IVA fail - Do not pass GO - Go straight to BR

johnny-b_3

Hi all. Firstly thanks to everyone who has contributed countless hours of posts to this forum. The information is invaluable and gratefully received.

My question: If the creditors (by value) decline to accept your IVA proposal, would they immediately move to make you bankrupt?

I'm in a situation where I have been considering BR but have just got a new job and will now be able to pay to clear some of my debts, so am considering an IVA. My circumstances are unlikely to improve so I have discounted a DMP - coupled with the possibility the creditors (six of them) may or may not agree to waive/freeze interest/charges with that option.

The BR fee was prohibitive but if they (the creditors) are going to make me BR following a failed IVA proposal, then I'd happily allow them to pay the necessary fees... Are there more far reaching consequences of the creditors applying for your BR than if you were to do it yourself?

I have no assets. £36k in personal debt. Just short of a grand per month income. Approx £200 surplus following CCCS debt remedy budgeting. If you were me, what would you do?

Also, because I have just started my new job, I do not have 3 months of payslips to show the IP. Would this matter? Would a copy of contract suffice? Also if the job was on a temporary or probationary basis, would this be a major sticking point or is it not something I would need to confide in the IP?

Thanks for reading. Hope you can help.

thechippy

It won't go to automatic br. They will probably just go the normal route of passing the debts to debt collection agency's etc. If a creditor br's you, the only difference is you would normally have a face to face meeting with the official receiver, rather than by phone. Dca's are easily dealt with sometimes and won't litigate unless they think they have a concrete case, or you won't defend (as most people don't know how and will fall at the first hurdle)

johnny-b_3

Thanks for your reply thechippy

Is there a period of re-negotiation on the terms of the IVA or is it a case of "you had your chance"?

Would you expect creditors to immediately pass off to a DCA as they have now been made aware of your potential insolvency, or would they have to follow the default route?

Thanks again

thechippy

They would normally follow the default route and if no joy, just pass it on to the scum dca's...

thechippy

Sorry,

Once you enter the iva, it is legally binding, but under some circumstances you can ask for a reduced payment for a month or two. Example; car needs some repairs - you need the car for work, so need the repairs done.
Some iva companies are better than others as well. They are not all equal in how they look after the iva for you!!

Charco_2

Usually the creditors wont reject an IVA straight out of hand... there is a fair bit of negotiation goes on behind the scenes during the 16days of the creditor's meeting.

You'll put forward your best offer, and the creditors will either accept it or modify it... it's up to you then to agree to the modifications. They CAN reject the proposal but usually they'll only do this if they think it's taking the mick!

skintflint103

I'm amazed you saying that the BR figures are prohibitive they are max £510, or £360 are your looking at the 'comparison of fees' on and IVA proposal? Confused ?I'm not surprised. Unless you've got masses of assetts to cover those fees you only pay £510 or 360.

Choo_Choo_4

I'm thinking that if you are only considering an IVA then you wouldn't have gone as far as getting the outlined proposal from IVA Company yet that would show the Comparison of Fees - so you might be wrong here skint :eek:

If you have just started new job then the contract showing monthly/annual salary should suffice for now and once you have pay slips they might request those ...

I presume that you live in England, Wales or NI - so it is an IVA you're looking at ... and if it was to be rejected at Creditors Meeting then as advised above the creditors would not automatically pursue your bankruptcy - it would simply continue as is until such times as debts are passed on to DCAs ...

If Scotland - then it's a Trust Deed and if this fails to become Protected then you would automatically go on for Sequestration (Bankruptcy in Scotland)

Bankruptcy fees are not huge - so if you are seriously considering an IVA or Bankruptcy then it wouldn't be too long before you'd stop paying your creditors (if you haven't already done so) - and you would have the fee in a few months (or you should have if you're saying you've gfot £200 per month spare)

That isn't to say that I am recommending Bankruptcy over IVA however.
Look into it further - get the advice from the professionals and then make YOUR OWN decision based on the information they have given you.

If you're unsure then come back on here and I'm sure everyone will be happy to give their tuppence worth