Would An IVA be betterthan BR???

debt_doctor

Hi Anne,

If he is deemed to have £ 400 per month spare to contribute to an IVA then my guess would be that he would have about £ 300 deemed spare in BR and would have to contribute 60% of this for three years.

So...

IVA £ 400 times 60 months = £ 24 000

BR £ 180 times 36 months = £ 6 480 + £ 345 + £ 150 = £ 6 975

Hmmm... £ 24 000 or £ 6 975 and a safe pension either way Its a tricky one ! NOT.

DD

Useless_with_wonga

I suppose everyone's circumstances are different. We personally had big problems with MBNA. They were our 2nd biggest creditor and held 29% of our debt which put simplistically meant they had 29% of the vote on our IVA proposal.
As you probably know you need a 75% vote to have the IVA approved. Basically MBNA had the power by percentage of their vote to veto the IVA and in our case they did despite our other 5 creditors agreeing to it.There appeared to be no reasoning with them whatsoever. I don't know why they rejected it but it has been suggested they are adverse to IP fees or it could simply be that they want all their money back in full and are not prepared to negotiate.
I was gutted at the time and a tad annoyed but maybe it was a good thing the IVA did not go ahead.
We are now looking at a DMP with Payplan with the option of bankruptcy as a last resort.
We owe a similar amount to your OH in fact about 4K more:eek: i too have a good pension scheme and that too was my major fear with BR but from previous threads it appears it should be safe. I too understand the embarrasment angle at work but there should be someone at work he could talk to in confidence in order to get the answers you need. I know it is tough but when you know the answers to your fears you can make an informed decision rather than second guessing at what might happen. The reality is often far better than your worst fears.
I can only speak from personal experience with MBNA and IVA's you might find them completley different.............then again!!!!!!!!

fiveyearplan

debt_doctor wrote: »

Hi Anne,

If he is deemed to have £ 400 per month spare to contribute to an IVA then my guess would be that he would have about £ 300 deemed spare in BR and would have to contribute 60% of this for three years.

So...

IVA £ 400 times 60 months = £ 24 000

BR £ 180 times 36 months = £ 6 480 + £ 345 + £ 150 = £ 6 975

Hmmm... £ 24 000 or £ 6 975 and a safe pension either way Its a tricky one ! NOT.

DD

Is the £5,000 to set it up on top of the £24,000 - if so it makes BR even more appealing!

AnnesWitterings

Hi all am back and thanks very much for the replies..

Debt doctor could you clarify this for me

I have a copy of his proposal for an IVA

Under the section entitled COMPARISON OF ESTIMATED OUTCOME UNDER BANKRUPTCY OF DEBTOR AND VOLUNTARY ARRANGEMENT OF DEBTOR

under BR list they estimate 36xIPOs at£244 and under IVA list as 60x£454

then they list total legal costs of BR as £12,186 ???? and legal costs of IVA as £6795

are these BR fees the ones that are taken from the IPO income to administer the BR?

At the end the outcome is Estimated dividend to unsecured creditors
BR No Return...IVA 50.2 in the £


Its a no brainer really...we contacted MBNA and were told IVA no way we will fight against it and they are 36% of the 75% of the vote needed for the IVA to proceed.

I think we have come to the conclusion that BR is best, he will lose the car yes,and the £1440 realisible funds from his Share Shave Scheme, so after we confirm that his job is not affected by BR and that his pension is safe we will go and proceed with BR..


And if he can keep his Cashminder acct we should be ok so instead of cheeseparing for 60 months the 36 months of the BR IPO seems more realistic.

