Help for a newbie

choc2497

I have been searching on Bankruptcy forums for a few weeks, and finally decided that you seem the most friendly, supportive bunch so I would like to come and pester you if you don't mind!
My husband and I are currently filling in the forms to apply for Bankruptcy and the local CAB are going to check them over for us at a meeting next Tuesday! We were in an IVA but failed it after our annual review last week, reason being I had taken out additional credit and wasn't supposed to have any other credit. We were really stupid not to realise this, and should have read the small print at the time, but were so relieved to be sorting things out, we just went along with anything. Noone said we couldn't have credit (even though now I realise it is stupid to think I could when the reason for an IVA is to get debt free), and when I opened a new bank account after starting the IVA they gave me an automatic £500 overdraft. I used this every month just for everyday essentials and groceries. I also have a few catalogue accounts and a Barclaycard that I had lay dormant from years before the IVA. They offered me credit limits, and I foolishly used it to buy the kids clothes and Christmas presents. I know! What a mess! Anyway, we were managing to pay the minimum payments to the creditors as well as the £730 IVA payment every month for the last 3 years, but this year at the review, they asked for bank statements. They have only ever asked for pay slips before, so if they had asked for statements earlier they would have noticied the credit earlier. They contacted us to ask about Barclays and my overdraft, and after the meeting told us the IVA had failed, and there was nothing more they could do for us!
One of my questions now, is Do I pay the overdraft back to LLoyds TSB out of the £730 a month spare and my other creditors, or do I just put this money towards our bankruptcy fees? If I stop paying will the OR think I am even more irresponsible than they probably already will do? My third baby is coming up for one and I am starting back work in September full time, even though I have been diagnosed with post natal depression and rheumatoid Arthritis (only 30). God we are in such a mess! Any help appreciated, Thanks

skylight

Put it towards your BR fees. If BR is the only option, then stop paying the IVA and any other debts.

Open new BASIC bank accounts - the Co-Op cashminder is a good one, and get that ready to go for when you are BR, get any income paid into the new account. Its best to get this done ASAP and before BR to prevent any post-BR issues.

You are not allowed to pay anything back or any one creditor - the OR takes a very dim view of you giving whats called preferential treatment to creditors - so don't do it.

Post up an SOA here too - BR allowances are far more generous than in an IVA, so hopefully you will be paying back a bit less in an IPA.

philnicandamy

Make sure as well IF you decide on bankruptcy as an option the court you attend "may" need an IVA failure cert....some do some dont

dalip

You do not say who you did the IVA with. I would suggest you contact national debt line or cccs(numbers in my sig) to see if bc really is the only option left to you. Dx

choc2497

Thanks for all your messages. The IVA was with Debt Lifeboat (part of Baker Tilley). The CAB explained that we probably could do another IVA but it would be another 5 years and explained bankruptcy may be the better option. Thanks for the bank account idea, but I am worried about the fact that if I pay my wages into the new account it will be frozen after we go bankrupt (even if only a basic bank account). I would prefer to do this before we go bankrupt if we could and I like the idea of the co-op, however the co-op was one of my creditiors with a 'smile' credit card as part of the iva. Will they still give me an account, and if so, will they freeze it when the bankruptcy comes through and they know they are a creditior? I will post a SOA as soon as we complete it. I really appreciate all your help. Thanks xxx

kutiez2005

I've opened a co op cashminder account before I go br. When I opened it I asked them how it would be affected by my br & they said most of the time the accounts don't get frozen but those that do are only likely to be frozen for about 24 hours anyway. They also said that it is really easy to get this account as you don't have to pass the normal credit checks. Basically just have to be able to verify that you are who you say you are and you live where you say you live and thats about it.