Bankrupt or IVA - the truth please

abxyz

Hi Guys/Gals,

I have about £53 k of unsecured debt mainly from a business that went under from no fault of my own.

I have also had my marriage fall apart in the last year when my wife left in which I have been left with my baby girl to bring up.

I am very close to having a creditors meeting in order to process the IVA. I can just afford to pay it however I would have to cut back on essentials as have the costs and responsability of my daughter.

Basically I am not too keen on spending the next 5 years paying every little ounce of money I have left into an IVA. I would rather have this dealt with sooner and be able to spend the next few years enjoying my daughter grow and being able to provide a little better for her than if I was in an IVA.

I am therefore considering going Bankrupt. I have spoken to my IP about this and they are very helpful.

Basically I have £53 k debt. No assets at all. I have a regular professional job which would not be affected by going BR.

Should I just go BR and move on? I don't really have the disposable income for an IVA and therefore am hoping I would not have to pay anymore into an IPO or IPA accept any 0 Tax Code payments if any!

Some advice please if thats OK. Basically how stringent are IVA's on your monthly expenses once you are into it. How bad is the Bankruptcy? I have literally nothing to loose and don't mind going to court if this will put this to an end.

Finally what restraints will the official Receiver place on me if I have no disposable income. Will he/she leave it at that?

All advice welcomed

Regards and Thanks

Totally_Skint

First of all welcome to the forum. There are loads of excellent people on here who give great advice so never be afraid to ask.

IMO if i was you i would seriously consider going BR. The reason im saying this is because i went bankrupt owing £50k worth of unsecured debt, and the weight that was lifted off my mind when it all went through was fantastic. In truth it was the best decision I could have made. There was no way i was able to pay all of the £50k back. CCCS told me that to do a DMP it would take me 40 years!! IVA would take 5 years but they would take nearly ever penny i had over that period.

You have no assets so i think its a no brainer really.

Let us know what you decide. Good Luck.

dalip

Hi and welcome

I tried to do an IVA prior to my bc and the allowances are mega strict. My main reason for opting for IVA, was because of the stigma attached to bc.

Anyway to cut a long story short i had no opition but to petition for my own bc. It was tough emotionally but the pressure of the debts was so great that it was a big relief when the calls/letters ect from creditors stopped.

My OH is now doing a DMP(for his debts) so to be honest i am not that much further on than i was almost 2 years ago.


BC is not easy by any means but it is a lifeline for those needing a second chance.

If the OR feels you have no disposal income they may ask you to fill in another I&E sheet just before discharge but then that is it. The allowances in bc are by far very generous compared to IVA/DMP.

Just for the record my IVA company said we had £500 a month surplus income for an IVA, when i went bc i had £118 but then i did not claim full allowance for most things as i was still wet behind the ears.lol


You could try posting up an I&E sheet for s to have a look at to see if any IPA may be applied.

Any questions fire away. BC is a big step so please make sure you have as much info as possible before you make that life changing decision. Dx

Trollfever

I have literally nothing to loose and don't mind going to court if this will put this to an end.

=

Bankruptcy.


.

tigerfeet2006

If you put your SoA up as it has been submitted for the IVA someone will check it over and show you how the OR may look at it.

http://www.makesenseofcards.co.uk/soacalc.html

format to MSE and then C&P it in a post here.

sniggings

I think the only differance between the two is a iva is meant to help you keep your house if on a morgage(and not in NE) but as the payments on them are so high and in a lot of cases I've read about, hard to change the amount set if your income was to change or they just refuse even to look into a change I am amazed that as many IVAs are started but loads will end in BR anyway.

abxyz

Thank you for all your support so far everyone.

I forgot to mention I am 28 at the moment so going BR doesn't daunt me long term as I feel I have time to bounce back. Just feel an IVA with hold me down in a time when I should be developing my career etc etc. Also as I look after my baby daughter I have allot of outgoings with her clothing, food and all the other bay things along with child care etc etc. I can quite easily justufy not having a disposable income to the OR, well I reckon at least maybe you guys and gals could confirm that.

tiger feet what is S&A. Dalip I will post my I&E. Forgive me for sounding cheeky but are there things you can put down for expenditiure or ways you can tweek (increase albiet temporarily) your outgoings to avoid an IPO or IPA. Or am I speaking out of line here.

