www.iva.co.uk

I have been paying into an IVA with DFD for a year now and my payments are about to be reviewed. I am currently 4 months pregnant, which I have not yet informed DFD about. I am unmarried, have no assets such as a house, my car is worth less than £500, and my job would not be affected by bankruptcy. (Wow sounds great I know!) More and more I question why I entered an IVA as every month in the last 12 has been a financial struggle. I am considering declaring myself bankrupt as I understand this could be a cheaper option. I know my credit rating would be ruined but I can see no way I would ever be able to afford a mortgage for years to come anyway. I was also considering moving abroad to be with family after the baby is born. Any advice regarding my situation and/or how to get the ball rolling would be much appreciated. Is it as simple as cancelling my IVA standing order and letting it default? Thanks very much in advance!

Hi,

Congratulations on your pregnancy first of all.

Secondly, your credit rating is shot anyway, but would be shot for longer if you were to go bankrupt (another 6 years from the date of bankruptcy.)

I would speak to DFD firstly to let them know what is going on.

You would need to let your IVA fail which would mean stopping payments for three months and then it would fail. You would not be able to petition for bankruptcy before then. Bankruptcy would cost you £510 and you may have an income payments order depending on how much disposable income you have.

Speak to your IP company first though.

If you fail to make payments to your IVA for 3 months then DFD will likely fail it and start the ball rolling with BR proceedings.

As far as I'm aware PD, they won't start proceedings for you, you'll just be back to square one.

Some IVA's state that if there is sufficient money in the pot they will fund BR proceedings, but most these days don't. I doubt, after 12 months, that there would be, but amy would need to check her proposal to see what it said.

Normally, once you fail, it is up to you to sort out bankruptcy yourself.

Jans right - the majority of the time you will just lose what you paid in and be back to square one again with your creditors.

It is very rare that a creditor will petition to make you bankrupt so you will need to find £510.00 as mentioned

It costs creditors a lot more than £510 to make you BR, which is why although they might threaten to do it, they often don't as it's not worth their while.

When my IVA failed I was told that I could wait and see if my creditors would make me BR but I decided to do it myself as I wanted it out of the way.

It makes me wonder why there isn't some kind of maternity rule for IVAs.

Thanks for your advice everyone. If I fail a couple of payments I will have the £510 necessary. I hate to pester for more advice but Skippy13 (and anyone else) how does one even start the ball rolling to declare oneself bankrupt? I can see by your profile you're making 'IPA' payments? Are these to do with bankruptcy and are they more or less than your IVA payments were? Did you find BR a better situation financially than your IVA? So many questions I know but I'm just desperate not to make an uninformed decision again as I rushed into my IVA without considering the options properly! Thanks

Hi,

If you look at this site:

http://www.insolvency.gov.uk/

It will tell you all you need to know about petitioning for bankruptcy. You can fill the forms in online, save them as you go along and ask any questions you need to on here.

IPA payments are Income Payment Agreements which are for 36 months, and will only happen if your disposable income is above £100 per month once your priority payments have been made. They are usually between 50 and 75% of the excess.

I know Skippy found BR much better than her IVA as she couldn't afford the payments on that.

I would speak with DFD and inform them of your position. It may be that they can help you out. Otherwise, just stop your payments to them and after three months you will default and be able to declare bankruptcy.

Thanks very much Jan, I really appreciate your insight. I will get in touch with DFD today and get proactive. Amy xx

Let us know how you get on Amy - and we are here for any support or advice.

Hi Amy, sorry, I've only just caught up with this.

If you decide that BR is the best option for you your IVA will need to fail first. You will need to miss 3 months payments and then DFD will issue you with a certificate of failure which you will have to take to the court.

I am currently making payments into an Income Payment Agreement (IPA) which lasts for 36 months from the date of the first payment. These payments are lower than my IVA payments - my IVA was £459 a month and my IPA was originally assessed at £186 a month and has recently been reduced to £161.

The only reason I chose BR was because I couldn't afford my IVA payments and they couldn't be reduced due to the modifications of my proposal. In the end it was the best option for me, but it's not something to be taken lightly.

Ask as many questions as you want, and if I can help I will xxx