IVA to Bankruptcy

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zmrstk002
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by zmrstk002 » Fri Jan 22, 2010 4:09 pm
Good afternoon,

This is my first post on this forum although I have been in my IVA now for 14 months.

My question is how hard is it to change form an IVA to bankruptcy. I was given all the options open to me at the time when I took out the IVA but at the time I felt that the IVA was the best option as it allowed me to pay at least some of my debts back. So it is not that I feel that my IP gave me the wrong advice, it is just a change in my mind set.

Although over the last year things have changed and I am hoping to marry my girlfriend. Although it sounds selfish I would now like to try to get my debts of my head and start again. So hopefully bankruptcy would be quite straight forward in my case.

I am thinking that bankruptcy would be the best way as it would be a shorter time period, and hopefully free up more cash per month. At the moment I have never been bankrupt before and have no assets, I dont own a house and my car is worth less than £3000 as per the IVA.

Has anybody experience in doing this, and what would I have to let my IVA fail? do I just stop payments for 3 months? what happens to the money that I have already paid over the past 14 months? Also would my curret IP be able to apply for the bankruptcy for me once the IVA fails. As I understand that a fee of £500 is need to start bankruptcy proceedings.

Sorry about the long winded question but my head is spinning now after a afternoon of looking on the internet and any help would be very greatly welcomed.

Kind Regards

 

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Needout
Posts: 52
by Needout » Fri Jan 22, 2010 4:13 pm
I declared BR 10 years ago and apart from the stigma (who cares it happens to the best) the whole experience was not totally unpleasant and the relief is unbelievable.

 

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Julie
Posts: 9503
by Julie » Fri Jan 22, 2010 4:28 pm
Hi there,

If you are sure BR is the route you want to take ( make sure it doesn't affect any present or future career prospoects), then you need to discuss with your IP and have your IVA fail. It would be a shame to go down that route after paying in 14 months of payments. You could discuss the possibilty of reduced payments once your circumsatnces change?

Your chairmans report will tell you if your IP is holding any funds for BR, if not then you will have to fund the BR costs yourself.

You will have to contact your local court as some have an appointment system, its also worth asking what documents they need, not all will need notice of IVA failure. If they do, then you will have to wait the 3 months for the IVA to fail.

The foms for BR can be completed online and saved as you go along.

The judge will ask you if you have taken advice on going BR.

Please don't go into this lightly, there is no guarantee the payments in BR will be less than what you are paying in an IVA. The official receiver will discuss your disposable income and if applicable payments will be put in place for 36 months.

The monies you have already paid into the IVA will be paid to your creditors after your IP has deducted their fees.

Hope this helps.

 

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orange
Posts: 1183
by orange » Fri Jan 22, 2010 4:34 pm
so you still have to pay in going bankrupt!....never knew that.we thought about it but didnt want stigma and had a house

 

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Julie
Posts: 9503
by Julie » Fri Jan 22, 2010 4:38 pm
Not everyone pays Orange, it depends on the amount of disposable income you have.

You don't necessarily lose your home, it depends on what equity is in the property.

As for the stigma...I don't believe there is one with BR now. We certainly never felt any stigma when hubby went BR.

 

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orange
Posts: 1183
by orange » Fri Jan 22, 2010 4:45 pm
it was the adverts in local papers julie.....that put us off

 

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Julie
Posts: 9503
by Julie » Fri Jan 22, 2010 4:48 pm
we never saw hubby's advert and I scoured the papers in the weeks afterwards.

I did read somewhere that they were going to stop putting notices in the local paper, don't know if this has happened though.

 

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orange
Posts: 1183
by orange » Fri Jan 22, 2010 4:58 pm
my parents saw an advert about a neighbours son....and told me so people look..next time i get our local paper ill have a look and let you know x

 

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Julie
Posts: 9503
by Julie » Fri Jan 22, 2010 5:20 pm
Thanks Orange - I don't look for the notices anymore.

xx

 

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kallis3
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by kallis3 » Fri Jan 22, 2010 5:20 pm
These days it is doubtful that anything will be in the paper. It is down to the individual OR.

 

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orange
Posts: 1183
by orange » Fri Jan 22, 2010 5:22 pm
hy kallis whats an OR

 

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kallis3
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by kallis3 » Fri Jan 22, 2010 5:56 pm
Official Receiver.

 

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MelanieGiles
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by MelanieGiles » Fri Jan 22, 2010 8:18 pm
The Official Receiver will use their discretion as to whether the public advertisement of a bankruptcy order is deemed necessary. Some offices do it still as a matter of course, and others only if they feel there are good reasons.

 

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zmrstk002
Posts: 29
by zmrstk002 » Fri Jan 22, 2010 9:03 pm
Thanks for the response's.

I was not to worried about my bankruptcy been placed in the local newspaper but it is good to know that it might not be published. It is always better when ever possible to keep things in house.

As in my original post what I was hoping to do, was to let my IVA fail over the 3 months. With the money for that I would pay into the IVA save and use for on the Bankruptcy notice. Would this sound like a reasonable idea and something that most IP's would agree to.

I was also woundering what would be the best way to apply for bankruptcy is it something that my current IP would help with or does it have to be done by myself.

If anybody has any ideas about the amounts each month I would have to pay until discharged would be a help also. Do these tend to be less than in a IVA in most cases? But I understand that everycase is different,I am just try to gather a much information as possible before I make my mind up.

Thanks again to you all.

Regards

 

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MelanieGiles
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by MelanieGiles » Fri Jan 22, 2010 9:16 pm
Your IP will not necessarily agree to you missing IVA contributions, but there will be little for them to do but just wait until you fall into default and then serve a Notice of Breach.

A reputable IP will help you with all of your bankruptcy questions, and give you advice - but is unlikely to make the application for you unless directed to do so either under the terms of the IVA or by the specific resolution of creditors.

Your payments under an IPA or IPO tend to be around 50% to 70% of your disposable income - subject to the level of your earnings.
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