He has unsecured debtors to the value of £43.539

Just a fresh start for him is all that I want so if I can get him to do it he could technically be BR by the end of Oct this year


Many thanks for your imput everyone I no doubt will be back with lots more questions re his I&E :eek: :eek: :eek:

A:eek: nne

dalip

Morning anne

No doubt DD will clairfy but when an IPA/IPO is finished after the 36 mths. What is in the pot so to speak gets divided amongst your creditors AFTER the OR has taken his fees. Thats what that £12,186 is for the OR fees. So they are estimating that there will be nothing left for the creditors after all the bc(OR) fees are paid.D

AnnesWitterings

Morning Dalip thats right £12,186 and nowt left the charges make interesting reading

OR COSTS £1715

Secretary of State Fees £1153
Petitioning creditors legal costs £1500
Trustees fees £4257
Legal costs and outlay £1500
Imput VAT £1007
Insurance £1000
Bordereau £54

Total of above are estimated costs to go BR based on an IPO of 36 x £244

The IVA would give a return to creditors of 50.2p in the £ based on 60x£454

....
The IVA would propose that he kept his car HP payments going till the last 12 months of the IVA when it would be paid of and then the £235 of that would be paid into the IVA for the last 12 months.

Plus they based this proposal also on my wages as I would have moved in with him, but I now have no job now, am on long term sick leave and with this reduced income the return to the creditors would be less than 50.2p in the £

I know its only a proposal but the more I think about it BR seems a better option..he can get the bus to work and so can I and losing the car would be awful but Im sure we could cope..we both need to lose weight :rotfl: :rotfl:

I dont want to shove money into a IVA only for it to fail and be made BR anyway

He started to read the figures properly now that they have been explained....hopefully he agrees that BR is best.

Anne

fiveyearplan

AnnesWitterings wrote: »

Hi all am back and thanks very much for the replies..

Debt doctor could you clarify this for me

I have a copy of his proposal for an IVA

Under the section entitled COMPARISON OF ESTIMATED OUTCOME UNDER BANKRUPTCY OF DEBTOR AND VOLUNTARY ARRANGEMENT OF DEBTOR

under BR list they estimate 36xIPOs at£244 and under IVA list as 60x£454

then they list total legal costs of BR as £12,186 ???? and legal costs of IVA as £6795

are these BR fees the ones that are taken from the IPO income to administer the BR? Yes, they always get their money first

At the end the outcome is Estimated dividend to unsecured creditors
BR No Return...IVA 50.2 in the £


Its a no brainer really...we contacted MBNA and were told IVA no way we will fight against it and they are 36% of the 75% of the vote needed for the IVA to proceed.

I think we have come to the conclusion that BR is best, he will lose the car yes,and the £1440 realisible funds from his Share Shave Scheme, so after we confirm that his job is not affected by BR and that his pension is safe we will go and proceed with BR..


And if he can keep his Cashminder acct we should be ok so instead of cheeseparing for 60 months the 36 months of the BR IPO seems more realistic.

He has unsecured debtors to the value of £43.539

Just a fresh start for him is all that I want so if I can get him to do it he could technically be BR by the end of Oct this year


Many thanks for your imput everyone I no doubt will be back with lots more questions re his I&E :eek: :eek: :eek:

A:eek: nne

The payment to the OR isn't on top of what he will pay in an IPA - it is included so if he has no property to lose then I would think losing his share save scheme is a small price to pay to get rid of all his debt.

skylight

But then again, cashing in the share save scheme to pay for the BR fees wouldn't always be a bad thing.... Could buy a small car for work with the remainder knowing the HP one is going. Argue car is essential for work, no work, no pay etc.... He has realised some small assets to prevent the debt situation from getting worse.

debt_doctor

Hi Anne,

What you have asked me has already been clarified by others. I think that IVA proposals are written that way in order to make them look 'more attractive' than BR. Obviously the IVA company is trying to show a better return for creditors to get the IVA approved, but some potential 'clients' could be led to believe that they would actually have to pay that total amount in BR, steering them away from BR.

I beleive that the majority of IVA companies ( not CCCS ) do just that.

I think you are on the right track.

DD

AnnesWitterings

Debt doctor many thanks for looking at it...I knew the answer, just needed to see it written down and some feedback

Skylight thanks for ideas re sharesave scheme and car...didnt think about that, will give it serious thought thanks

OH is now seriously in the BR thought line, just need to check employment/pension side of things then we might have the green light towards BR, I hope he takes this way..but it has to be his decision and one he feels comfy with

A