IVA failing consider bankruptcy?

[watert]

Hello, I am new to the site and would really welcome some advice.

My husband and I have been in an IVA for 5 months and have combined debt of £110,000 - paying £750 jointly over 7 years with a proviso that our house is valued in 4 years and a remortgage taken out to give any equity to creditors.

I am at present on sick leave and am soon to give in my notice and will be umemployed.

We have decided to go bankrupt as we cannot afford repayments and now consider it to be the best route for a simpler and more affordable life in the long term.

Our house has no negative equity after the mortgage and secured loan would be paid. We have a car worth about £5000.

We are looking to go abroad and start again with family as soon as can - we have two children.

We have missed the IVA payment this month. What is best for us? Do we wait to be bankrupt or petition ourselves? Can we move abroad once bankruptcy has taken place? What happens about attachments to earnings?

We are in a real state and wish we had just gone bankrupt in the first place, but wanted to avoid shame and try and do things right in the longternm for the children. Any advice would be really appreciated. Thanks

[MelanieGiles]

Hi watert

What provisions are there in your IVA proposals for bankruptcy? Is it the responsibility of your IP to petition in the event of a default on your part? If not, then it may be better for you to petition directly, but this will cost £485 each. This route also might be quicker for you.

Don't be in a state - you have tried your best and it hasn't worked out. Look forward to a fresh start abroad you lucky people, and remember family life and looking after your children needs to be the priority.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Adam Davies]

Hi
Just to agree with Melanie and say that you need to think of yourselves now.File for bankruptcy yourself to hurry things along.Have a look at the blogs of Skippy,Scaredkez and Coco who have all been through bankruptcy.
Let your IP know and the very best for the future.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[watert]

Hi Melanie

Thank you for replying. Our IVA states that if we are in default the IP supervisor can petition our bankruptcy.

I have not informed him yet that we have not made payment this month.

Can I ask how quickly we would loose our house and how quickly bankruptcy can be decided? We just want to go, but want to to it properly - can things be undertaken in our absence? There is always a possibility things won't work out and we may have to come back, so want to be very careful.

Thank you so much for your advice.

[MelanieGiles]

Firstly you will not lose your house - especially as you say there is no equity in it. I assume that this will be sold in any case if you are going to be moving abroad - and in bankruptcy you have up to 12 months to make alternative living arrangements even if there is equity in the property.

I think you should now chat through your plans with your IP, to see what they advise. They will probably not want to make you bankrupt, so if this is the route you choose you will have to consider how you fund the applicaiton fees.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[watert]

We are also struggling to meet mortgage payments for the first time ever. We have no funds to pay our own bankruptcy without missing payments to accumulate this for a bit longer - is this common?

We are so unsure of everything and haven't contacted our IP as don't want a snowball and panic. We have only ever spoken to him once by phone and most other is email contact, but knbow we most.

Do you know if things can be undertaken in our absence and how if we move on we will stand with making payments from any earnings. We will go aboard to friends with nothing and start a new life, but are very worried about doing anything deemed as fraudulent. Thank you

[MelanieGiles]

You're not doing anything fraudulent - just facing up to your current financial situation. And don't forget your IP is there to help you, not work against you.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[watert]

Thank you both for your advice. We will write everything down and contact our IP.

One point really worrying me again, is if our bank account is frozen, how do we access any of our wages for living costs and pay utility bills?

[MelanieGiles]

Be prepared to open a new bank account following the bankruptcy order - or talk to your existing bank to see if they will be prepared to allow you to retain the account once you are bankrupt.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[watert]

If we stopped payments and waited for our IP to contact and make us bankrupt (as we do not have the fee to do ourselves), would this make a worse reflection on us in the bankruptcy court?

[scaredkez]

will your ip definitely make you BR, is there a clause in your proposal to say they will and is there enough funds available in the pot to do so, if you stop paying your iva, and you both are going BR you should have the funds within 2 months, i would rather do it myself than let the IP do it, it won't reflect badly on you either way whoever does it.
good luck
kerri

Please view my blog at: http://scaredkez.blogs.iva.co.uk/

[catullus]

Watert,

The answer to that last question is no, but one thing that you need to establish is whether your supervisor will have the funds to petition for your bankruptcy.

from what you have said above my guess is he/she will not in which case you will have to save up the money to pay the deposits to file your own petitions.

You won't be paying in to the IVA so this shouldn't take to long if you were paying £750 in to your IVA

[thebear29uk]

Watert

If you check your proposal it will tell you how much your IP fees are for Nominee fees + costs. There will also be mention of once the Nominee fees and costs are paid the supervisor will ensure sufficient funds are available to petition for Bankruptcy in the event the IVA fails.

My costs were £2500 + vat and £500 which is approx £3500. You say you have been in the IVA for 5 months so 5 x £750 = £3750. Therefore if your costs are similar and you make one more payment there should be enough to cover the 2 fees. Alternatively stopping the payments now would allow you to petition yourselves in the next 2 months. Either way would work but maybe stopping the payments to the IVA now would give you some breathing space.

Regards

Dave

[Skippy]

I stopped making my IVA payments and used the money to pay for my BR fees as there was no provisions in my IVA for my IP to make me bankrupt, and anyway, I'd only made 4 payments.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[watert]

Thank you all so much for your replies. There is a clause to petition our bankruptcy when in default of two payments. There is not quite enough funds after fees for our IP to do this yet. We have missed this month, but not heard from him yet. Should we tell him we plan to petition ourselves, but need the breathing space from payment to raise the funds?

How long is our bank account frozen for, just really worried about day to day living with the kids?

If we continue our plan and go abroad, should we be saying this, as understand there may be attachment to earnings and don't know how this would work if we are not here?

Your advice is very much appreciated.