I don't know whether bankruptcy would be an option for me

[Midgicle49]

Hi, I've been in my IVA for 8 months now and due to recent circumstances changing my income has reduced.
I've contacted aperture who have done a new I&E and reduced my payments pending acceptance from my creditors.
However they have advised me that due to the reduction in payments they may make me extend the term of my IVA by 12-18 months. I'm not prepared to extend the terms because I have already taken out the IVA over 6 years instead of the normal 5.
Where do I stand with this?
I willingly opted into an IVA as opposed to bankruptcy because of my occupation but I don't want to pursue it anymore and am training in a different field which wouldn't be affected by bankruptcy but I don't know if this is an option that would be available to me because I'm already making payments. Also, the only way I could afford the bankruptcy fee would be by not paying my IVA, so I don't know what issues that would cause?

[stringyAcid]

Hi midgicle,
Welcome to the forum, there are pros and cons to the iva vs bankruptcy issue. Do you have any assets to protect is the first question and next for me would be about my employment which you have already answered.
How much you owe is another. Less than 15k you could consider a DRO. Iva is a long commitment and at another possible 82 months (if they extend in your variation) you have got a long journey ahead. Not without its merits I may add. You should by the end of that appreciate smaller sums of money than you ever did. Sentimental maybe.
Go bankrupt now you'll pay 36 monthly payments worked out similar to an I/e in an iva but slightly different.
I would consider bankruptcy knowing what I know now if I was dealing with my situation again. To be honest the word scared the living daylights out me then.
I would ask as many questions on here or the sister bankruptcy website and take your time making this decision.

[kallis3]

Hi and welcome,

DRO amounts have now been raised to £20k. You do need to have less than £50 a month disposable income but it will be finished within 12 months.

With BR now, the fees are £655 but you can pay that in instalments.

You will have to let your IVA fail before you can consider bankruptcy and your credit record will be shot for six years.

As stringy says - you will probably be subject to an income payment agreement for three years but the bankruptcy is still over in 12 months.

[Foggy]

You can fail the IVA by missing three payments -- that will help towards the BR fees. However, you will be paying a similar amount to the IVA payments over the next 3 years ( still less than your current projected term). The other downside is that, whatever little control you feel you have now will be stripped away. The OR in BR will become your banker, wife, mother and mother in law all rolled into one !

[kallis3]

What I will also add is, if you own your own house the OR will keep an interest in it for two years and three months and you could potentially end up losing it if you have equity.

Also, if you have a car that is worth more then a couple of grand you may be made to sell it and buy a cheap run around.

[Midgicle]

Thanks for the responses
I don't own my own home, I rent from housing association,so there's no issue there and I've only got a little run around so that's no problem.
When I met with the woman from Aperture, she told me that bankruptcy would make me pay higher payments because their expenditure guidelines are a lot tighter than an IVA is that true? She also got me to get my mum to write a letter saying I paid her 100 per month for childcare which I don't but she said it wouldn't affect my mum in anyway in terms of tax etc because I was worried about getting her in to trouble with hmrc, she's retired now so I wouldn't want it to affect her pension or anything. She said they don't show the creditors they just use the letter to tick a box to say it's an expenditure.
The debt I owe is a little over 40k is a shortfall from a repossessed house among a couple of loans and a credit card.
My ex told me not to do anything that it would all be ok, we could sort it...while he went bankrupt and left the full debt to me. I'll never be so naieve again that's for sure! I'm sure he will have told the OR he paid me x amount of child support to make sure he didn't have to pay anything towards his bankruptcy but he doesn't give me a penny.
There is definitely a lot to think about but id be prepared to pay for 36 months if I had to so that me and my son could get our lives together and enjoy it sooner rather than later. If the IVA duration did increase due to my lower income, I take it that if my income ever went up they wouldn't reduce the duration back down?
If they do propose an extension can I reject it? What would happen then?
Sorry I'm waffling but I have so many questions. Thanks again for your help

[Foggy]

Yes, you can reject the extension and the creditors would expect the IVA to run as previously agreed or terminate the IVA, depending upon how the variation was worded.

Before going for BR, however, I would check with the H.A (anonymously if you wish) that BR will not affect your tenancy agreement.

[kallis3]

You would probably pay round about the same as you are now and the guidelines are stricter but I am sure you be fine. Totally wrong of Aperture to suggest that you put down expenditure that you don't spend.

It is quicker but would impact on your credit rating. Your house would be fine and it certainly sounds as though this is a possibility and would allow you to move on.

[stringyAcid]

Don't worry about waffling because it's not. You need to see some light and I can see why you are not seeing a flicker yet. If they modify your lower payments with an extension you can reject the mod. They might then reject the variation and you are then probably left with the situation of letting the iva fail. Once you receive termination letter you can pursue bankruptcy. How much are you proposing to pay with the variation?

[Midgicle]

My payments are dropping from 165 to 101 per month which adds up to quite a lot in the long run and is why the woman at aperture thought they might make me extend.
When I had an I/e review last month they asked me if I wanted to continue making payments (at the new lower rate) while the variation is processed so I said yes, not wanting to drag the process out at the end but they haven't taken the payment. I contacted them by email to find out why and it's taken them a week to get back to me and say they don't know. Does this count as a missed payment if I don't call and pay by card? Because they gave me an option not to pay.

[kallis3]

If they have not taken the payment then I think it probably will count as a missed payment.

Just keep an eye on your bank account.

[Midgicle]

Thanks everyone, this is really helpful

[stringyAcid]

The reason I was asking was to see how low they were. If you have quite low payments over such a long period gives you very little room to manoeuvre if you start to struggle again. I wouldn't seem being able to go much lower and you wouldn't want a further extension to 82 months.

[Lisa Thomas]

Hopefully creditors will accept your offer. Ask Aperture to see a copy of their report. The variation should be to accept payments to date in F&F. I would surprised if creditors considered suggesting an extension and hope this is not something Aperture have either put forward as a proposal or suggested to creditors to put forward.