www.iva.co.uk

Hi All,

I'm a newbie on hear and can't decide between the bankruptcy or IVA route.

I do have the following questions though:

* I know my credit rating will be severely damaged by either route but will bankruptcy have a worse affect than an IVA?

* For an IVA, how affordable will my monthly repayments be? Will I struggle to make ends meet?

* I'm in rented accommodation at the moment and I may need to move soon. I've read many postings in the bankruptcy forum were people have struggled to find rented accommodation as a bankrupt. Would I have the same difficulty on an IVA?

Any advice will be gratefully received ...

Thanks.

Hi bla and welcome to the forum

Your credit rating will be affected for a six year period with either route, but the attitude of lenders after the six year period may be more forgiving if you declare that you entered into an IVA rather than bankruptcy. This is something that could only be assessed at the appropriate time, and creditor attitudes alter all of the time so it is difficult to comment further.

Your payments into an IVA - as well as a bankruptcy - would be based upon affordability assessed by figures you provide to the IP. Only you can determine whether you would find those payments a struggle, but your IP will work with you to try and ensure that you have made sufficient allowance for contingent and irregular expenditure.

Finding new rented accomodation can be a problem if you have a poor credit rating, but it is best to be up front with the lettings agencies and advice them of your problems. Private landlords are far less likely to carry out credit check, so it might be better to explore what is available in this market firstly.

If you are undecided as to which route to take, a chat with an insolvency practitioner would be beneficial to explore all options and to understand the advantages, disadvantages and implications of each one. Good luck in your search.

Thanks Melanie ...

Hey bla, welcome to the forum. You're in a great place here for good advice and support from us all. Keep posting and asking questions. I'm with Melanie and can recommend you give her a call and have a chat about your situation, you'll feel so much better. X

Hi
It would be fair to say that monthly payments under an IPA in bankruptcy would be less than in an IVA.Also payments would be for three years in bankruptcy rather than five in an IVA
Regards

Thanks Andy, Vicky and Melanie ...

Don't worry I won't stop posting ... my poor confused brain is churning out more questions than solutions right now ...

Andy, I was leaning strongly towards IVA this morning but your reply has swayed me back towards bankruptcy ...

My situation can be summarised as follows:

* I'm definitely insolvent

* I'm single with no dependants

* I live in a rented flat

* I don't own any real estate property

* I don't own any assets worth mentioning

* I currently work in IT (so possible employers could include financial institutions)

* I will be made redundant in the next 2 or 3 months

So, should I go IVA or bankrupt?

No one can tell you whether or not you should go BR. My advice to you would be find out as much as you can about your options and weigh up the pros and cons. Take advice from an Insolvency Practitioner and ask as many questions as you need here and then make your decision. I rushed into the decision and made the wrong one, so it's definitely worth taking a bit of time.

Me again ...

Forgot to mention, my total debt is around £39k involving 4 creditors.

IVA or bankrupt ... hmmm I wonder?

Thanks Skippy,

Sorry, I sent that last posting before I noticed yours ...

You're quite right, I shouldn't expect others to make these decisions for me ... I guess I'm just looking for advice.

By the way, you say you rushed into a wrong decision, but it seems from your blogs that you've done all right ...

Hi

I would say that if you are about to be made redundant in the next 2 to 3 months, and if their is no possibility of finding another job soon, then an IVA is out of the question as you dont have secure income.

If you are likely to recieve redundancy pay and may find a job in the next month or so, how about looking at a Debt Management Plan, either as a temporary measure or as a long term commitment, this would give you some breathing space.

If you arent likely to receive any redundancy pay and you are not likely to find another job in the next month and you have no assets etc, then I would suggest Bankruptcy.

Im assuming that you already have default notices as you state your are insolvent already.

Hope that helps

I hope that didn't sound harsh bla as it wasn't supposed to. I'd just hate to tell you what to do, and then you regret doing it! That's what happened to me with my IVA.

I went into an IVA at first, but the payments were too high for me to be able to keep them up. I was frightened of BR, and a DMP was never suggested to me, although it wouldn't have been any good for me as it would have taken nearly 30 years to pay off! With hindsight (a wonderful thing!) I probably should have gone BR in the first place.

Over 80% of my IVA clients would have been "better off" declaring themselves bankrupt, if you look at things on a purely financial basis. Many of them felt morally obliged to try and pay back as much as they can, and others did not want the publicity of having the bankrutpcy advertised or just did not feel it was the right thing for them.

These are issues which are vitally important to think about when making a decision about the future - and you are allowed to be a bit selfish, as you are the one who has to live through the process!

Hi Skippy, no, you didn't sound harsh at all, what you said made a lot of sense ... I must admit, I wouldn't mind being in your shoes right now, your almost there ...

Melanie, thanks for those statistics. I do remember reading somewhere that the IVA failure rate was high ...

I think I'm gonna need to chat to an IP at some point soon ... perhaps with yourself Melanie. I'll contact you via your website if that's ok ...

sjbyron, thanks for your help as well ...

My statistics do not relate to IVA failures! They are provided to indicate client who would have been financially better off by going bankrupt - but who are happily paying their way into voluntary arrangements.

I think it is very commendable that you are taking time to consider what is a very important decision. I hope you will find many answers to your questions on this site and by seeking appropriate professional advice.

Apologies Melanie, I didn't mean to slate IVAs, I'm sure they work pretty well as a debt solution ... who knows I may end up using one myself ...