Thaanks again in advance. I hope I can return the favour to others someday :-)

richie999

hi, firstly welcome to the board. I am currently in a IVA. When I first sorted my IVA I was told to pay £336 per month, I madea few payments however my oh lost her job seeker allowance and we fell behind in payments as we were and still are struggling to pay off other priority bills. I am now going to be petioning my br on the 14th of this month as the IVA sometimes and in my case underbudgets or cuts it on a fine line to get the IVA passed by ceditors as the IVA has a vested interest in getting it pass in order to recieve there fee and survive as a company themselves. I would suggest bankruptcy as your option as you said yourself you can discharge your debt and then get on with your life and enjoy it with your newborn baby. Hope this helps and let us all know how you are getting along :money: richie

almost_free_2

Hi, I went bankrupt this morning, my situation was very similar to your own. I took advise from a friend who also happens to be an IP. We discussed IVA of course but he felt the lasting affect on me and my family was just too higher price to pay and from a financial point he said it was an absolute 'no brainer'. Like you my business went through no fault of my own and its not easy to say the least, the additional pressures / situations you're having to deal with must make it unbearable. The main thing I remember my mate saying to me was that bankruptcy is there precisely for people in my (and your) situation, to stop beating my self up about it, get it done and start living again. So far the advise he's given me has been spot on and I feel better today than I have for months.
For what its worth I sat in the court this morning next to a girl who had been on an IVA for 6 months and couldn't stand it anymore. She was at least as relived as me to be going BR!!! Good luck whatever you decide.

abxyz

Please see my statement of affairs. please bare in mind due to all my outgoings I am only living in 1 bed flat at the moment with my daughter. I have allot of travel costs as commute to work. also have child care costs. Does anyone think I will be subject to an IPA?????

Monthly Income Details[/b]
Monthly income after tax................ 2300
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2300
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 475
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 40
Gas..................................... 50
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 30
Mobile phone............................ 40
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 12
Groceries etc. ......................... 250
Clothing................................ 22
Petrol/diesel........................... 300
Road tax................................ 20
Car Insurance........................... 71
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 650
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 22
Life assurance ......................... 35
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 50
Total monthly expenses.................. 2249

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
business debt..................60000.....1300......15
Total unsecured debts..........60000.....1300......-

Monthly Budget Summary
Total monthly income.................... 2,300
Expenses (including HP & secured debts). 2,249
Available for debt repayments........... 51
Monthly UNsecured debt repayments....... 1,300
Amount short for making debt repayments. -1,249
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -60,000
Net Assets.............................. -59,000

tigerfeet2006

abxyz wrote: »

Please see my statement of affairs. please bare in mind due to all my outgoings I am only living in 1 bed flat at the moment with my daughter. I have allot of travel costs as commute to work. also have child care costs. Does anyone think I will be subject to an IPA?????

Monthly Income Details[/b]
Monthly income after tax................ 2300
Partners monthly income after tax....... 0
Benefits................................ 0 Do you not get Child Benefit? Tax Credits? etc.
Other income............................ 0
Total monthly income.................... 2300
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 475
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 40
Gas..................................... 50
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 30
Mobile phone............................ 40 put with land line £50 total
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 12 unless needed for work it will have to come from surplus.
Groceries etc. ......................... 250
Clothing................................ 22 £80
Petrol/diesel........................... 300 start keeping reciepts as you may have to prove this amount as it is horrendously high.
Road tax................................ 20
Car Insurance........................... 71 this is quite high as well
Car maintenance (including MOT)......... 20 £30
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 650
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 22
Life assurance ......................... 35 the OR may have an interest in this and you may have to buy it back from him.
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 0
Holiday................................. 0 £40
Emergency fund.......................... 50 not allowed
Total monthly expenses.................. 2249

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 1000

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
business debt..................60000.....1300......15
Total unsecured debts..........60000.....1300......-

Monthly Budget Summary
Total monthly income.................... 2,300
Expenses (including HP & secured debts). 2,249
Available for debt repayments........... 51
Monthly UNsecured debt repayments....... 1,300
Amount short for making debt repayments. -1,249
Personal Balance Sheet Summary
Total assets (things you own)........... 1,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -60,000
Net Assets.............................. -59,000

If you wear suits to work then you could add dry cleaning £10. Do you pay professional/union fees? Do you have breakdown cover?

Make sure your contents insurance includes accidental damage. Make sure your car insurance is fully comp.