Should I end IVA and go Bankrupt?

Vworried_2

I've had an IVA since January 07 and was fine paying £560pm into it, I never faulted on payments and everything was going OK. But last December 08 I was made redundant from my well-paid job. I rang and advised the Administrator of my redundancy who said I could take a payment break of 3/6 months whilst I got a new job. Unfortunately nearly 5 months on I still haven't found new employment even though I'm desperately searching each day and applying for any jobs (I can't even get a cleaning job!).

I had been at my original job a few years so got reasonable redundancy money. In March I was still confident of finding employment and asked the Administrator to put a proposal to my creditors whether they would accept £11k as full settlement of the arrangement. Without going into too much detail here about figures, etc. he wasn't too confident the creditors would accept this offer as it would result in a return to them of only 34p in the £ as opposed to 54p had I kept on paying at £560pm. But as I said with the state of the economy and the increasingly unlikelihood of my gaining employment I thought maybe it was an option they might accept.

I believe a creditor's meeting is being arranged but I have come to the point now where due to using my redundancy money to live on the last 5 months, I now only have £12.5k in the bank, no job, no other savings or assets (apart from a car worth about £2k), and I privately rent my house. My monthly outgoings for rent, etc are about £1k so if I don't find a job within the next 4 weeks and the IVA take £11k then I'm homeless, etc.

Some friends have said I would be better off letting the IVA fail and going bankrupt? Has anyone on the Forum an opinion on this? If I do go bankrupt, won't the £11k and my car still be taken? Should I offer an option to the Administrator to continue paying into the IVA monthly (although I am now 4mths in arrears) and continue living off the money in my account until it runs out in the hope I find another job before this happens? I don't have any children or dependants and the only income I have now is £63pw Job Seekers Allowance.

In hindsight, should I have just kept on paying the £560pm out of the redundancy money? The only advice the Administrator's office gave me was to take the payment break.

I'm so desperate and don't know what to do. Life's really awful at the moment, sadly I lost my mum over Easter so have had that to deal with these last few weeks. I feel completely lost and can't stop crying at the desperate situation I've found myself in. I put my hands up and say of course the debts were all my fault and I was trying to pay them off, but I didn't see the redundancy coming and I honestly thought it would have been easier finding a job, any job, by now. I would really appreciate any advice the Forum could give me.

Thanks.

RAS

Welcome

It may be a bit difficult to get alternative advice from a debt charity but it would be worth asking them for advice.

With respect to MSE, this forum does not attract a lot of posters, so you may well get more useful advice on some things from the straght bankruptcy forum - no one there will encourage you to make a choice either way.

I am really sorry to hear of your recent bereavement and the timing is difficult. it is natural to be upset but given all the other stuff maybe you need a bit of extra support. Have you spoken to your GP. Even if you do not want to take anti-depressmants, they may be able to refer you to a local support network.

Do also talk to people on some of the other forums here - like money saving in families, the BR folk, basic debt free wannabee are good at reducing costs and thinking about alternatives - employment, benefits.

My own observation is that any job now attracts 50-70 applicants and good jobs possibly more. Basic jobs, even shift supervisors, now seem not to be advertised locally in the papers and at the job-centre, but in shop and workplace windows.

What is important its that someway you are able to get enough space to take whatever decision you do when you are ready rather than whilst you are still in the first throes of bereavement.

rog2

Hi Vw - I am a bit surprised at your IP's reticence to put forward your 'Full and Final' offer to your creditors as many creditors are usually more than happy to settle for a 30% return when the alternative of 'bankruptcy' could leave them with nothing.

Are you with an Insolvency Practitioner that was reccomended by one of the Debt Counselling Charities? If not, I would, as RAS has suggested, phone one of the charities, explain your situation and see what they advise.

You need to do something fairly quickly as 'Bankruptcy' is an almost inevitable 'next step' if your IVA fails.

I sympathise with you on the job search front - I ran my own business, until my bankruptcy, and have been searching for, and applying for, jobs for the last two years - it is very difficult out there, and unlikely to improve for many months.

mesirnosir

Hi Vworried

Sorry I haven't joined the forum sooner and I hope some [GOOD] progress has been made to your situation, but if not get some more free advice (Debt Advice Network, CAB etc)

I think your Supervisor should have put a variation proposal out alot sooner and if you are not happy about how the matter has been handled, get details of their complaints procedure. I appreciate how very, very worried you must be and I would also look at contacting the licensing body of your Supervisor (letterhead from the IP dealing with your IVA should have the details on there by law) and even the Insolvency Practitioners Unit of the Insolvency Service. There's nothing gets an IP moving more quickly than complaints increasing the liklihood of an inspection.

If you get this IVA out of the way, it could leave you with the option to seek a lower paid job that will meet your monthly commitments - even something supported by government schemes. You may even have identified a gap in the market yourself that you can get assistance with.

How great would that be if you came out of this with your own business!! There's a lot of warming success stories out there if you look.

I'll keep my eye on the forum now should you post any more queries.

GOOD LUCK!