www.iva.co.uk

just a quick update - colleague of mine recently went BR after many years in a DMP. The IPA has been set for her and her husband and even though I knew BR had tightened up on allowances, I was surprised at the amounts they have to pay. In excess of £500 a month.

They are worried but accept this figure has been set and will do all they can to meet the 36 monthly payments. They have already lost their home, so if anyone thinks going BR is an easy option -please think again.

Hi Julie - I'm glad you posted this as I sithered for a while between BR and an IVA with my OH. I think that IVA is now seen as the better option (although paying for 5 years not 3). It seems to me the Government are trying to deter people from the BR option.

That's definitely a deterrent to people choosing BR rather than taking that route as a last resort. Give them my best for the next three years xx

I agree Kazza and I do think in years gone by, BR was an easier option for some.

My hubby's IVA failed and he went BR - we found it a daunting experience, but the allowances were more generous from those in an IVA.

I have to say, I don't agree with the BR allowances being "tightened", I would prefer for the IVA allowances to be more realistic.

The only changes in banruptcy allowances are the ones from the Insolvency service allowance manual, if they are unrealistic the debtor does not have to agree them, the courts view on this who have overall control of all bankruptcies is still the same no-one will pay anything if it leaves them short of required living allowances which differ from person to person If someone is paying over £500 per month in an IPA then they must have agreed it, they must be able to afford it,they would pay at least that in an IVA for much longer, and if they can then its right and proper However if over the three years they find they cannot afford it, like they become ill lose their employment then they dont have to to pay it, the bankruptcy unlike an IVA will not fail, with the high rate of IVA failures people usually end up having to go bankrupt anyway. An IVA will never ever be an easier option than bankruptcy its a mathematical impossibility

The problem is Daniel, even though people agree the repayment value, it can be bourne out of desperation and does not necessarily mean the payments are affordable (in a realistic world).

I understand and agree an IVA is not an easy option, however neither is BR an easy option. I speak from first hand experience on both.

I agree with Julie that neither are an easy option and I'm sure Skippy will agree as well.

The allowances in BR have been really tightened up recently - all DI is paid across if you have more than £20 a month unlike anything over £99 beforehand. The OR keeps an interest in your house for 2years and 3 months before making a decision.

The fees are now totally horrendous and how they expect people to be able to afford these is beyond me.

Many people find that proposing an IVA is a much easier option than the prospect of bankruptcy Daniel - at the end of the day it is a matter of personal choice, and these days a large majority of IVAs accepted do actually successfully conclude.

You only have to look at the posts on here to see how many do conclude successfully!

Hi
We had a case some months ago of someone leaving an IVA to go bankrupt only to find that they had to pay more each month into bankruptcy then they had been paying into their IVA.
It is not a mathamatical impossibility for someone to pay less in an IVA than bankruptcy, some people have three year IVAs agreed with allowances that are better than in bankruptcy, I do agree that it in general bankruptcy is a more cost effective option but it must be carefully thought out.

Regards

I'm seeing that more and more these days Andy. Of course there is nothing to stop someone proposing a post-bankruptcy IVA either, but it would be difficult to do so by offering lower payments than the IPA/IPO level.

We have a bankruptcy client in practice who is paying over £3k per month under an IPO, and every month there is a struggle to get the money out of him.

It's the completers on here who keep me going. I'm already on cereals for supper this month...feels like its never going to end!!

The key thing for anyone with debt problems is good,impartial advice.
Our company discussed both options with us (we were on a dmp at the time)and we then had all the facts to make an informed decision.

Bankruptcy is shown to be an easy way out by the bankruptcy assist companies who trawl the register looking for their latest victims.

Their mailshots are often misleading and outdated and the clients they manage to entice may not realise the full implications of failing the iva and going BR until well in to the BR process.

I would also think that the bankruptcy courts wouldnt look to kindly on anyone failing their IVA to go BR when they are able to afford the IVA payments each month.

It is also imperative that we all understand exactly what we are signing up for when our IVAs are being drawn up, as IVA ads on the tv are also extremely misleading.
We do see many posts on here where people have rushed into an iva not fully understanding the implications and regret their choice of debt solution later.

It is imperative that any one looking at the various options for the management of their debt to do their research,understand each one fully and seek professional advice before deciding which option to go with.

i have a friend who recently took the decision to go bankrupt - he has a payment order for the next 3 years of £550 per month - this he says is more than he was paying his creditors informally - but actually he is far happier knowing he is protected in the BR - each to their own, but I admire anyone who takes the decision to tackle their debts and make a new start !

hi - i would agree that anyone who is thinking of going BR should research it carefully. i did and have recently gone BR an have been lucky enough to have an IPA of a lot less than my IVA payment!

i have been looking at the forum for a couple of years and reading posts by others and have been encouraged by them.

it's not an easy step by any means but i took the plunge and went for it with the assistance of the the firm that sponsors this forum (hope it's ok to say that? lol) they were excellent in the way they helped me and the fee was a very reasonable one, nothing near what the trawlers wanted to charge!

it's time consuming to do the research but i think worth it in the end (for me anyway)

i know that in 12 months time, am discharged and then 24 months after that, no more payments.......!!!!

that said, it's not for everyone and i have been lucky. just wanted to share that!

ttfn x