Hi all, newbie question. Due to a big mortgage rate increase (fixed rate ending) I am faced with a shortfall of over £700 a month after all my outgoings including unsecured debt and cars etc. Seriously considering IVA etc but really don't know if I'll ever get ahead of things. Would I be better bankrupt? We have no equity in the house and have 2 expensive cars that are both worth less than we owe on them. Help!!
IVA Accepted - Sep 2009
F&F Accepted - Oct 2014
CC Received - Jul 2015
There are bound to be several options available to you, assuming that you are left with some disposable income which could be paid over to creditors.
If you are in negative equity, and have no other assets of material value, then you would probably be financially better off by declaring yourself bankrupt, as ongoing monthly payments would only be taken over a three year period, rather than five years in an IVA or perhaps more under a DMP - however, if you have the view that you do want to repay your creditors something, then perhaps an IVA or DMP is a better solution.
I would recommend that you take advice directly from an insolvency practitioner, who will be able to analyse your financial situation generally, and offer advice about all of the solutions available, so that you can understand the advantages, disadvantages and implications of each one.
A visit to www.iva.com to have a look round, read reviews etc would be a good place to start. Take time to speak to 2 or 3 providers and, as Melanie says, make sure you know the ins and outs of ALL your options.
Good luck and regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
Main thing I need to do is reduce the amount we spend on our cars which is currently £730 amonth on just the repayments. Trouble is I owe more than mine's worth by a fair amount so can't part exchange for a cheaper one. Should I let it get re-possessed or is that just a whole load more trouble?
IVA Accepted - Sep 2009
F&F Accepted - Oct 2014
CC Received - Jul 2015
One is on HP the other is on a fixed sum loan agreement arranged by the car dealer. We could probably manage with 1 car but need a 7 seater (ie the more expensive one on HP)
IVA Accepted - Sep 2009
F&F Accepted - Oct 2014
CC Received - Jul 2015
The loan can be included in an IVA, bankruptcy or DMP - but you would need to keep paying the hire purchase agreement to avoid the other car being repossessed - and in bankruptcy, you may find that the hire purchase agreement terminates in any event, and that the Trustee would have to agree to you continuing to make the HP payments.
Thanks I understand that. Trouble is that if I do the above then I only have £10 left a month to pay unsecured credit debt of nearly £800. I doubt that anyone will base an IVA or DMP on that low a contribution.
IVA Accepted - Sep 2009
F&F Accepted - Oct 2014
CC Received - Jul 2015
