Bancruptcy or IVA?

blind-as-a-bat_2

How realistic are you on the essential living costs? have you left an emergancy fund in that?

As an example an £1800 car is going to struggle to servive five years without some majour expence

To be honest, and depending on the creditors and IP fees, your friend may struggle to get on an IVA in the first place, if they do, i think they will have to cut the budget to the bone.

So i have to agree with peachy on the little info you have given, an IVA is both not suitable as there are no assets/job to protect, and is probebly unrealistic on that income to debt ratio anyway

Rossa_3

I agree with all the comments about an IVA versus BR.

There are 2 types of IVA, lump sum from the sale of assets or income based which would be more likely scenario for your friend. However, there's no guarantee that an IVA will be accepted by the creditors.

A friend of mine tried to go the IVA route Jan 08 and was refused it even though she offered 50% lump sum. That included the IP fees, by the way. Unless creditors with 75% of the debts all agree then you're into a BR anyway. She had one creditor who had the largest debt, a loan, who actually made the comment that they would rather see her go bankrupt than pay off 50% of the debt. I found this outrageous as via a BR they wouldn't have got anything (and didn't, so there ***** *****). And she had been a customer for 10 years and never missed a payment until made redundant.

Also the credit card companies basically sell the debt onto firms of auditors like KPMG so you are not even dealing with the company that you borrowed from in the first place. Like all "grey suit" types if you don't tick all their boxes then it's no way Jose!

And if you think that stinks a little then the lady at the IP told us she had another client who offered 100% repayment from the sale of very substantial assets but still got declined !!!!! He had to go BR as well as they weren't prepared to wait as some of the assets were abroad.

My advice....go the BR route. I did it 15 years ago and it was the best thing I ever did. It's the short sharp shock followed by the relief of the worry about the debts and eventual recovery. Mine was for 3 years so 1 year these days is a walk in the park in comparison. Though remember it will still stay on his/her credit file for 6 years.

Couple of other points. If car is on HP, OR won't take it as finance company owns car until debt is paid. It's secured finance. Same goes for furniture etc. Also OR has to allow "tools to do your job" so if car is essential to get to his/her work same applies.

If there is considerable excess money each month OR will probably go for an attachment of earnings so bear in mind that means his/her employer will have to know about the BR which means that other colleagues may find out. So I hope your friend isn't too shy about it. If it is a lady and she is embarrased tell her to come on here and I'll be happy to tell her anything she needs to know....yes I'm a girl too...lol And there are other ladies on this forum only too happy to help.

blind-as-a-bat_2

Rossa wrote: »

I agree with all the comments about an IVA versus BR.

There are 2 types of IVA, lump sum from the sale of assets or income based which would be more likely scenario for your friend. However, there's no guarantee that an IVA will be accepted by the creditors.

A friend of mine tried to go the IVA route Jan 08 and was refused it even though she offered 50% lump sum. That included the IP fees, by the way. Unless creditors with 75% of the debts all agree then you're into a BR anyway. She had one creditor who had the largest debt, a loan, who actually made the comment that they would rather see her go bankrupt than pay off 50% of the debt. I found this outrageous as via a BR they wouldn't have got anything (and didn't, so there ***** *****). And she had been a customer for 10 years and never missed a payment until made redundant.

Also the credit card companies basically sell the debt onto firms of auditors like KPMG so you are not even dealing with the company that you borrowed from in the first place. Like all "grey suit" types if you don't tick all their boxes then it's no way Jose!

And if you think that stinks a little then the lady at the IP told us she had another client who offered 100% repayment from the sale of very substantial assets but still got declined !!!!! He had to go BR as well as they weren't prepared to wait as some of the assets were abroad.

My advice....go the BR route. I did it 15 years ago and it was the best thing I ever did. It's the short sharp shock followed by the relief of the worry about the debts and eventual recovery. Mine was for 3 years so 1 year these days is a walk in the park in comparison. Though remember it will still stay on his/her credit file for 6 years.

Couple of other points. If car is on HP, OR won't take it as finance company owns car until debt is paid. It's secured finance. Same goes for furniture etc. Also OR has to allow "tools to do your job" so if car is essential to get to his/her work same applies.

If there is considerable excess money each month OR will probably go for an attachment of earnings so bear in mind that means his/her employer will have to know about the BR which means that other colleagues may find out. So I hope your friend isn't too shy about it. If it is a lady and she is embarrased tell her to come on here and I'll be happy to tell her anything she needs to know....yes I'm a girl too...lol And there are other ladies on this forum only too happy to help.

Sorry I have never heard of an OR goiing for, or needing to go for an atachment of earnings, unless an IPA or IPO is not kept up with.

There is an issue regarding the nil tax code, but as there is about 24 pages of reasons why someone may be given a nil tax code that does not give away the fact your BR either

spenderblender

I wish i had, had a friend like you looking out for me when I had to make this decision.
I would definately advise BR now after having been in an IVA which I decided to fail when I realised what scum these people are. My head was up my **** at the time that we entered into the IVA and now in hindsight regret doing it but, have finally seen the light.

Chloepad1

Certainly sounds like a no brainer. I really agree with previous posters in that most IVA's seem misssold and inappropriate. I abhor companies that prey on vulnerable people and make profit out of someone who is already drowning in debt. In this set of circumstances, I think bankruptcy may be the best option for your friend.

Helter_Skelter_3

So, little or no advantage in going the IVA route then?

Rossa_3

Thanks for that blind-as-a-bat. As I said, my BR was 15 years ago. I remember then being advised that should I earn above a certain amount I would have to pay the excess to the OR. Obviously my memory must be faulty as I assumed that meant an attachment of earnings as is done (or used to be) by the CSA for child maintenance.

Count_Waffellmuncher_III

Rossa wrote: »

Thanks for that blind-as-a-bat. As I said, my BR was 15 years ago. I remember then being advised that should I earn above a certain amount I would have to pay the excess to the OR. Obviously my memory must be faulty as I assumed that meant an attachment of earnings as is done (or used to be) by the CSA for child maintenance.

Sounds like just a mix up in terminology, It's well known that your income after essential outgoings and £100 is subject to the possibility that the OR can take what they like, 50-70% IIRC depending on the amount.
Called a BRO I think on here.

blind-as-a-bat_2

Count_Waffellmuncher_III wrote: »

Sounds like just a mix up in terminology, It's well known that your income after essential outgoings and £100 is subject to the possibility that the OR can take what they like, 50-70% IIRC depending on the amount.
Called a BRO I think on here.

No thats an IPA/O, if i read that right, but the termonolagy does get a bit confusing

A BRO/U is an extension of the BR restrictions, and can be up to 15 years

Count_Waffellmuncher_III

blind-as-a-bat wrote: »

No thats an IPA/O, if i read that right, but the termonolagy does get a bit confusing

A BRO/U is an extension of the BR restrictions, and can be up to 15 years

Ah yes, like for when people have been negligent and stuff.
Right so an IPA is a reasonable possibility then.:D