Problems with payday loans. Can you help me or guide me on what I am to do ?

[luluj]

Before you make any decisions ring your IP up on Monday and talk it through with them ......they will I m sure be able to work with you to find a solution.....please don't jump straight to bankruptcy...you have already come along way in your IVA journey

[Niobe]

Let us know what happens to you on Monday.

[John.qc]

I have been looking into bankruptcy and from what I gather I may have to pay for 3 years but it would be 50% of my surplus income. Half of my IVA payment.

Also I know that you do not have to pay PAYE or NI but i am not sure what happens with this money.

I have opened up a new bank account today and the personal banker showed me the screen where it had done a search on me and showed results of 'BANKRUPT' not IVA. So to me they are the same thing.

I do realise that it would show on my file for a further 6 years but I really do not want any credit in the future.

Any comments on this including the PAYE and NI would be greatly appreciated.

Thanks

[nepensioner]

I really think you should speak yo your IP first John. I stand to be corrected but thought it was all your disposable income less £20. You would be on a nil tax code for this tax year but you would have to pay over the equivalent amount of tax to the OR.

[John.qc]

Thanks nepensioner.

I have come accross the 50% of surplus on other sites.

And also when my statement of affairs was drafted a bankruptcy option was illustraited with my payments being half the amount o my IVA payment.

[mole]

Hi John, those are the old rules, they made changes to the BR rules I think in Dec 2011. They will take all your disposable income for 3 years, so if you only have 2 more to go in your IVA, may be best to still with it.

[Niobe]

If you have DI over £20 they will take the lot, there isn't a buffer anymore.

The Nil Tax is only during the first tax year and this money has to be paid over to the OR, it is not yours to keep. You would still have to pay your National Insurance as far as I am aware.

They're not the same thing - got to the Co-op and you should be able to open an account with no problem at all.

[terry d]

i have not long been bankrupt after condidering an iva,you may not have to pay anything as mentioned above for 3 years,it will all depend on wether you have any disposable income after your income and expenditure calculations,if you are PAYE you will be tax free in this tax year 2012-2013 so if you went bankrupt now now will start paying tax on 5th april 2013,as every case is differnt you will need some advice on this,bankruptcy costs £700 and will have to be cash ,the forms are a little difficult to fill in but i paid vincyent bond a company who sponser this site to do the forms for me,and any questions they will answer,i found bankruptcy a lot easier than i thought it would be and no-one from the coursts judged me in fact they were very helpful,you will have to pay N.I stamp from the day you are made bankrupt any tax or N.i before you went bankrupt will be included ,personalyy i owed my creditors nearly £40,000 and it looks like i wont be paying a penny back,thats because my income is less than my outgoings,so if you earn £1,500 a month and your outgoings are £1,500 a month you will not pay anything to your creditors and of course all your payday loand will go into the bankruptcy as well

[Niobe]

If the OP is paying into an IVA then he will be able to pay across to bankruptcy and it may even be the same amount.

As regards the tax - you may be tax free but it does have to be paid across to your BR.

He still needs to speak to his IP and hopefully they can help him so that his IVA doesn't fail as he has come so far.

[terry d]

if they are getting payday loans surly the iva payments are set wrong maybe too high so they need more cash,hence the payday loans,with banruptcy you wont pay anything if you havent got it
regarding your other answer regarding tax being paid into the BR,you may or may not pay tax,this will depend on wether your bussiness in year 2011-2012 made any profit,if i did not make a profit like mine,there is no tax to pay as you are minus profit,your contribution of tax is based on your last years profits

[Niobe]

From reading a previous post from the OP it seems as though the loans were to pay for things for his kids. His payments were fine as he has said.

It doesn't sound as though he is self employed but I could be wrong on that.

Be good for the OP to come back to us with more information

[terry d]

you have got to be so careful then your in an iva or bankrupt overspending because you have no back up like overdraft/credit cards so i suppose the payday loans are you only answer or just dont overspend

[Niobe]

You should not take out payday loans at all whilst in an IVA.

The OP was saying that because he was pressured into it by his ex he felt that he had to provide something for his kids.

Hopefully he can get this sorted without his IVA failing.

He is not having problems paying his monthly IVA payments.

The idea of both IVA and BR is that you take control of your finances so that when either are finished you will have some money left at the end of the month.

[Skippy]

To answer John's question about tax and national insurance - when you are made BR your tax code it changed to NT, meaning that you will pay no tax or NI for that tax year. (If you change jobs during the tax year your code will reset to your normal tax code)

All tax and NI must be put aside to be paid to the OR.

Regarding payments, as Niobe says, if you have more than £20 disposable income per month all of this will be payable into an IPA. Payments are no longer worked out on a sliding scale.

John, if I was you I would speak to my IP tomorrow and try and get this sorted out without going BR. You say that your payments are ok so there is a good chance that you will be paying a similar amount into an IPA. I'm sure your IPA will be able to help you find a solution.

Good luck and let us know how you get on x

[Adam Davies]

Hi

Great to have advice about bankruptcy from Terry and Skippy, both have first hand experience.

Regards