Iva or bankruptcy better?

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natalie634
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by natalie634 » Tue Jun 06, 2017 9:29 am
£40k debts - all unsecured. I am not a homeowner
Iva or bankruptcy better? I am in full time employment with regular impact
Can I enter an Iva without spouse knowing? Will it impact their credit score?
Will my tax credits be affected?
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Foggy
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by Foggy » Tue Jun 06, 2017 9:48 am
Hi --- An IVA is designed to pay off as much as you can afford over a period of, usually, 5 years and is very intrusive, financially. No up front costs with reputable providers. Bankruptcy will end debts right away, but you still might be required to make payments for 3 years, again, very intrusive, but mainly only at the start. £750 court fees payable up front.

Some employments will not allow debt solutions, so you will need to check.

Your bank account can be temporarily frozen if you go for BR, until the official receiver is happy.

Both will trash your credit score and will impact on anyone you have joint finances / accounts with by association.

You do not have to tell your spouse -- but both are a big secret to keep -- so quite a strain !
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moira717
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by moira717 » Tue Jun 06, 2017 1:14 pm
Hi, I kept my debts secret for years, terrified of telling my husband. I told him Feb this yr and is best thing I did ( actually did it in a letter as couldn't face him). I think it would have been hard to sustain an iva without telling him and as have had to make drastic changes to my lifestyle and spending. 5_6 yrs a long time to keep it secret especially if start getting calls and letters from creditors etc. My husband has been very supportive and upset I had kept it to myself for so long. Good luck to you, you have made first step, admitting you need help.
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Lisa Thomas
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by Lisa Thomas » Wed Jun 07, 2017 8:59 am
Hi Have a look here for Bankruptcy pros and cons

https://www.youtube.com/edit?o=U&video_id=mAkQsVSCnqo

and here for IVAs:

https://www.youtube.com/edit?o=U&video_id=zrQruCDiw5w

On the face of it, Bankruptcy would seem to be most appropriate to your circumstances but would need more information to be sure.

You may have to pay 3 years of contributions in Bankruptcy compared to the standard 5 years (where IVA protocol T&Cs are used).

Your credit rating is affected for 6 years in either process at present.

If the IVA goes wrong you could be back to square one and facing Bankruptcy.

You appear to have no assets to protect to warrant an IVA.

Windfalls will only vest in the year you are Bankrupt rather than 5 years i the 'standard' IVA.
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Foggy
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by Foggy » Wed Jun 07, 2017 10:27 am
Lisa hints at one of the reasons for BR over IVA, assuming all other circumstances are right, - BR rarely fails ! Changes in circumstances can ( and do) derail an IVA over 5 or 6 years. If you are straight with the OR and fully comply, BR will not fail.
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