In IVA but considering bankruptcy

[Skippy]

I went BR after being in an IVA for 4 months. I was paying £459 into the IVA and I couldn't afford to live, let alone pay my way! My partner had to support me, which wasn't an option as he is a self employed handyman and his salary varies from month to month. I petitioned for my BR and all I was asked by the judge was whether I'd taken professional advice and why the IVA had failed.

Good luck whatever route you decide to take. Please keep posting to let us know how you are getting on, and ask as many questions as you need to.

Chris, of course I don't mind you advertising my blog!

[neil277]

Hi Sue.

I understand everthing now and it is best to work my normal hours for one year and forget about my debts, we all only have one life and we have to make the most of it, the banks alone for 15 months took £15000 in interest only, now i have paid another £5000 to clear debt with 5 more years remaining.

Its time to clear the debt once and for all and start building a future for my family. We rent my mothers home as this is beneficial to us as its fully furnished but we are also looking to rent for three years with the option to buy after this date.

We have just found out that you have to do a credit check £80.00 per person and two months down in advance is it best to do this before BR.

Regards.

Neil

[neil277]

Hi Sue.

I understand everthing now and it is best to work my normal hours for one year and forget about my debts, we all only have one life and we have to make the most of it, the banks alone for 15 months took £15000 in interest only, now i have paid another £5000 to clear debt with 5 more years remaining.

Its time to clear the debt once and for all and start building a future for my family. We rent my mothers home as this is beneficial to us as its fully furnished but we are also looking to rent for three years with the option to buy after this date.

We have just found out that you have to do a credit check for £80.00 per person if you want to rent a flat and then two months down in advance.

Is it best to do this before BR and is this method a waste of money

Regards.

Neil

[sjw]

yes neil, i ask about renting before or after br and i was advise to rent before as they want huge deposit if you do it after, unless you rent privately of course as no credit checks to contend with, it sounds as though you done all you can i think you deserve to see the light at the end of the tunnel good luck
sue x

[NotSoBrightSpark]

Here are a few more details relative to our situation.

total debt £68,999 (though apparently our IP tells us it's now £73,000 and something due to late something or others,I can't really remember)

My wifes personal debt 41,200
My personal debt £7,290
Joint debts £20,498

I'm not sure if this will have any influence on the best way forward for us.

Our current IVA is a joint IVA with all our income pooled together.
Our income on the IVA expenditure form includes -
My wage
My wifes incapacity benefit
Child benefit
Child tax credit
Working tax credit

My question is , which of these incomes would be accounted on our expenditure form if we went bankrupt? Would the benefits be counted?

I am just trying to weigh up what may be the best way forward,I don't want to go bankrupt if we still have to pay the same amount to the OR in bankruptcy.All that would mean is that we'd lose the house,though admittedly the IPA would be for three years rather than IVA payments for five/six.

Thats a helpful blog Skippy,lots of useful information on there.Much appreciated. [;)] Pleased things worked out.

Good luck Neil.Hope things work out for you .

[chris.g]

Right, OR's generally don't include means tested benefits HOWEVER they did include my hubby's WTC! She didn't include my CTC or CB or Maintanance but I was informed by her that she could include these if she felt the need to....
All income can be seen as income to the OR, however, as certain benefits are subject to change, your OR can review your situation to re-evaluate your I&E if and when they change.

[NotSoBrightSpark]

Thanks again Chris.

I suppose the Working Tax Credit thing makes sense because it's not a standalone benefit (if you know what I mean) I only get it because I work,if I didn't work then I wouldn't get it.So I suppose it's pooled together with wages from work.This seems fair.

I'm just trying to think of possible scenarios and my brain won't stop going round and round.
What little brain there is anyway [:D] I can still smile though.

[chris.g]

We were always assured that the OR would not touch any benefits. CAB, experts on here and hubby's accountant, he used to be self-employed. It really isn't a common practice by all accounts, I think it was just our bad luck that we got one who was a bit of a jobs worth. [:(!][:(]
My head was FULL of what if's, when, why etc. All I can say, and I got this advice from my GP, is to set a goal, and work towards that then set another and so on. My first goal was to get the forms, then to sell my car, then to rent a house and so on. It really did work as I wasn't trying to get everything sorted at once. Little by little you and your family will get there, [:)]

[NotSoBrightSpark]

Thanks Chris.Excellent advice once more.

My first goal then is to ultimately decide if bankruptcy is the best thing for us.Also to get our IP to make an offer of the equity in our property in return for a write off of our debt.I can't see it though because it's just not enough.

