Bankruptcy or IVA

scottie7275 · 8 September 2017 at 7:34PM

Hi everyone,

Not posted for a long time but in need of some advice.

I have recently separated from my wife (her decision not mine). I was her carer for 9 years as she is disabled so all our income came from her benefits.

We have a lot of debt between us which we split 50/50, however she is still getting all the same benefits and I have had to take a very low paid job just to be able to afford to rent somewhere etc. which means there is no way I can pay off my half. I can't even make the minimum payments.

I am going to have to either go bankrupt of do an IVA but I can't decide which is my best option. On the one hand I think I should just go bankrupt, pay any surplus into an IPA for 3 years and have done with it, however I am reading all sorts of information about how you can't pay for car insurance, house insurance etc. monthly because of credit rating. I rely on a car that I have borrowed to get me to and from work and can only afford the insurance monthly!

I am really confused by it all and would welcome any advice.

I can borrow the £680 needed to file for bankruptcy from my parents so that is not an issue.

Thanks for any advice.

Scott

Johnsmith2016 · 8 September 2017 at 11:26PM

How much is the debt ?

Under 20k perhaps consider a DRO

I assume no assets to protect so DRO or bankcrupty would be better than an IVA as you have nothing to protect.

I pay car insurance monthly as did so through bankcrupty, open a Barclays or nationwide basic account .

Do a SOA you may find you don't have a surplus and avoid the IPA

sourcrates · 8 September 2017 at 11:53PM

There are always products available for insurance etc paid monthly with any of the insolvency options.

In a nutshell, if you have a property to protect, go with an IVA.

If not, bankruptcy.

Always seek expert advice before committing to anything though.

TheGardener · 9 September 2017 at 9:38AM

A key question here is are the debts you have in your name or joint names?
Whichever route you take, debts specifically in your name would be included - with joint names, your responsibility would be wiped with BR but your ex would become responsible for the full amount.
If the debts are in your ex's name, your ex would be liable not you.

scottie7275 · 9 September 2017 at 9:41AM

Thanks for your help.

Debts are above £20k so DRO is not an option. I have no property to protect.

Another concern is that I currently have two jobs but am finding it difficult to maintain them. I am currently working 12 hours a day during the week and then working weekends as well.

I would like to give up one of the jobs but fear that the OR will see this as an attempt to avoid paying an IPA.

I am just not sure that I can maintain the current hours for another 3 years.

Scott

TheGardener · 9 September 2017 at 10:54AM

Are the debts in your name, your partners or joint names? The answer to this question is critical to the advice we can give.

scottie7275 · 9 September 2017 at 11:19AM

TheGardener wrote: »

Are the debts in your name, your partners or joint names? The answer to this question is critical to the advice we can give.

With the exception of an overdraft (in joint names) which my ex wife has agreed to pay they are all in my name.

TheGardener · 9 September 2017 at 2:03PM

Ok - the joint debt will become the ex's to pay anyway then as BR would remove your liability. The difficulty for the ex is that the joint account can't be closed until its cleared but all the time that account remains open it will create a financial link to you which will not be great for her credit history.

I would suggest you do an SoA and post here so that we can advise on whether you need the 2nd job to cover your living costs or if you could manage without it. If the jobs are low paid, it may be you wont have an IPA anyway.
You can find a good SoA here http://www.stoozing.com/calculator/soa.php and there is a facility at the bottom to post the SoA to this forum.

Johnsmith2016 · 9 September 2017 at 5:09PM

The bottom line is you can either pay all your spare cash to an IVA for 5/6 years or 3 years in a bankcrupty IPA.

With nothing to protect the option is quite simple.

Leave the 2nd job asap ( your health and work/life balance is worth more than debts) the OR can't say nothing if it leave. There is zero incentive to work harder during bankcrupty (unless it's some incredible opportunity too good to miss ( 99% of the time if it's a bang average ten a penny job I wouldn't worry)You may find you don't even get an IPA and it can't fail like an IVA can so it is a genuine fresh start, and for me the difference between the two on your credit is negliable, both will trash your credit for a good few years.
Some leave work all together and do 12month study to retrain thus avoiding an IPA.
You can keep at car up to £1500 providing you do need it. Ensure you put all things on your SOA forms ... e.g. Emergency fund, opticians, dental etc.
Nationwide will mortgage lend 36 months after discharge so it's not the end of the world.
Good luck

scottie7275 · 9 September 2017 at 5:44PM

I did post an SoA earlier but it seems to have disappeared!

scottie7275 · 9 September 2017 at 7:41PM

Here is the SoA again

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 1
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1220.09
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 485.5
Total monthly income.................... 1705.59

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 495
Management charge (leasehold property).. 0
Council tax............................. 135
Electricity............................. 80
Gas..................................... 0
Oil..................................... 0
Water rates............................. 22
Telephone (land line)................... 11.5
Mobile phone............................ 55
TV Licence.............................. 12
Satellite/Cable TV...................... 59
Internet Services....................... 30
Groceries etc. ......................... 250
Clothing................................ 30
Petrol/diesel........................... 150
Road tax................................ 10
Car Insurance........................... 64
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 20
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 12
Entertainment........................... 30
Holiday................................. 100
Emergency fund.......................... 30
Total monthly expenses.................. 1710.5

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................10568.....230.......24
Barclaycard....................9978......240.......24
Capital One....................2670......120.......29.5
J D Williams...................1510......80........30
Tesco Bank.....................1718......25........25
CapQuest.......................6500......15........0
Total unsecured debts..........32944.....710.......-

Monthly Budget Summary
Total monthly income.................... 1,705.59
Expenses (including HP & secured debts). 1,710.5
Available for debt repayments........... -4.91
Monthly UNsecured debt repayments....... 710
Amount short for making debt repayments. -714.91

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -32,944
Net Assets.............................. -32,944

Bankruptcy or IVA

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