www.iva.co.uk

Hello!
I am having worries about coming to a decision. Does anybody have any advice?
I have started the IVA process with IP who says IVA is the best option but having read various comments & articles I am wondering wheter it is better to go straight to BR.I have not signed the consent forms yet.
These are my circumstances:
My outstanding debt is approx £73,000 all unsecured on credit cards and an overdraft.
In an effort to get expenditure down I moved back to my parents (I previously rented).
I have no assets apart from my car which is worth £1,275 according Parkers Used Car Guide.
We have agreed a desposible income of £488 to pay into my IVA each month should it be successful.
However I am worried that this is not enough, the IVA will fail and I will have to file for BR further down the line.
Bearing in mind I have no assets apart from the car which I need to get to work would BR be a quicker and better option than an IVA?

Did you IP not talk you through all the options and all the pro's on con's of BR vs IVA vs DMP ?

It is only really a choice that you can make, i would say from what you have said that in BR you have nothing loose but i dont know the full facts of your case.

What is your occupation, is there a reason why you thought the IVA was best advice, has bankrupcy been explained in full ?

Sorry lots of questions but Bankruptcy is usually a last resort and not something you should enter into without all the facts.

Hi
would be useful if you could post your income and expenditure - excluding any debt payment so we can look at that side of the picture. Plus a breakdown of the debt by creditor / amount.

from the numbers you have already posted an IVA would be tight as you would be paying back less than 30% and if you have the "wrong" creditors ( the ones that only accept 40% or more like HSBC) more difficult, so a list of debts is really important for us to advise you.

An IVA might well be possible but you also need to understand that 5 years living back at home is a long time and may provide a different sort of stress.

Incidentally in bankruptcy you are not required to minimise all your outgoings by moving back home so you would be able to find somewhere to rent and a reasonable level.

Other things to review are :-

1. Consequences of debt solution & how it affects you
2. timeframe to become debt free
3. can you cope with 5 years at home
4. Would you feel better payig something back to your creditors?

Happy to give some more advice after you post the other information

kind regards

Bankruptcy is definately not a last resort but a choice for someone who does not really mind whether their creditors get paid anything or much at all. That does not mean it should not be fully considered as it can often be the best way forward for you.

An IVA may be the right choice for you over bankrutpcy, but in today's current climate creditors will nail you to very high repayments and you must be able to afford these comfortably to make this a viable option. Do not be afraid to say no if you feel that creditors are pushing you too hard, especially as you will have made a viable and affordable offer of repayment to them which will give them a higher return.

Thanks for the advice.
The IP went through the 3 options - DMP which was ruled out because it would take over 13 years to repay the debt and BR was called a last resort therefore an IVA seemed the best solution.
My occupation would not be affected by BR. My income is approx £1050 take home a month. My expenditure we have worked out at £562 a month leaving £488 a month available for IVA.
A lot of that £488 is available due to living at home and if I want to (or have to) move out during the next 5 years I would probably have to reduce that amount then surely the IVA would end up failing.
My main creditors are:
Halifax - approx £13,000
Marbles - approx £10,500
Goldfish - approx £10,200
MBNA - 2 cards approx £9,500 EACH
Co-op -approx £6,000
Tesco/M&S/Amex - approx £3,000-£4,000 each
I don't know how tough some of these creditors are when it comes to an IVA but if the figure I'm offering is tight and if some of these creditors are tough, then that's why I am beginning to think that BR is no longer the last resort but my only realistic option.
But I do worry though in BR I may lose my car which I need to get to work.

HI TONY

you would be able to keep a car in an IVA and bankruptcy provided that:-

1. you needed it to get to and from work
2. the car was not excessively valuable - for bankruptcy cars at under £1500 are generally safe. In London I have had cases where they have allowed slightly higer values.

In an IVA the value of a car could be significanly higher.

Might be worth doing an income and expenditure for the situation if you had to / were asked to / or needed to leave home.

this may look like:-

Rent £400 ( adjust as per your area)
Council Tax £ 80 ( as above)
Electricity £ 40
Gas £ 40
Water £ 20
TV licence £ 11
Phone £ 50
Food £170
Haircuts £ 5
Contents ins £ 10
Car insurance £ 40
Road tax £ 14
servicing car £ 25 ( due to age & MOT costs)
petrol £100 ( change figure as app)


So in short both are options but the solution is dependent upon whether you and your parents want to live together for 5 years.

hops this helps

Based upon what you say it is simply going to be a question of personal choice for you. Both bankruptcy and IVA will be an appropriate remedy.

Think about

Contributions 3 years bankruptcy, 5 years IVA
Higher contributions (probably) in an IVA
Bankruptcy advertised in paper, IVA isn't, although both registered at the DTI
Your long term plan - How likely is it you will leave home in the next 5 years?
Is there anything in your debt history which might result in a Bankruptcy Restriction Order? For example did you apply for credit in the knowledge that you wouldn't be able to pay it?

There is no compelling reason why you should choose Bankruptcy over IVA or vice versa.On what you say your creditors will probably look quite favourably at an IVA, although no-one will criticise you for going bankrupt either.

Ian

You mentioned that your job would not be affected by Bankruptcy, but would you future career path be affected by Bankruptcy?