IVA or Bankruptcy

[Shining]

Totally agree that both are excellent debt remedy measure but one size doesn't fit all and therefore it's your choice and your choice alone. i personally went for IVA made my 60 payments and am now debt free.

[The Major]

Hi Skippy

Good point well made, however I thought expenditures IVA or Bankruptcy were the same, mainly based on CCCS guidance, and Foggy made a good point, a bankruptcy cannot fail,when payments are not affordable, or become not affordable, but I guess bankruptcy is a word not everyone can digest

[MelanieGiles]

Expenditure levels are set by creditors, but the debtor does not have to agree if they feel that the payments are unaffordable. The Major paints a very bleak view of life in an IVA, and perhaps this comes from their own personal experience - but I would be keen to see other views on this point and if there is a feeling of being out of control of one's finances and destiny, how you all feel this could be improved.

[Foggy]

In or out of an IVA or BR, are we ever actually in control of any aspect of our lives, let alone finances ?

At least, having taken a debt solution I am not constantly fire fighting and, yes, I feel more in control (as far as I ever was).

Despite my early trepidation my firm are pro-active and I do keep them informed of every little change so neither of us get any surprises. My advice would be to get a good line of communication going and, like any relationship, work at it (OK -- in my particular case, not a good comparison ..... but you know what I mean).

[abbiesmum2003]

I feel much more in control of finances since looking into/commencing the iva. Before it we were swamped and drowning in minimum payments and robbing peter to pay paul then back again. Dreaded every post delivery and text from the bank. Hubby made daily trips to bank to switch money around. Since iva we know how much things are and what we need to allow for and save for things/events we know are spproaching. I would say we are in control as best we can be with the iva. BR was not an option for us as need to kerp house for time being and given income and morals we felt we wanted to pay back as much as we could. I agree control is a awkward term i guess as creditors can disagree with figures but overall we feel more in control than before.

[Little miss trouble]

When in debt your life spirals out of control, you can't control you worries. Bank balance. Phone calls. Letters. Texts. Your health as well. Once in an Iva you start to find a relaxed balance which helps you focus on life again.

[mole]

Looking back, knowing what I know now I think BR would have been the best route for me. I had no assets to protect and it would have all been over by now, instead I have done 4 years and still 2 to go.

However, I am fine where I am and can see light at the end of the tunnel.

For me the worst thing about my IVA is the uncertainty, As Foggy says, if your circumstances change during BR and say you lose your job, it doesnt matter, time continues to roll and after your year or 3 years you are discharged whatever.

With an IVA if you become ill, lose your job, suffer salary cut, have a child, anything that would affect your ability to pay you are at the mercy of your creditors again to decide your fate. They may extend the agreement or even fail it, even after 3 years (the likely period for BR, your IVA can fail if you lose your job and then you are back to square one.

Life on the breadline for 3 years is tough, for 6 or even 7 years is more very tough and will put severe strain on relationships.

So, if you have no assets and it will not affect your job BR may be best. If you have assets to protect and importantly think you have stability in your life and career then an IVA may be best.

Also as has been stated, make sure you understand the equity clause if you have money in your property. More and more creditors are chasing this money. Property prices have been rock bottom for while but it would not surprise many if house inflation returned to 5% per annum. If you started your IVA with £150,000 value house and £135,000 mortgage you may think there will be no equity to take. But 5% per annum with compound interest may mean your property is worth £191,000 after 5 years and you may be required to get a circa £40,000 secured loan at the end of the IVA. You would be stuck with that for up to 15 years.

So in summary, you are doing the right thing you are getting all the information you can ahead of making a decision. Some great IPs on here will also assist in looking at your situation and detailing the pro's and con's of each solution for you.

Best of luck and glad you are dealing with your debt one way or another

[plasticdaft]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by mole

Looking back, knowing what I know now I think BR would have been the best route for me. I had no assets to protect and it would have all been over by now, instead I have done 4 years and still 2 to go.

However, I am fine where I am and can see light at the end of the tunnel.

For me the worst thing about my IVA is the uncertainty, As Foggy says, if your circumstances change during BR and say you lose your job, it doesnt matter, time continues to roll and after your year or 3 years you are discharged whatever.

With an IVA if you become ill, lose your job, suffer salary cut, have a child, anything that would affect your ability to pay you are at the mercy of your creditors again to decide your fate. They may extend the agreement or even fail it, even after 3 years (the likely period for BR, your IVA can fail if you lose your job and then you are back to square one.

Life on the breadline for 3 years is tough, for 6 or even 7 years is more very tough and will put severe strain on relationships.

So, if you have no assets and it will not affect your job BR may be best. If you have assets to protect and importantly think you have stability in your life and career then an IVA may be best.

Also as has been stated, make sure you understand the equity clause if you have money in your property. More and more creditors are chasing this money. Property prices have been rock bottom for while but it would not surprise many if house inflation returned to 5% per annum. If you started your IVA with £150,000 value house and £135,000 mortgage you may think there will be no equity to take. But 5% per annum with compound interest may mean your property is worth £191,000 after 5 years and you may be required to get a circa £40,000 secured loan at the end of the IVA. You would be stuck with that for up to 15 years.

So in summary, you are doing the right thing you are getting all the information you can ahead of making a decision. Some great IPs on here will also assist in looking at your situation and detailing the pro's and con's of each solution for you.

Best of luck and glad you are dealing with your debt one way or another

Very decent well balanced post.

Paul