www.iva.co.uk

Hi,

I am currently at the stage of my IVA proposal being sent to me for signing before being sent forward to my creditors. But have a couple of niggling doubts about whether or not I shoud seriuosly consider bankruptcy. I have not really considered it as an option before as I did not want to put my home at risk, but from reading posts on the forum, as I have no equity it would seem that my home would not be at risk. But as I am currenty in a fixed rate deal till 2012 if I were to go bankrupt would I stand no chance of getting another mortgage deal?

It seems that both IVAs and Bankruptcy stay on your credit file for the same amount of time, six years, is this correct?

Also as a Civil Servant I am concerned about my job and whether questions would be asked about a zero tax code.

Thanks for any info.

Hi and welcome.

You are correct about IVA's and Bankruptcy staying on your file for 6 years.

As to your job in BR, have a word anonymously with your HR to see what the criteria is, or have a look at your conditions of service, there should be something on there. I believe though, that if you go br just before the end of the tax year, you don't get the 0 tax code.

If you are not sure about your IVA,then speak to your company and ask them about bankrutpcy, they should have given you advice about this. Remember that an IVA is a commitment for 5 years.

With BR you would be discharged after 12 months usually. You would be expected to pay disposable income over £100 per month into an agreement for 3 years.

Not sure about the mortgage though.

Thanks for your quick reply.

In my case it will be six years as Northern Rock is one of my creditors!

we i first looked in to my debts, i had no equity, in fact i sold house and rented, at the time i felt i should go in to an IVA, but looking back i think i should of gone bankcrupt.

In that sense its a similiar situation, but i would check it out first regarding your job

Hi
I think that if you have a niggle now then that will grow to a major pain during the course of your IVA.
I would go by your gut instinct and explore bankruptcy in detail before deciding on an IVA.
Regards

The IP you have chosen to represent you should give you full advice again about bankruptcy - they should be your first point of call as they already know all of your circumstances.

However any other IP will be happy to have a look at your details - you could send them a copy of your proposals to give them a full appreciation of your circumstances - and give you honest advice if you feel you need another opinion.

An IVA is a big commitment and you will be doing neither yourself, your family or your IP any favours going ahead with it when you are not sure about it.

Northern Rock do not automatically request a six year repayment period? Is this being offered for any particular reason?

As other posters have mentioned, an IVA is a serious commitment to make that you have to be 150% confident it is the right way forward for you before committing. There is no harm in seeking alternative advice, and if you have no assets which would be at risk under bankruptcy proceedings then that is well worth considering. Also have a chat with your HR representative at work, to see what they say about your position and the effects bankruptcy might have both now and into the future (if any!)

Northern Rock are my major creditor so approx £43k of £68k total debts. I think this was why 6 yrs was put forward.

I still don't understand why 6 years is being suggested. How long do you have left to run on the loan, and is it a together loan or ordinary unsecured loan? I have had many IVAs accepted by this creditor over a 5 year period this year, and am just curious as to what is causing the need for an extension?

Thanks for replying Melanie. I have an unsecured loan of 28k with approx 8yrs left have paid 2 yrs and a together mortgage of 15k that I have been paying since May 2007.

Ah - now I understand! It is Northern Rock policy to seek an extension of the usual 5 year terms to six years, when there is more than 5 years still outstanding on the loan.

Hi,

Thanks for everyone's replies, I have a couple of other questions if that would be ok.

1) A nominee could take over my property in bankruptcy as there is no equity, but who could this be? My parents are both 59 so would they have to take over my mortgage whilst I carried on paying as it would be highly unlikely they could get a mortgage at their age.

2)Could Northern Rock just turn around and say sorry we're not providing you with a mortgage anymore. I'm in a fixed rate deal till 2012 which then reverts to SVR (which is now less than I'm actually paying!). If all payments remain up to date as they currently are could they just end my mortgage?

3) My IVA proposal provides £400 for my creditors over the six years however the proposal shows that if I go for a bankruptcy the IPA would be £200 per month. Is this correct only I assumed it would be the same as the IVA payments if not more.

Grateful for any advice anyone can give. I just don't know what to do for the best at the moment. Whilst I would like to repay as much as possible to my creditors I have has some extremely dark and desperate times over the past 8 years which have led to this situation, I'm now in a much better place and really want to be in a position to draw a line under this awful time in my life as soon as possible. I never want a credit card or loans again in my life but do want to retain my home and mortgage and maybe move in the future and my ability to do these things is my main worry with bankruptcy.

Cheers, Crockett

Do your parents live with you? So long as you maintain the ongoing mortgage payments, the lender is unlikely to be disturbed by the bankruptcy - and with negative equity the Trustee will not be interested either, although you will need to effect a transfer of the beneficial interest to either a friend or family member for a nominal sum (usually £1).

In bankruptcy, if an Income Payments Order is made, you will often only have to pay between 50% and 70% of your disposable income for a maximum three year period - so given the situation regarding your assets, this could well still be a good idea.

I personally believe that your IVA is probably the most appropriate solution as your IP is honour bound to give you the most appropriate advice - take Liberta's advice and forward your proposal to another IP - I would be happy to give it the once over ( no charge for that) to see if the most appropriate advice in your particular circumstances is an IVA.