I am 38 with a good job earning around 30k a year. I have around £42k worth of personal, unsecured debt, and an additional 18k owing to my mum.
I am struggling to make payments, using credit to pay credit. I have no assets (other than a car worth about 2k which I need for my job which is driving based)
I will have about £250 surplus to pay creditors in either an IVA or IPA.
My main issue is I need to pay my mum back regulary so an IVA seems the only option where I can do that. I owe her about 16k and the IVA budget shet suggests around £100 a month might be accepted for that debt level.
Also, I would have occasional overtime which seems like it might relieve the pressure a bit, whereas in an IPA from BR, all this would be swallowed..
However, my job isn’t 100% secure and if the IVA fails then...
Any thoughts? Just thought I may have missed something here.
I have no experience of BR, so cannot really offer any meaningful comparison --- an IP could do that for you as part of the intial analysis of your situation. In the long run, of course, the biggie is that an IPA runs, usually, for three years and an IVA for five. But, I get the impression that payments under an IPA might be a bit higher.
You really need to have a chat with a couple of firms.
Your Mum would rank equally alongside your other unsecured creditors in an IVA or BKY.
Taking out that conflict, it sounds as if BKY would be the best option for you. You could always reach an agreement to pay your Mum something back later voluntarily after you have been discharged from Bankruptcy.
Via an IVA she might get back about 15p/£ if you enter a 5 year agreement, being c£3k. In BKY there would be no dividend as the 3 years contributions would be eaten by the costs.
A 3 year IVA might be suitable to match the 3 year of contribution payments you would pay in BKY.
I will speak to a few IPs and see what looks best for me.
The £250 was what I had left over each month after paying essential living costs. Its what I have 'free' each month which could go towards creditors. Of course, I understand this may well be adjusted in either an IVA or BR situation.
I'm surprised you said BR as best option. Honestly, BR seems a bit daunting. My job is likely to get better paid, and doing more work, longer hours, and seeing no return (50% of overtime and pay rise in IVA - all gone to BR) would be terrible!
Is there help with the process of BR? It all seems to be IVA stuff on StepChange - who actually recommeded to me an IVA.
BailOutMeLikeImaBank wrote:also, will the IP allow payments to a family member each month or at the end of the 5 years?
It depends on the whole picture, the figures involved and the attitude of your creditors. They can ask an associated creditor to stand aside and not get any dividend during the term.
You won't be able to do the latter I'm afraid. You payment to creditors will derive from the contributions you pay into the IVA - the IP will then pay a dividend out to creditors.
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