Divorce and the IVA

lou2222

I have 3 small children and a husband who smashes things.
I am seriously considering divorcing him, he is a high earner with credit card and tax debts of around 140k. He is taking out an IVA, in his name only to clear the debts which is due to become final on Thursday.
My question is from my personal financial point of view is it better to encourage him along the IVA route or let him go bankrupt.
Sorry if this sounds heartless but I am just thinking of me and the kids.

Charco_2

It's not heartless, it's reality i suppose!

I dont think there's a great answer to this! He has tax debt so i'd assume he's self employed, going bankrupt would affect his ability to earn. Going into an IVA wont affect his earnings but it will take up all of his disposable income after household expenses are taken into account. If you leave him during the IVA he would be faced with the possibility of not being able to afford the payments to the arrangement (or not paying you).

If you divorced him first then the cost of CSA would be an allowable expense of his IVA...

Are the arguments and smashings related to the stress of debt?

lou2222

Hi he is self employed, he is a contractor, his limited company has gone bust and he now invoices through my limited company.

His tax liablility is a personal one. The VAT and Corporation Tax are seperate issues his Accountant is dealing with.

Can the IVA be renegotiated if maintenance has to be paid?

The smashings probably have a great deal to do with the debt but I have tried to help him for 4 years, I took over the finances about 6 months ago and sorted out the IVA so things have got easier for him. We have also tried relate etc but he is not that interested and things are not changing. He smashed up the Dining Room on Friday and I have had enough.

Charco_2

Renegotiating the payments in an IVA CAN be done but there's no guarantee the creditors will accept. Might be best to come to an agreement now and see if it can be included in the original draft.

Speak to the IP for definite, despite the cynicism on here from the IP/IVA haters, your IP has an interest in creating an agreement that will last the duration and be a success!

sieve

I haven't got much to add to this lou2222 other than I am really sorry to hear about your and your kids' situation - I hope he sorts himself out soon as "a smasher" is really something you can do without at the best of times, let alone when other things are going wrong too.

Just as an aside, I would also be surprised if HMRC agreed to an IVA as I was told they probably wouldn't for me when I was in that situation, so I declared myself bankrupt.

Good luck anyway, I hope it works out.

Cheers

S

Charco_2

HMRC aren't all that bad - some companies they work very well with! There is a company that kind of specialise in self employed cases

lou2222

Thanks so much everyone. HMRC and CC have said yes apparently so it will go through tomorrow. I have spoken to the IP and a Divorce Lawyer and they are both a bit vague, an IVA can be changed and its better than letting him go bankrupt!
I think I will just have to watch it go through and see what happens..
Once again thanks everyone for your help