IVA or bankruptcy?

jedi82

Hi, we have had our meeting with CCCSVA today in order to go through everything for the IVA and just need to get our documents together. However, me and my husband have been talking it through more and more tonight and are wondering whether we should just declare ourselves bankrupt?

The main reason for going for an IVA was to keep the house (and not have the stigma attached of being br) but our house is worth approx 195k and our o/s mortgage is 197k so we are in negative equity or thereabouts.

Would we still be able to keep the house if we went br and how much worse than an IVA is bankruptcy? I don't want to start any arguments but really do not know what to do.

We will speak to CCCS again but just wondered if any of you had any ideas?

Thanks
J

Charco_2

You would have to make a token payment to cover the equity and depending on how much you were considering offering towards your IVA you might have to make payments for three years (or just one).

It's worth speaking to someone directly about bankruptcy who can lay it down in terms specific to you... contact the CCCS again and ask why they think an IVA is better for you than BR - then come back on here to discuss the reasons!

skintflint103

Don't worry about 'stigma' BKs stopped going in the local rag last April unless there is a big local interest like a company going down or someone telling the OR porkies. A bk will only last max 12 months and you're both off the insolvency register 3 months after that. The OR calculates your house price by deducting 3% for costs. As long as you are certain that the house price is accurate, also your mortgave will have redemption costs too. A BK will not hold your house ready for a near impossible remortgage in month 54 either. although the IVA company will allow you to pay another 12 months payments if you cant get it. If you don't claim all of your (quite generous)living allowances in a BK you may be asked to pay a contribution to your creditors for 3 years, although you will only by BK for 12 months. P.S. nobody come to your house to assess your furiture etc it's all done on trust at the local court's office. Very rare to see a judge at your level (I assume you don't owe more than £100k unsec?)

So to recap IVA you will be locked in for 6 not 5 years and will need to make a payment every month reviewd each year or 6 months with Blair Endersby, stay on Insolvency register 6 years with bankruptcy type restrictions. Keep house no one knows unless they check on line in next 72 months. Chance to rebuild credit file after that..
BK out in 12 months possible payment for 36 months no restriction on house after the OR sells his interest to your mum for £1 . No one knows unless they check online in next 12 months. Chance to rebuild credit file after that..

Its quite hard isn't it? go to insolvency.gov.uk what is bankruptcy. good luck with whatever you decide

Hiya Charco though I'd stop by

Charco_2

It's good to see you again... sweeping generalisations and all!

Choo_Choo_4

jedi82 wrote: »

Hi, we have had our meeting with CCCSVA today in order to go through everything for the IVA and just need to get our documents together. However, me and my husband have been talking it through more and more tonight and are wondering whether we should just declare ourselves bankrupt?

The main reason for going for an IVA was to keep the house (and not have the stigma attached of being br) but our house is worth approx 195k and our o/s mortgage is 197k so we are in negative equity or thereabouts.

Would we still be able to keep the house if we went br and how much worse than an IVA is bankruptcy? I don't want to start any arguments but really do not know what to do.

We will speak to CCCS again but just wondered if any of you had any ideas?

Thanks
J

To bring it back to your post Jedi ... and see if Skint can comprehend this site is to try and help people, not poke abuse at others ...

I think you should discuss both options again with CCCS ...
As Charco (and Skint brushes over) pointed out - in bankruptcy you would have to make a token payment (CAN be as little as £1 but not always Skint) and this will mean that your property is secure...BUT you must address this at the beginning of the bankruptcy to ensure that the home is dealt with ... if you don't a creditor could look to realise any equity in 5/6 years time.

Weigh up your options and see which you think suits you best ... of course Bankruptcy will not last as long as an IVA and if you have a surplus income on a smaller scale then you may not have to pay anything at all in Bankruptcy - you should be able to determine this from the same I&E drawn up for an IVA...

I wouldn't worry so much about looking at the fees and allowing this to become a factor in making your choice - your IVA will pay a fee to the IP for the job they do and a dividend goes to creditors ...

The OR is not OBLIGED to pay a dividend in bankruptcy and most of the monies paid into it will be eaten up in fees too ... so look at what suits YOU best. Get CCCS to discuss both in detail and if they can't go to someone who will .... but do not pay for this advice!

skintflint103

Jed I appologise, go here mate its all there http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/home.pdf