Requirement for an IVA

jonesw

I Still have not got the nerve to complete my submission for Bankruptcy yet and constantly looking for alternatives......

When I originally spoke to the CCCS regarding an IVA, after completing my income/expenditure analysis I did not have sufficient left over to meet the requirements of an IVA.

I have been looking through my notes but I can not find what the approximate percentage of the required value was.

Can anyone help please as I know I need to do something....as it just gets worse each month and my creditors will only keep accepting the nominal payments for a short time.

Maybe with a lot of juggling I can get my outgoings reduced
to the bare minimum so that the value left to repay on
an IVA is acceptable. This would save me having to do
bankruptcy and still enable me to be clear in 5 years.

My total debt (following a very messy and expensive divorce) on unsecured Credit Cards / personal loan and overdraft is around 70k

Thank you for any advice/assistance

Jonesw

Conor_3

The CCCS do not advise bankruptcy lightly. £70k is not an insignificant amount and for an IVA, you'll need alot more free money than you have. All you're doing is putting off the inevitable

You'd better make a decision soon. Look at the money you're paying out as money just being pointlessly wasted. You might as well be putting a match to piles of £20's.

Your credit is knackered. You can't afford to live. It's making you ill. It's ruining your life. You've been told by people who are experts that bankruptcy is the only option. Unless you're not paying anyone, any money you're using to pay debts at the moment is simply being thrown away whilst you dilly dally around.

I went bankrupt. It is not the end of the world. You will feel a great relief after it. Treat it as if you've been reborn and given a second chance. You'll have the benefit of experience/hindsight and if you're wise, you'll remain debt free for the rest of your life.

Once you've decided you're going to go bankrupt, stop paying all your debts immediately. Just pay the rent/mortgage, gas/electric, phone bill, council tax and running costs on your car - the bare essentials.

kevker

A brave post by conor. I agree, take the plunge and start getting your life back on track. I really struggled for two years trying to make repayments. My life transformed after declaring bankruptcy. I agree, it's not to be taken lightly, but I think you realise what the best course of action is.

Debt_Free_Chick

As a broad rule of thumb, you need to be able make sufficient payments over 3(?) years to cover about 60-70% of the debt.

In your case, you would need about £1100 a month to repay 60% of your current debt over 3 years. Even over 5 years, you need to find £500 a month.

An IVA is your proposal to pay most of the debt over a fixed period, at a fixed rate. Your creditors will vote to see if they accept your proposal. Generally, you need to be looking at repaying more than half the debt (hence my 60-70% guesstimate) over preferably no more than 3 years.

Looking at your figures, I think you can see why CCCS said an IVA was not suitable.

Also, an IVA is incredibly inflexible. If you miss any payments, then your insolvency practitioner has to declare you bankrupt - it's a knife-edge so you would have to be very confident that you could definitely afford all the repayments over all the period of the IVA.

If you have no assets, then consider bankruptcy. Your debts will be wiped clean, though you may need to pay some of your surplus income to the OR for up to a year. But that's it - then it's all over and done with.

I emphasise that this only applies if you have no assets - if that's so, then give it serious consideration. You could be out of this mess in a year.

sparkle84

As a broad rule of thumb, you need to be able make sufficient payments over 3(?) years to cover about 60-70% of the debt.

In your case, you would need about £1100 a month to repay 60% of your current debt over 3 years. Even over 5 years, you need to find £500 a month.

An IVA is your proposal to pay most of the debt over a fixed period, at a fixed rate. Your creditors will vote to see if they accept your proposal. Generally, you need to be looking at repaying more than half the debt (hence my 60-70% guesstimate) over preferably no more than 3 years.

This is not really correct an IVA is over 5 years and IP will assess yout situation and see what disposable income you have to repay your debt. How much your creditors will accept is anyone guess - it can range from as low as 10p in £ to 80p. Chick is correct in that it is very inflexible and as you don't have a house to protect it probably isn't for you, however most reputable Insolvency Practitioners will offer you an hour's advice at no cost, if you call payplan and speak to them I am sure then can set something up for you then you will be able to make an informed decision about what you want to do

Hitme

I'm in the process of trying to set up an IVA and from what I've been told you need 25p in the pound before an Insolvency Practitioner will consider taking your case on. Unfortunately it's not quite as simple as that either as thats 25p in the £ to the creditors i.e. after the IP's costs. So for your 70K debts I reckon you would need between £420-£450 a month. If you have a house they will also look for you putting 75% of it's equity into the IVA during year 4, this equity will be taken into account in the 25p in the £ min. Any overtime or bonus will not be counted but they will still expect/make you pay 50% of them to your creditors.

My wife deperately wants to keep the house so thats why we are trying to go down the IVA route ( DMP would take 18 years of stress and harrassment!!!!).

All the above relates to IP's like Baker Tilly (CCCS recommended) and Payplan not sure if you pay an IP upfront for their services whether they would have any success trying to arrange an IVA for less than 25p in the £. You would then need to find a sizable amount of cash to pay them and risk losing it if you were unsuccessful.

Good luck with what ever you decide.

jonesw

Thank you everyone, this site is so helpful

I guess you re right in that I am just delaying the inevitable.

I had never been in debt before the divorce started 3 years ago (just a manageable personal loan for family items etc)

The last 3 years have been a nightmare for me and the rising debt problem from running/paying the mortgage on the house for my ex wife and children plus paying fo my own accomodation and bills just mounted up and up.

Solicitors fees were so high. THEN at the end of the divorce process the house got left 100% to the ex wife and I ended up with all the debts..... I know this is not a site to rant about the unfair divorce system in the UK and how stacked it is against the man but...... this was so unfair and nothing I can do about it.....

Now I just have to sort the mess I have been dumped with.

I do not have any assets as the only item I really had was the house and that has been ordered to the ex wife by the court.

I am aware however that if I declare bankruptcy that the OR can look at the property and still over ride the court order and claim what would have been my interest in it. Now with the bitterness from the divorce and considering that I have nothing from the house anyway (and there was a lot of equity) I really dont care what happens to the house as far as my ex wife is concerned, but I do care fo the well being of the children.

This is why I have been hesitant to jump into the bankruptcy with out first ensuring, and I suppose convincing myself that there is no other option.

It just all adds to the pressuse of trying to do the right thing.

I need to sort out my mess but I will create another one if I do......

I cant afford £500 each month and I am already only paying token payments to each of my creditors so its really a case now of just getting on with it and dealing with what ever else is thrown at me.....I just want it all to end so I can begin to enjoy life again and not deal with the constant harassment and worry.... a good night sleep would be very welcome right now...

Thank you all again for your assistance....

Jonesw