It is a starting point and our first goal though [;)]

[Reviva UK]

Hi Notsobrightspark

You should put all your income own from whatever source, however the OR will review each income according to your situation.

In theory many benefits are provided to give a minimum standard of living and therefore one might argue that one should not pay a contribution from these.

Best thing would be to speak to an expert and have a chat about the consequences of Br and the likely fallout plus review an I&E that would be acceptable to the OR in reviewing the case.

[NotSoBrightSpark]

Thanks for taking the time to reply Paul.

I have had a word with my wife and as I suspected she is in complete favour of bankruptcy.So I think that's what we plan to do.

Here are a few of my concerns.

Would it be best to talk this through with my IP first and would I be better off offering the equity through a property sale to my creditors in return for writing off debts before bankruptcy?

Should I ask the IP to petition for bankrputcy for us? We've missed the last three payments though two of these with permission.Before that,we made six complete payments of £400.

When would be the best time to file for bankruptcy? Should we find another property to rent first or hold on in our house and try and find the shortfall money? Would the OR be flexible at all with this bearing in mind there a children involved?

Should I open another bank account yet or wait and see if Natwest are ok with us.We have good standing with the bank for a couple of years now.We even have a small overdraft facility,which we don't use.

How would the creditors with charging orders on the property be affacted if we went bankrupt and didn't/or did sell the property? Would they try and force us to sell?

These are just a few of the questions that immediately spring to mind.I'm sure there will be many more[|)]

Thanks for listening [:)]

[chris.g]

Could you sell your house straight away? If not then you would have to keep up the IVA payments until you do to prevent it from failing which would probably result in br. [:(]

Did your ip keep any funds aside incase of br? I'm sure some in IVA's have br fees kept by their ip's incase of failure. Maybe someone can clarify this for me?

You will need to discuss br with your ip, they will advise you of what to do and when the best time would be to file.

As for renting I would try to arrange that before br, we did. We missed the mortgage and secured loan to raise the bond and 1st mths rent, the OR shouldn't have a problem with this.

Bank accounts may be frozen when you file so I suggest you open a basic account and arrange for your wages and priority payments to be set up. Co-op cashminder is a good one, our's wasn't even frozen. You can apply in branch or over the phone. There are others around who offer basic accounts to undischrged bankrupts. I very much doubt you will be allowed to keep your acc as it has an overdraft, sounds like a current acc.

One more thing, make sure your wages are safe incase the bank freezes your acc, withdraw any cash if possible to ensure you have enough money to get by until everything is sorted. [:)]

[NotSoBrightSpark]

Hi again Chris [:)]

It's doubtful we could sell the house straight away,there's siilar house down the street that's been up for sale for about a year,similar to ours and for pretty much the same money.Though ours is in good health due to the amount of work I've completed,ironically If I hadn't done the work to it there would be little if any equity and the creditors probably wouldn't be interested in it [V]

I am not sure if the IP has kept any fees aside for bankruptcy.The nominees fees are £2,644.I think we've made £2,400 worth of payments so far.

So it's best to open another account staright away after bankruptcy is filed for? This sounds right because I suppose then both could be frozen if you have them both open at the time of bankruptcy.So that would make sense.

I'm still a bit unsure as to what to do with regards to the house.Do I stay and keep up the mortgage and see what happens or do I sort something else now? That is for us to decide I reckon.It's probably going to be the hardest decison to.[B)]

Thanks again Chris,you're a diamond.[:D]

[NotSoBrightSpark]

I have thought of another question.Told you I would [:)]

We have a penalty clause on our current mortgage of around £3,000 for early release from the mortgage.I believe it's this September 08.

How might this affect the timing of possible bankruptcy? If we went bankrupt now would we still be liable for the £3,000? If we stayed in the house for a possible 12 months after bankruptcy taking us past Sept 08 how would that affect us? Being bankrupt We wouldn't be able to negotiate a further mortgage so would our mortgage lender just expect us to have left the property before mortgage end,maintaining payments up until that date?

It's all a bit confusing [:I] I have tried contacting our IP with regards to our situation but haven't been able to get hold of our supervisor yet.

Anybody help please [8)]

[Adam Davies]

Hi
You can only stay in the house for a further twelve months after bankruptcy as long as you keep up the mortgage payments.Once the twelve months have expired your OR can sell the house.
You can seek to purchase the beneficial interest in the property from the OR once bankrupt,the early redemption fee will not normally be taken into consideration,however some of the bankruptcy experts have stated that the OR can be talked into a deal over this
Regards