I really need more Advice iva or bankrupsy???????

summer19

Hello,

I previously asked about iva on here, I am now unsure if it would make more sence to go bankrupt???????? Can anyone advise me on the benefits for both and who thinks what one is best, our debt is approx £50k i am at my witsend I have not slept for weeks properly I just want this sorted out.

Please help?????

Many thanks.xxxx

Nargleblast

Have you posted this on the bankruptcy board for info on the pros and cons of bankruptcy from people who are or have been bankrupt? And any reputable debt counselling company will look at your situation and tell you what options you have and what the pros and cons of these options are. But in the end it is you who has to make the decision and make it work. No one solution is better than another, whatever you have to do to get out of debt you have to do, and on the way you learn valuable lessons about how to avoid getting into debt again.

Charco_2

Sort of well said there Nargle...

"No one solution is better than another, whatever you have to do to get out of debt you have to do"

I do like to think people at this stage still have options - even if some of those options are more appealing than others - but it's true, do what you gotta do!

In my mind there are three main solutions (not including "suck it up princess and ride it out")

1. Debt Management - for me this is a short-term solution that is all too often offered as a long term solution... a VERY long term solution! (19 years did someone say today!?) If you're currently under extreme pressure from your creditors to pay money you cannot afford BUT you think things will take a turn within the next year or so then go for this...
It's nice to get the creditors off your back while you take a moment to re-compose yourself. But don't get used to the respite because your creditors will still be in the background looking for their money.

2. IVA - this solution is a little stronger than DMP, it's a long-term solution (as in it will have a long-term effect because in almost all cases it is shorter than a DMP). It sounds like it must be more serious than a DMP too because it is a formal arrangement legally binding but in actual fact it will have less of an impact on you because it will only last for five years, and one year later it's off your credit file. A DMP will have ongoing defaults for 8 years or 13 years or however long it takes to pay off and then takes a further six years on top of that for the defaults vanish off your file.
Regardless of how much you pay back however, after the agreed timescale the remainder of your debt will be written off.

3. Bankruptcy always sounds like the most serious of the lot but really that's just a historical boogey man name it has earned for itself seeminly from the time of Charles Dickens or some such rubbish. There's no real stigma on it anymore. If it's your best solution it's your best solution!

It really is up to you but don't make your decision until you've discussed all the options - a good IP will discuss all your options with you for free.

That said, some people opt for DMPs when an IVA would be their better option or an IVA when Bankruptcy would have suited them better simply because they want to try to pay back more of their debts - it really is a choice.

Sorry - that may not have been much help at all... it's easier to explain when you have figures to work with! For example as well as the information you have given here:
- do you have a home (mortgaged) or other asset to protect?
- what is your monthly income? And expenditure? And surplus?
- is the debt all yours? your partners? Joint/shared? how much each?

Last thing i will say here is - try to get some proper sleep, it's really not worth risking your health over. There are solutions available and there's not a lot your creditors can do to you especially as you're tryng to sort it out. You've taken one of the hardest steps which is to face up to your debt and go looking for a solution... might take a few weeks or a couple of months but you will sort this out!

Good night!

(who am i to be telling someone to get a good night's sleep, it 00.30am!)

memberme

Dear Summer our debts were around 200K (cards, northern rock and loans) so believe me as I found, yuor debts are not going to shock any asvdisors you speek to. You decision will be based around your income and available finances to repay. If you have none then BR. I would avoid DMP with the amount you owe as you'll be at it for ever, although, as with myself, some IP's may advise you start that route as it looks better at the future IVA creditors decision meeting. I usd Cleardebt run by David Mond (you'll find him on web searches as he's been on tv and well known). My debts are huge but they spoke to me as a human, were very efficient and removed all my anxiety after one phone call. Either David or Mike Morgan (same company) are great initial contacts. Have all your paperwork ready before you call anyone. Best wishes Memberme

