Really confused...

[chimp]

I have been looking into applying for an IVA, i owe approx £55K however the proposal has come back and suggests i pay £800 + if both my wifes and my income are taken ino account.. and £500 + if just mine, however they did say that they didn't feel that it would get accepted on just my income.

I am a bit confused as i thought the IVA was a way to pay back debt and still give you a chance to live..

My Situation..

I earn £1550 a month
I pay £340 Child Maint
I Pay £500 to wife to cover cost of child care for our sons nursery and the remaining goes towards bills

this leaves me approx £710

from this i have a phone contract - £70 a month just about to end though
Petrol for my car - 50 a month
so based on that i have about £500 left a month.

the house and all bills are solely in my wifes name.

I am not sure whether to start looking towards Bankrupcy as i think it may be the sharper but easier way to get myself out of the mess i am in..

I am worried about my wifes house.

Am i allowed to travel abroad if i file for bankrupcy? as i need to do this occasionally for work.

[MelanieGiles]

Hi chimp and welcome to the forum

Dealing with your points in turn, if one partner is insolvent and the other is not - but all or the majority of the debts are in the insolvent partner's name, then creditors do take the view that the non-insolvent partner must have benefitted from the borrowings and is therefore responsible for paying something towards them. If these circumstances are similar to your case, then I expect your partner's surplus income to be required by creditors.

If you feel that is unfair, and have no assets which might be at risk under bankruptcy proceedings, it might be worth considering whether this is a better option for you, or putting the IVA forward with the proviso that your partner does not intend to offer her disposable income and if they do not accept then you will definately declare yourself bankrupt.

This may seem like putting bullet at the head of creditors, but I would be prepared to put a case forward on that basis.

Travel abroad whilst subject to bankrutpcy proceedings is not a problem.

[chimp]

so you think its best to apply for the IVA and if that gets rejected, then file for Bankrupcy..

Also

What is the duration of bankrupcy?

What proportion of my salary would i have to pay?

I hear sometime you are released from bankrupcy early, does this mean the payments stop or do they still continue for the duration?

[MelanieGiles]

I cannot advise you as to what is best for you, only you can make that decision. If you were my client I would work with you to ascertain the historic nature of the debts and how they intertwine with your relationship with your partner, and then advise you of the options.

Bankruptcy generally lasts for one year, however if you are required to make ongoing payments under either an Income Payments Agreement or Income Payments Order then these are paid over a maximum three year period.

[Skippy]

You are bankrupt for 1 year.

If you have more than £100 surplus income you would have to pay up to 70% of your surplus income into an Income Payments Agreement (IPA) for 36 months. There is a table in my blog to give you an idea of what you would be expected to pay.

Some people are granted an early discharge, but the IPA payments continue for 36 months.

[chimp]

How long does the Bankrupcy affect my credit history? is it for a period of time? or is it forever?

Also

The ravel thing is one thing that bothers me...

Am i understanding correctly that i would be free to travel abroad during the 36 months?

The court day process...

how long do i have to spend n court for the bankrupcy case?

[Skippy]

The BR would stay on your credit file for 6 years from the date of the order. However, if you are ever asked when applying for anything (mortgage, banks account etc.) whether you have been bankrupt then you have to answer yes.

You are free to travel abroad during the 36 months.

You are basically at the court for as long as it takes. I had to be at the court for 9.15am and I was back at work by 11.45am, but I have heard of people being there longer - it depends how busy the court is.

[Skippy]

I also meant to say that there are plenty of people who have gone BR and been successful afterwards - Simon Cowell, Alan Sugar and closer to home John Tegg who posts as Coveritall on this forum.