will an iva work

Nargleblast

You say you have been on to CCCS - did you do the online debt remedy or did you actually speak to someone there? They will advise you of the various solutions and which are appropriate for you.

With a debt management plan the idea is that you pay off all the debts over a period of time either doing it solo or through an organisation ( like CCCS, Payplan and others ) that handles it all for you. This could take several years depending on the level of debt, your monthly surplus income, and whether creditors stop adding charges or interest or not. Many creditors will not be happy having to wait ten years or so to get all their money back so will probably sell the debt on to a third party.

An IVA is a fixed five year arrangement done through an insolvency practitioner (IP) and rubber stamped by the County Court - it is legal and binding. Your creditors stand to get a good proportion of their money back compared with other methods, and they are not allowed to hassle you. In year five you will be expected to try and remortgage so that some equity can be freed up and paid into the IVA to finish it off, but your IP would go through all that with you.

With bankruptcy your creditors would get little or nothing of their money back; some say it is the best thing they have ever done but that does not mean it is an easy solution for you. I suggest you look at the bankruptcy section and post on there for more info if you haven't already done so.

Good luck, there is a solution that is right for you, you will be debt free eventually.

bigsteveo

cheers nargleblast,
this whole situation is so so bad for us its unreal. the only thing about getting equity at the end of the five years is i probably wont have any with the way the credit crunch has gone.

does this also apply to bankrupcy ant the end of that period do they come looking for more money?

cheers again:cool:

Nargleblast

As far as equity is concerned, none of us know what the housing market will be doing in five years time, after all who would have thought five years ago that some of the biggest names in banking would get into such deep water? House values could rocket or plummet, who can say? If you took out an IVA and you had no equity to release five years down the line, then your IP provider would discuss other options such as obtaining some cash from a family member to finish off the IVA, or extending the IVA for another year then completing it.
As far as bankruptcy is concerned I believe it is done and dusted after a couple of years or so but don't quote me on that, the folks on the bankruptcy board are better placed than I am to advise. The important thing is that you look into all options and get as well informed as possible before making up your mind, then sticking to what you have decided and make it work for you.

Walter_J

bigsteveo wrote: »

please excuse my ignorance but what is an ipo and how much does it cost to go bankrupt???

thanks again

the other thing is do you have to pay anything back i mean how does the whole bankrupcy thing work i know i havnt the worst debts but i havnt gotta clue about any of this

An IPO is an 'Income Payment Order' An IPA is an 'Income Payment Agreement'. They amount to much the same thing.

When you go bankrupt, your household income and expenditure is assessed and if you have a substantial surplus left over each month after paying your reasonable living costs, a proportion is taken for distribution to your creditors. In your case your mortgage payments would be part of your allowed expenditure. IPOs and IPAs last normally for three years. Most people try to keep their surplus to under £100 per month, as below this threshold no IPO will be made and you will not be required to pay anything.

The fees for going bankrupt are currently around £450 each. This may sound a lot but your unsecured debts are written off completely. In your case the only debt you will have will be your mortgage.

The standard period of bankruptcy is currently 12 months. After that you are discharged and your debts have gone. Your credit rating wil be goosed for a while but I'm sure the last thing you want is more credit! You don't need to worry about getting a mortgage because you've already got one - and your negative equity means that you won't be moving for a long time..

bigsteveo wrote: »

this whole situation is so so bad for us its unreal. the only thing about getting equity at the end of the five years is i probably wont have any with the way the credit crunch has gone.

does this also apply to bankrupcy ant the end of that period do they come looking for more money?

No.

Normal procedure if there is no equity at the time of bankruptcy is for you or a family member to buy the 'beneficial interest' in the house from the Official Receiver for a nominal sum. The house could double in value after your discharge and the OR could not touch it.

The same goes for a windfall such as a lottery win. Win a million quid the day after your discharge and you get to keep the lot!


I suggest you study the bankruptcy forum and ask further questions there

mysterio_2

Walter_J wrote: »

An IPO is an 'Income Payment Order' An IPA is an 'Income Payment Agreement'. They amount to much the same thing. actually NO they are not...an IPA is an (arrangement) an IPO is when the OR takes you to court if you dont agree to IPA terms for a judgement

When you go bankrupt, your household income and expenditure is assessed and if you have a substantial surplus left over each month after paying your reasonable living costs, a proportion is taken for distribution to your creditors. In your case your mortgage payments would be part of your allowed expenditure. IPOs and IPAs last normally for three years. Most people try to keep their surplus to under £100 per month, as below this threshold no IPO will be made and you will not be required to pay anything.

The fees for going bankrupt are currently around £450 each actually its now £510. This may sound a lot but your unsecured debts are written off completely. In your case the only debt you will have will be your mortgage.

The standard period of bankruptcy is currently 12 months. After that you are discharged and your debts have gone. Your credit rating wil be goosed for a while (6yrs) but I'm sure the last thing you want is more credit! You don't need to worry about getting a mortgage because you've already got one - and your negative equity means that you won't be moving for a long time..



No.

Normal procedure if there is no equity at the time of bankruptcy is for you or a family member to buy the 'beneficial interest' in the house from the Official Receiver for a nominal sum. The house could double in value after your discharge and the OR could not touch it.

The same goes for a windfall such as a lottery win. Win a million quid the day after your discharge and you get to keep the lot!


I suggest you study the bankruptcy forum and ask further questions there

just an addition

Walter_J

Oops!

I didn't know I'd strayed into Pedant's Corner!