I met with an independent IP today, who said from the outset looking at my I&E he would not be able to represent me as he would not gain anything financially.
He said looking at my debt a total of 35k he imagines my creditors would want a minimum of £300 a month, my income is an average of £2750 and outgoings come to about £2600 so £150 would be about my region of payment (which would work out at about 10p/£) which the IP feels wouldn't be worth the creditors time after my IVA fees.
His second issue was my pension payments which I discussed on here the other day, I pay a minimum of 9.2% into my pension which is about £200 he said he has spoken to a lawyer and they are both of the opinion that I wouldn't be allowed to have the luxury of such a high pension payment in an IVA whereas in bankruptcy I would, or in any event it would only be an issue for a year rather than 5.
I told him about the chat I've had on here and how independent IP's may be better but he's said you may find that stepchange are firstly only going to charge you in the event of an IVA being accepted, and secondly may have more sway with the creditors. He said if stepchange can secure you a £150 payment and protect your pension to go for it but if not bankruptcy is probably a better option.
He has put me in touch with a mortgage advisor to explain the likelihood of me getting a mortgage in future in the event of either bankruptcy or an IVA. (I currently rent.)
In any event he has said write to all my creditors, ask them to freeze interest and to offer a minimal payment but for now to cancel all my minimum payments
I am quite confused now as to what to do for the best. Any suggestions or similar experiences woyld be greatly appreciated, or if anybody knows of an IP that it may now be worth be contacting please let me know.
"he's said you may find that stepchange are firstly only going to charge you in the event of an IVA being accepted," ... most reputable firms will only charge in the event that the IVA is accpeted -- if his charges you for a refused IVA then I would strongly suggest you look elsewhere in any event.
Did he work out those outgoings correctly .. or are they a stab in the dark ? Have YOU actually sat down and worked them out properly --- from my own experience, what you think these things are and what they actually are on paper are not always the same thing !
I agree you need to speak to someone else - no IP or company is going to do things for free but you should not be charged up front fees. Which person have you spoken to?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
We put together the I&E together and he said if anything I was being cautious with the amounts I put, but these were in line with what step change suggest on their website. Stepchange are calling me on Tuesday but that seems a long way off.
Hi Christine, plenty of IVA's are accepted at low dividends and £150/mth may well be accepted if its based on reasonable expenses and actual income. Many companies don't charge upfront fees and it makes no sense to pay them. But the pension payment does seem quite high and could represent an issue. I presume its voluntary.
Don't make a hasty decision. Look at all eventualities before making a decision. We are here for help.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
My figures were £32k and paying £275. I am with Stepchange, although I know folks suggest independent IPs, they were the first beacon when I was desperate and a name I had heard of, which was why I went to them. They asked me to show evidence that I was making the minimum payment I could into my pension, so I printed guidance from work and highlighted the percentage of my earnings I have to pay, then did the sums on the sheet to show my payslip corresponded to this minimum amount. It makes sense that I shouldn't be making above the basic contribution to pension over the 5yrs.
Stepchange apparently have a repayment ethic so you may be encouraged to go for an IVA over bankruptcy, if it gives a better figure to creditors. I couldn't do bankruptcy due to work, but would have probably been better off doing that if it wasn't a problem at work.
It doesn’t appear to be a work or professional registration issue. With my pay bracket for the NHS I pay 9.3% which seems a lot but is the minimum, if faced with an option of no pension payments for 5 years or bankruptcy I think bankruptcy will win but I’ve spoke with Keith and am hopeful he can help me, creditors have the option I guess of low payments (which may increase if and when my boyfriend moves in) or nothing when I go bankrupt. Bankruptcy scares me, I don’t have much in the way of assets but the idea they could take any of my possessions to off set some of the debt is a worry as to get anything meaningful I’d be left with nothing! Fingers crossed creditors will go for low payments and allow me to keep my pension.
I have no assets so will be purely contributions based, to be honest I don’t know enough about either to really know what to do for the best, I’m worried that in bankruptcy my account will be frozen and I actually won’t end up being discharged for a lot longer than a year, I’ve been told I could have to pay a lot of money for at least 3 years and my landlord and employer will be told
I have scoured my employment contract and there is no mention of either an IVA or bankruptcy affecting my role, is that enough to assume it is ok? I have a colleague who has an IVA so that obviously isn’t an issue for our employers. but I don’t for sure about bankruptcy, I don’t really want to discuss it with my manager and am not sure who best to contact in HR. I have also contacted my professional body who have confirmed having an IVA would still be ok to practice I have now gone back to check if bankruptcy would be also?
Cdawson1 wrote:I have no assets so will be purely contributions based, to be honest I don’t know enough about either to really know what to do for the best, I’m worried that in bankruptcy my account will be frozen
Your Bank account could be frozen in both an IVA or Bankruptcy so it's usually advisable to open up a 'basic' bank account with a different bank in advance as an alternative option should that happen.
and I actually won’t end up being discharged for a lot longer than a year,
Discharge from Bky is a year (as long as your discharge is not suspended for non-cooperation for example) but payments may last for 3 years (although in an IVA they could last for 5 years depnding on which terms you use and what makes the dividend attractive enough for creditors to approve it)
I’ve been told I could have to pay a lot of money for at least 3 years
Not a lot of money - just what you can afford from your disposable income. It may be more in an IVA - possibly 5 years of payments.
and my landlord and employer will be told
Your landlord would only be told if a) they were a creditor or b) you were not cooperating with your Trustee and providing them the details they need regarding your rental payments and tnancy/lease.
Your employer will not be told but it could affect your employment, depending on what you do for a living and the terms of your contract.
If you don't own any assets BKY may well be the better option for you.
