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  • FIRST POST
    • scottie7275
    • By scottie7275 8th Sep 17, 7:34 PM
    • 8Posts
    • 2Thanks
    scottie7275
    Bankruptcy or IVA
    • #1
    • 8th Sep 17, 7:34 PM
    Bankruptcy or IVA 8th Sep 17 at 7:34 PM
    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
Page 1
    • Johnsmith2016
    • By Johnsmith2016 8th Sep 17, 11:26 PM
    • 433 Posts
    • 224 Thanks
    Johnsmith2016
    • #2
    • 8th Sep 17, 11:26 PM
    • #2
    • 8th Sep 17, 11:26 PM
    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
    • By sourcrates 8th Sep 17, 11:53 PM
    • 12,421 Posts
    • 11,822 Thanks
    sourcrates
    • #3
    • 8th Sep 17, 11:53 PM
    • #3
    • 8th Sep 17, 11:53 PM
    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.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • TheGardener
    • By TheGardener 9th Sep 17, 9:38 AM
    • 2,167 Posts
    • 2,051 Thanks
    TheGardener
    • #4
    • 9th Sep 17, 9:38 AM
    • #4
    • 9th Sep 17, 9:38 AM
    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
    • By scottie7275 9th Sep 17, 9:41 AM
    • 8 Posts
    • 2 Thanks
    scottie7275
    • #5
    • 9th Sep 17, 9:41 AM
    • #5
    • 9th Sep 17, 9:41 AM
    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
    • By TheGardener 9th Sep 17, 10:54 AM
    • 2,167 Posts
    • 2,051 Thanks
    TheGardener
    • #6
    • 9th Sep 17, 10:54 AM
    • #6
    • 9th Sep 17, 10:54 AM
    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
    • By scottie7275 9th Sep 17, 11:19 AM
    • 8 Posts
    • 2 Thanks
    scottie7275
    • #7
    • 9th Sep 17, 11:19 AM
    • #7
    • 9th Sep 17, 11:19 AM
    Are the debts in your name, your partners or joint names? The answer to this question is critical to the advice we can give.
    Originally posted by TheGardener
    With the exception of an overdraft (in joint names) which my ex wife has agreed to pay they are all in my name.
    • TheGardener
    • By TheGardener 9th Sep 17, 2:03 PM
    • 2,167 Posts
    • 2,051 Thanks
    TheGardener
    • #8
    • 9th Sep 17, 2:03 PM
    • #8
    • 9th Sep 17, 2:03 PM
    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
    • By Johnsmith2016 9th Sep 17, 5:09 PM
    • 433 Posts
    • 224 Thanks
    Johnsmith2016
    • #9
    • 9th Sep 17, 5:09 PM
    • #9
    • 9th Sep 17, 5:09 PM
    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
    • By scottie7275 9th Sep 17, 5:44 PM
    • 8 Posts
    • 2 Thanks
    scottie7275
    I did post an SoA earlier but it seems to have disappeared!
    • scottie7275
    • By scottie7275 9th Sep 17, 7:41 PM
    • 8 Posts
    • 2 Thanks
    scottie7275
    Here is the SoA again

    [font=courier new]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
    • TheGardener
    • By TheGardener 10th Sep 17, 8:26 AM
    • 2,167 Posts
    • 2,051 Thanks
    TheGardener
    My initial comments are:
    1) The budget needs to balance and at the mo, your expenditure is higher than your income.
    2)The council tax seems high. Are you paying arrears? If so this will fall into your BR as will this years CT so you wont be paying that until April 2018.
    3)Your internet and phone costs are also very high, you need to look at these - they are part of the overspending problem. Look at your contracts and consider if some of them can be defaulted and allowed to fall into BR as debts and look for cheaper alternatives. You should be able to half these costs which might help will reducing your work to one job.

    Try working out what you can afford on one job income - what's the 'other' income from?
    Last edited by TheGardener; 10-09-2017 at 8:29 AM.
    • scottie7275
    • By scottie7275 10th Sep 17, 9:25 AM
    • 8 Posts
    • 2 Thanks
    scottie7275
    Hi,

    Thanks for the advice.

    Council Tax - I haven't paid anything this year yet and have made an arrangement with them to pay from 1st November. I didn't realise that this could go into BR. Does this mean that this year's CT is written off?

    Internet - this is high because of where I live. Out in the sticks means companies charge more.

    Mobile phone - I am contracted until 2018. If I default on this does it go into the BR?

    Sky TV - Again I am contracted. Does the OR accept this as a normal expense or is it seen as a luxury?

    I am really grateful for all the advice.

    Scott
    Last edited by scottie7275; 10-09-2017 at 10:36 AM.
    • TheGardener
    • By TheGardener 10th Sep 17, 12:08 PM
    • 2,167 Posts
    • 2,051 Thanks
    TheGardener
    Hi,

    Thanks for the advice.

    Council Tax - I haven't paid anything this year yet and have made an arrangement with them to pay from 1st November. I didn't realise that this could go into BR. Does this mean that this year's CT is written off? YES

    Internet - this is high because of where I live. Out in the sticks means companies charge more.

    Mobile phone - I am contracted until 2018. If I default on this does it go into the BR? YES - but get yourself a cheap PAYG/monthly sim before you default the contract

    Sky TV - Again I am contracted. Does the OR accept this as a normal expense or is it seen as a luxury? The overall cost of your Internet/TV/phone/mobile are very high - the OR will be fine with a basic package but sports/movies etc package - probably not

    I am really grateful for all the advice.

    Scott
    Originally posted by scottie7275
    The OR will probably have an issue with the holiday amount too - you could put your food/groceries a bit.
    • scottie7275
    • By scottie7275 10th Sep 17, 11:36 PM
    • 8 Posts
    • 2 Thanks
    scottie7275
    One last question, do I open a basic account before applying for BR?
    • luvchocolate
    • By luvchocolate 11th Sep 17, 7:56 AM
    • 1,479 Posts
    • 1,330 Thanks
    luvchocolate
    Hi yes open a basic bank account and get all your direct debits transfered and running, less stressful one big thing sorted.
    I agree on the holiday amount being too high, keep it around £20 and up your groceries.
    Your council tax will be wtitten of for this year and you will start paying again in April.
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