloyed person, under current insolvency legislation, you will need to meet with them or an experienced member of their staff in any case if you decide to proceed with an IVA application.

From the facts you have presented, and given my experience in this profession, it does not appear that an IVA would be suitable for your creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk