Help, I'm in an IVA and not sure if I should go for Bankruptcy instead?

davvhenn

Dear all,

This is my first posting on this site, although from reading various other posts it looks very supportive if people in my siuation.

I am currently in my 8th Month of my IVA agreement and feel I am paying a large amount each month over a longer period of time.

My total debt was 130K (I know this is huge and is still something that makes me want to cringe). I was in a situation with an ex partner, who I stupidly took out roughly half this amount for. Something I would never do again, although I thought it was for life. I am where I am so wanted to deal with the problem.

I wanted to pay back as much of the debt as I could as I was responsible for this (they were all in my name), so went down the IVA route, which was accepted after the 2nd attempt

I did feel that I had no other option and my IVA was only accepted if I agreed to extend the IVA agreement for a total of 6 years, versus the original 5 years, which I agreed too.

The payment that I am making each month is £1050 per month, which is killing me.

I am on a slightly higher annual wage of 50K per annum, so knew this was going to be high, however I am really really struggling to pay the £1050 each month, hence I am think the BR may be a better option for me.

A friend of mine was in a simialr situation and went straight for the BR route. He has not had to pay back anything the past 6 months, has a nil tax code, that he has only just started to have to pay back to the OR and will be discharged in a few months.

It seems so unfair that I am trying to do the right thing, being squeezed for everything I have, when I could have gone BR around the same time and been so much better off.

I guess my questions are:

1) Should I go BR as this seems a better option to me. I don't own a home or car and my work would be fine

2) Should I just stop paying my IVA as I know that they won't do anything for 3-months, then declare myself BR

3) Should I try to reduce the payment on my IVA, although they are quite a tough company to deal with

4) In my IVA chairmans report is mentions that if I fail the IVA (don't make payments for 3-months) then they WON'T make me BR. It will put me back to where I was and I would have to go into a DMP with my creditors.

5) If I do question 4 then would the money that I've already paid into my IVA (8K) be taken into account?

Sorry for all the questions. I stopped having sleepless nights a few months ago, but they seem to be coming back.

The other issue is, I received a bonus 2 weeks before my IVA was approved, so didn't inform the IVA company. I didn't mention this as my Father needed a heart operation and on the NHS there was a 11 month waiting list. I used my bonus for him to have a private op at 8K, which I would do again. Will the IVA people want back, as I don't have it and wouldn't be able to get it for them.

Thanks for reading and again sorry my post is so long
D x

Waspeze

just out of interest, have you spoken to one of the debt charities?

Your first port of call should be to contact one of the Debt Charities; see links below. Their services are free; they have no vested interest to serve; their advisors are professionally trained and the advice they give will be objective and in your best interests only.

CCCS 0800 138 1111 National Debtline 0808 808 4000 Business Debt Line 0800 197 6026 CAB – Contact your local office and ask to speak to a Specialist Financial Advisor. Insolvency Service- 0845 602 9848

fiveyearplan

Hi and welcome Davvhen. If you have no property to protect I don't see why you were advised to go for an IVA over BR. There is little difference when it comes to credit rating.

If you went BR you would likely pay hefty IPA for 36 months which is a lot less time than you are comitted to at the moment. AS for the amount it would likely be less than you are paying as living expenses in BR are more generous.

If you go the BR route the amount you have paid in your IVA would be irrelevant as all the debt would be wiped out anyway - also most of that money probably went to the company servicing your IVA.

I hope your dad is doing well.

peachyprice

davvhenn wrote: »

1) Should I go BR as this seems a better option to me. I don't own a home or car and my work would be fine If you had no assets to protect an IVA was never the best option for you.

2) Should I just stop paying my IVA as I know that they won't do anything for 3-months, then declare myself BR If you decide BR is the way you want to go, then yes.

3) Should I try to reduce the payment on my IVA, although they are quite a tough company to deal with You can try, but you need to get it reduced to a sustainable level, otherwise you'll be in the same position in another 8 months time

4) In my IVA chairmans report is mentions that if I fail the IVA (don't make payments for 3-months) then they WON'T make me BR. It will put me back to where I was and I would have to go into a DMP with my creditors. Some IVA's include a provision for BR and will pay the fees, obvioulsy this isn't so for you. You will most likely need a certificate from the IVA co. before you can go BR, check with your local county court.

5) If I do question 4 then would the money that I've already paid into my IVA (8K) be taken into account? No, the IVA co. will keep the majority of this as payment for their fees. It takes quite a few payments before you actually start paying anything back to creditors, you may have paid nothing off your debts so far.

Sorry for all the questions. I stopped having sleepless nights a few months ago, but they seem to be coming back.

The other issue is, I received a bonus 2 weeks before my IVA was approved, so didn't inform the IVA company. I didn't mention this as my Father needed a heart operation and on the NHS there was a 11 month waiting list. I used my bonus for him to have a private op at 8K, which I would do again. Will the IVA people want back, as I don't have it and wouldn't be able to get it for them. If the IVA has failed they have no right to this, if you carry on with the IVA they may discover this at your next review and will want increased payments to cover this, although as it was before approval I'm not sure whether they can or not.

Thanks for reading and again sorry my post is so long

D x

Hi davvhenn,
Welcome to the forum, if you decide BR is the way for you to go pop up your SoA and we can advise how much your budget will change, you will most likely have to pay something to the OR, but this will be based on a sustainable standard of living, not life cut back to the bare.

HTH

davvhenn

Thank you so much for your help. It really wasn't until know that I've been thinking that I should have chosen BR over IVA, but I guess you live and learn.

Can I ask a silly question? what is my SoA. Sorry, being silly!!!!

Thanks again, really been a great help
D x

Merry_Gentry

SoA is a statement of affairs. Try this one:

http://www.makesenseofcards.com/soacalc.html