IVA vs Bankruptcy now confused???

startingover

Hi all

We'll I've spent the morning at the CAB and now more confused than ever!

I would really appreciate some advice of people in the know.

Here's my situation I owe nearly 40k in debts not including a charge of £7k on my property too.

In my present situation I have a minus on my income.

But If I move out of my house (to live with boyfriend), give back my car on HP and go BR I will be left with about £300 surplus (this is post BR) now the CAB advisor thinks an IVA would be more suitable because of the large surplus.

I did explain that the only reason I would have a surplus is because my debts I had been paying at £700 per month had now been included in the BR therefore giving me more of a surplus.

She said that although I could go to court and file for bankruptcy and get it rubber stamped the OR could overturn the decision at anytime in the following 12 months as he could have an issue with my surplus and force me into an IVA.

Another question, can a mortgage shortfall and charding order be included into an IVA as I've read secured creditors aren't included?

The logic regarding going for an IVA which incidently charges £5K in fees is a bit screwed too if you me, its like I'm adding even more onto my debt.

I'm really mixed up now as what to do.

Deep_In_Debt

Hi
i don't think the charge or shortfall will be included as I think an IVA only applies to unsecured loans - I could be wrong though.

Have you had advice from CCCS, Payplan and National Debtline? They all offer free advice and will recommend what's best for you.

thecableguy12

Deep_In_Debt wrote: »

Hi
i don't think the charge or shortfall will be included as I think an IVA only applies to unsecured loans - I could be wrong though.

Have you had advice from CCCS, Payplan and National Debtline? They all offer free advice and will recommend what's best for you.

A shortfall is technically an unsecured loan now as it has no property to secure it against, so yes this can be incuded into an iva, i did many of them in my time in accountancy and insolveny

thecableguy12

startingover wrote: »

Hi all

We'll I've spent the morning at the CAB and now more confused than ever!

I would really appreciate some advice of people in the know.

Here's my situation I owe nearly 40k in debts not including a charge of £7k on my property too.

In my present situation I have a minus on my income.

But If I move out of my house (to live with boyfriend), give back my car on HP and go BR I will be left with about £300 surplus (this is post BR) now the CAB advisor thinks an IVA would be more suitable because of the large surplus.

I did explain that the only reason I would have a surplus is because my debts I had been paying at £700 per month had now been included in the BR therefore giving me more of a surplus.

She said that although I could go to court and file for bankruptcy and get it rubber stamped the OR could overturn the decision at anytime in the following 12 months as he could have an issue with my surplus and force me into an IVA.

Another question, can a mortgage shortfall and charding order be included into an IVA as I've read secured creditors aren't included?

The logic regarding going for an IVA which incidently charges £5K in fees is a bit screwed too if you me, its like I'm adding even more onto my debt.

I'm really mixed up now as what to do.

have you sold the prop or been repossed?

MIVAA

startingover wrote: »

She said that although I could go to court and file for bankruptcy and get it rubber stamped the OR could overturn the decision at anytime in the following 12 months as he could have an issue with my surplus and force me into an IVA.

That's the first time I've ever heard of someone being forced into a Voluntary Arrangement.

The OR will just attach an IPA to the bankruptcy to mop up any disposable income, but I don't believe he'll force you into an IVA.

An IPA will last for 3 years and typically would be less than you would be expected to contribute to an IVA over 5 years.

Also,

startingover wrote: »

Another question, can a mortgage shortfall and charding order be included into an IVA as I've read secured creditors aren't included?

Like the cable guy says, once a property with secured borrowings against it has been liquidated, any shortfalls will immediately become unsecured, and therefore become eligible to be included in either an IVA or bankruptcy.

Also,

startingover wrote: »

The logic regarding going for an IVA which incidently charges £5K in fees is a bit screwed too if you me, its like I'm adding even more onto my debt.

It's a fair point, and why many people would say bankruptcy is your best option, but it's your choice. If you would prefer to clear your debt through an IVA rather than bankruptcy, nobody should be able to criticise you for that. So long as you understand that through an IVA you will inevitably pay more back to your creditors.

MIVAA