IVA or Bankruptcy?

northantsandy

Background reading: http://forums.moneysavingexpert.com/showthread.html?p=1137216#post1137216

Basically with divorce, mortgage and redundancy problems I'm facing a stark choice: IVA or bankruptcy.

I know I'm asking what's the difference between your teeth being pulled out by pliers or smashed out with a hammer, but if I am offered both realistically - from a personal and financial point of view - what are peoples views of one against the other?

piggybank1

Your not alone!!!

I was offered the choice between the two, and I picked the IVA. After 60 months you are clear and ready to start again, and with an IVA you can keep your bank account and a reasonable amount to live on. With the IVA, you set what you can afford to pay your creditors. How much do you owe? I was 36k, so it was close call. Have a good think about it, and get lots of information off the internet and call a few different companies, but I have never regreted getting the IVA and not declaring myself bankrupt

northantsandy

Lol this will scare the bejeesus out of everyone.

I have the house I live in: 118500
My old marital home on the market: 119500
Unsecured debt (credit cards/overdraft/loans): 82000

Nearly 300000.

This is completely shocking: basically my marriage broke down so I rented my old marital home out formally and move to Northampton with a new mortgage. I was promptly made redundant. Then I broke my arm. After this I had a minor breakdown (What am I saying in public!). For no particular reason...i really don't know why....i didn't sign on when I was told most of my insurance wouldn't pay out: moving and being made redundant within a week is something I should've known apparently so tough. I went mad on the credit cards to try and keep going in the short-term no thinking of the long-term consequences.

Luckily my family realised what was going on and I have been having counselling for depression and I've been able to face up to the money issues long term I just didn't think about.

This will sound peculiar but I have spent the last two weeks blitzing the agencies looking for work and I have got a job! Wahoo...and at 34k pa. Pension aside with my 453L code means 2050 take-home per month.

My current outgoings WITHOUT FOOD/FUEL is 3600.

If I manage to sell the old marital home - it's been on the market since May and I've recently dropped it to 119500 from 130000 - I will have a lump sum of around 12-15k.

With the payments related to that (mortgage, council tax, insurance, etc) gone if you took out the unsecured debt payments and I am allowed to keep my new place, my out goings will give me an excess per month of around £600.

I'm hoping that this situation will be good enough for an IVA but again hinges on the house going now.

My only real concern is that because Intelligent Finance buggered up taking the ex- off the old house I'm going to ruin things for her and her new fella credit wise (he's gr8- weird to say that I know but there you go.)

The other worry is that the house I'm in now is mortgaged with NR and I have an unsecured loan tied into the account. I'm hoping that they see that letting me keep the mortgage but include the loan in an IVA will yield them more money in the longrun than getting rid of me.

Worst case 82k unsecured, best 77k - think bankruptc is calling

Aaaaah. 18 months ago I had no debts, a happy family home life and a great house....and now

UPDATE:

I've been offered a great job that, given my experience, is what I could hope for package wise but the take home is half of what I need just to make minimum payments.

If I am made bankrupt or IVA's I'm now poop scared that I will lose the job when they find out :(:(

Addicted2Chocolate

piggybank1 wrote:

Your not alone!!!

''After 60 months you are clear and ready to start again'': well same for bankruptcy as it is removed from your credit file after 6 years

''With an IVA you can keep your bank account'' 'well with bankruptcy you can keep open an account if it is not overdrawn and you use the account for the recipt of your regular income. if your bank is overdrawn you can just set up a new basic bank account.

''With the IVA, you set what you can afford to pay your creditors'' similar in bankruptcy, if your household income exceeds your essential household outgoings, you will be asked to contribute part of the surplus (50% to 70%) to the bankruptcy under a Income Payments Agreement for 36 months. wheras for a IVA the payments are usually for 5 years and the Supervisor expects you to pay all of the surplus to the IVA. In my experience most IVA's which fail do so because they do not leave the person with any leeway for unplanned expenses.

And with a IVA the supervisor takes most of the contributions, very little actually goes back to your creditors. Can anyone who has finished their IVA let us know how much the Supervisor was paid and how much actually went back to the credotors? very little i expect...

If you go IVA route you can exclude some assets from the proposal, although many creditors vote for acceptance only with modification that if at end of the IVA all payments have not been made then the excluded assets can come within the IVA and be realised by the Trustee.

IVAs have to include all your unsecured debts so the NR loan would be included, and NR would be bound by the terms of the IVA.

If you go bankrupt all your assets (including jointly owned solely owned properties, motor vehicles, savings...) etc will be realised for the benefit of your creditors. But you would be discharged after 1 year or less.

I know more about bankruptcy, have dealt with 100's of cases (not boasting just mean i do have practical knowledge). What are the concerns about bankruptcy and your new job?

northantsandy

The fact they won't employ a bankrupt: there's no money hadnling involved in the new role.

Addicted2Chocolate

well IVAs and bankruptcy are both insolvency, so is it ok for them to employ someone in IVA but not bankruptcy? i dont understand that but may well be the case.