summer19

Thanks for your responses they r very much appreciated, in reply to charco we only have my husbands income as I suffer from a illness called m.e, that is between £2000 and £2200 a month, we have a morgage of £141,000 and the house would be valued between £130,000 and maximum £150,000. We have 2 kids and obvious expendisure it leaves a £200 maximum left over, we have a car which we took a bit on finance there is 2 years left and thats £133 a month. if we went br would we loose the car its worth £7000, if we sold it and paid the hp of would that effect the br/iva whatever we decide is the best for us???? I really dont know what is going to be best cause I just want this sorted, I know u said try to sleep but its easier said than done when u try and try but just cant rest my head is all over the place and your right this is making my illness a million times worse than it was already. if there anyone with anything that they think will help I do appreciate it.xxxx

Charco_2

Sorry, I do realise it's easier said than done but there are solutions available and you'll have one soon. There's not a lot your creditors can do to you so long as you're doing your best
1. They should be ashamed of themselves for the pressure they put people under and
2. They should accept a bit of responsibility themselves for the reckless manner in which they lent money out will-nilly for years

So if you had an IVA you would be able to pay £200 a month for 24 months and then about £330 for 36 months after the car HP ended. (Now, are your SURE the finance agreement was for Hire Purchase and not just a loan for a car, does the agreement actually say HP on it? You'd be surprised how many people get that wrong... a loan for a car isn't the same as a loan secured on a car)

If it is HP, then obviously you keep paying it until the end of the agreement. You would almost certainly be allowed tp keep this car then... however a problem would arise if there is a balloon payment to be made at the end of the HP agreement! (so check that out!)

I wouldn't advise selling the car because all that's going to do is pay the HP people back their money and then you'll be left with the probelm of needing a car and only having £3,000 or so to aquire one that would have to do you for a long while (5 years in an IVA, 19 years in a DMP, i think about 3 years in Bankruptucy but you'd probably be freed up sooner than that). Far bettr hang on to the car but do check out the ballon payment!

Is your mortgage on Capital Repayment or Interest Only?
Even if it looks like you have no equity now, in an IVA there will be a fourth year valuation to take at look at your assets to see what might be available for your creditors. On a house worth £150,000 and a mortgage of £141,000 you would have effectively no equity to offer your creditors as you would only be able to remortgage to 85% of the value of your home... 85% would be a mortgage of £127,500. Even if your house rose to £160,000 in four years time you would only be able to re-mortgage to £136,000 which would hardly be worth it!

summer19

Thanks that is good advice about the car, I agree it is better to keep it as we paid £15,000 2 years ago so we wont get anywhere near that and we will need another car, the morgage has been put dowm to interest only we r in a fixed morgage it ends next jan, woulkd your advice be to go with the iva over the b/r????

Many thanks for taking the time to contact me.xxx

Choo_Choo_4

Have a look at your car agreement again Summer to check if it is HP.
If anywhere on the agreement it reads:

Termination: Your Rights followed by brief explanation

Reposession: Your Rights followed by brief explanation

Then this IS a Hire Purchase agreement but a lot of companies give customers the impression that they are entering into a Hire Purchase agreement but without these clauses it is just a simple credit agreement - like a bank loan and is entered into IVA/Bankruptcy and the monthly contribution forms part of your disposable income - so it is important to check this out and clarify just how much you can afford to pay your creditors each month.

Either way - don't sell the car. You need this to take the kids to school, for your husband to go to work so without it you'd be worse off ...

Do you receive any benefits Summer that increases your monthly household income - obviously there's CHB but any Tax Credits or Income Support?

summer19

Also how can I find out if its a hp or just a car loan, we got it from the garage we bought and its with bank of scotland.

Thank you.xx

Choo_Choo_4

Check the previous post Summer ... think we might have posted around the same time x

summer19

Thanks, I will check on the car. We dont get any other income benefits, We owe them money!!!!!