www.iva.co.uk

Having just received our annual mortgage statement, it appears that, including early redemption charges we owe £2000 more than the house is worth. (we took out a 95% motgage in July) In addition to the house, we have a car worth about £9000 (essential for work, kids, 25,000 miles a year) We owe £75,000 in unsecured debt, paying back £1400 a month on this. We have good salaries, but we are using credit as a top up to pay all the bills each month, so although we are up to date, we are gradually increasing the debt.
Would an IVA be better for us, or bankrupcy?
(We could afford to pay back approximately 50p in the pound to an IVA)
Thanks
Helhan

Obviously the decision is yours, in bankruptcy you probably would not be able to keep a car worth 9,000K. bankruptcy would offer you an end to your debts, but it would bring the uncertanty regarding your homw, although there is no equity, eventually there might be. As well as the useful information on this site, there are some videos to watch on bankruptcy on www.myvesta.org.uk. It is also important to consider that Bankruptcy also affects some professions. An IVA is a difficult choice also, not one to be taken lightly, I am sure you have read many of the other posts of peoples own experienes. 50p in £ is a good return on to your creditors, so may be worth a try. If it failed it may lead to bankruptcy anyway. One thing that I am sure of though is that you need address this situation sooner rather than later. I am not an expert just another person in debt.
I am sure one of the experts will advise you soon

Good luck and best wishes with whatever you decide
Keep posting, your experienes.

LILY

Hi Helhan
It may be worth contacting one of the experts from the site to go through your income & expenditure to see if an IVA is right for you.
An interesting website for bankruptcy is www.insolvency.gov.uk which may also be worth a look.
But in short if you do fit in the IVA criteria (have surplus income etc) it is certainly worth looking at in more detail. Are the debts in sole or joint names? IS the house in joint names? There would be many questions before coming to the right decision.
I hope this helps.
Kind Regards
Nicola


Finebridge Ltd
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www.finebridge.co.uk

Helhan

That decision should be made on the basis of how important it is to you to repay your creditors.

Given the facts of your case, it certainly seems that an IVA is a solution you could offer to your creditors, as you have a good disposable income and could therefore return a reasonable return to creditors over a five year period. This would be greatly reduced under bankruptcy proceedings, as your monthly payments (if assessed that you can afford any - likely in your case) would only be paid over a three year period.

Therefore if you feel morally obliged to repay as much as possible, an IVA is preferable over bankruptcy proceedings. As you have little equity in your property, however, and if you do not really care how much your creditors are paid back, then bankruptcy may be a more favourable alternative.

Seek more specific advice before choosing the way forward.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk