A question about bankrupcy

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Max_The_Mole

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Post by Max_The_Mole » Tue Sep 29, 2015 11:53 am
Hi Guys,

I keep seeing info (All over the internet) About bankruptcy being expensive and creditors not getting much back.

I know roughly what the fees are for an IVA but I can't see much about bankruptcy (Other than the fees to be made bankrupt)

So....Why is it that bankruptcy appears to offer such low returns to creditors?

I ask partly out of interest and partly as I worry my creditors will reject an IVA and push for bankruptcy!
 
 

kallis3

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Post by kallis3 » Tue Sep 29, 2015 12:05 pm
In bankruptcy you will be required to pay an Income Payment agreement for three years if your disposable income is £20 or more after your bills have been paid.

Creditors are unlikely to push for BR (unless one of your creditors is HMRC as they do that sometimes) and of course don't forget if you own a house you could lose that as well.

BR also lasts on your credit record for six years but you would only be on the Insolvency Register for 12 months at the most unless there are problems and they put a restriction on you for it to carry on for longer. This is usually if you have not conformed to your BR conditions.
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
 
 

Lisa Thomas

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Post by Lisa Thomas » Tue Sep 29, 2015 12:07 pm
The Bankrupty Tax is the killer - on a loose formula its about 17% on all asset realisations. The you have the O.R./Trustees fees which are usually at least the same amount of an IVA Supervisors. Then you have the petition costs to pay if a creditor forced the Bankruptcy Order. Then you have extra legal and other associated costs if an asset, such as a property, has to be repossessed and sold etc. Also contributions only last 3 years maximum.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk
 
 

Michael Peoples

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Post by Michael Peoples » Tue Sep 29, 2015 2:52 pm
In an IVA the IP can do the job cheaper than in bankruptcy. In an IVA the ultimate responsibility falls on the debtor and while the IP needs to do a certain level of verification they can rely on information supplied by the debtor. In a bankruptcy the IP must verify everything themselves and may have a non compliant bankrupt which increases the workload and thus the costs.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
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If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
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