IVA or bankruptcy?

[remster]

IVA or bankruptcy?

I have completed my IVA proposal and I am expecting to find out the date of my creditor's meeting over the next few days.

I'm really worried that my proposal will not be accepted by my creditors (my biggest creditor is HSBC who 44% of my debt is with), even though I am offering them 42p/£ + 50% of any overtime I earn.

On what grounds would creditors generally reject an IVA? I have been completely honest with my expenditure figures and would be leaving myself enough to live on and paying the rest into the IVA.

If my proposal is rejected by my creditors, what would be the implications of going bankrupt and what happens to my disposable income if I am declared bankrupt?

I never realised how much stress would be involved in setting up an IVA; I'm hardly sleeping at night at all and I'm just constantly worrying about debts I haven't paid whilst preparing the proposal. At the moment, I just keep trying to remind myself that it's for the best for my future... I just hope that it does turn out to be...

[Adam Davies]

Hi
You are making a reasonable proposal.
Creditors tend to reject proposals if they feel that they would get a better return under an informal debt repayment plan.
If you go bankrupt you may still have to pay over some of your income for three years but the living allowances seem higher than under an IVA so you will more than likely pay less per month than under an IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

Hi and welcome to the forum

Your offer of 42p in the £ ought to be acceptable to the creditors, so long as they can be assured this is the very best offer you can make. I am sure that your IP would not have put it forward if they felt there was a risk of failure.

The implications of bankruptcy are that your assets vest (become owned by) a Trustee who will want to sell them for the benefit of creditors. This usually involves properties, expensive cars, stocks and shares, endowment policies etc, rather than your usual household and domestic effects. You may also have to pay monthly contributions to the Trustee over a three year period, based upon affordability.

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

[JoeB]

Hi I can certainly sympathise with the stress - I feel exactly the same[V]

[Soulgrowth]

Reading Melanie's reply here, would anyone know whether in bankruptcy a car that is contract hire as part of being self-employed would be regarded as an asset, and therefore have to be returned to the contract hire company ... even if all payments were up to date?

[MelanieGiles]

A car which is subject to contract hire belongs to the contract hire company and you never gain ownership. It may have to be returned to the contract hire company under bankruptcy proceedings - do check the wording of your particular agreement.

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

[Soulgrowth]

Thanks one again Melanie