What is better for me - IVA or BR?

devilsphoto

Hello

I am a 24 year old single guy earning around 26k per year
I got into quite a bit of debt over the past 4 years since moving out of my parents and now I am struggling to pay it off

I owe around 26-27k today
15k is bad debt with collection agencies and the other 11-12k is a loan with the bank and Credit card.

Whilst I can just about afford the payments each month, I will be paying the bad debt for about 30 years and the bank over the next 6 years and thats assuming I dont get made redundant!

I have three choices

1. Stay paying the same amounts, wait until I have paid the bank loan (5 years), hope I keep my job and then up the payments for the bad debt when I can

2. Do an IVA - Unsure if all creditors will agree

3. Go Bankrupt

I know the up and downsides to an IVA and going Bankrupt

The bad debt creditors keep hassling me to up my payments every 3 months which I cant do and I am going inot my overdraft more and more each month.

I work for local government so my job is not safe at present and I have no idea what the best thing to do is!!

Bankruptcy seems like the best option as I could be discharged in a year, stop making IPA payments after 3 years and rebuild my credit history after 6 years.

There is no chance of a payrise at my current job for at least 2 years so I would rather do something about the debt now

Stupidly I got a loan after defaulting on a previous loan and credit card so suspect I will get a BRO/BRU or worse :S

Thank you

alastairq

hi, and welcome to the site.

Firstly, in order to declare insolvency, you would need to prove insolvency.

Which means, proving that, after all reasonable living expenses are deducted, you have insufficient income to meet your debts.[or, 'service' them]

From what you have said above, it seems you are 'servicing' your debts...but have baulked at the prospect of spending the rest of your earning life paying them back.

In fact, are you in reality..''insolvent?'


You do appear to be on the debt spiral .....since you mention eating into your overdraught be ever greater amounts each month.

Firstly, you need to get a meeting with one of the debt charities... stickies above.

It may also help to produce a SOA...maybe for some of us to comment on?

This will help establish whether you are truly insolvent...or not?

devilsphoto

Here is my SOA

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1580
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1580

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 550
Management charge (leasehold property).. 0
Council tax............................. 117
Electricity............................. 75
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 15
Mobile phone............................ 0
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 20
Groceries etc. ......................... 200
Clothing................................ 40
Petrol/diesel........................... 120
Road tax................................ 15
Car Insurance........................... 65
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 25
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1324


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Wescott........................8000......30........0
Cabot..........................1000......20........0
Equidebt.......................2200......20........0
Overdraft......................1300......10........0
CC.............................700.......25........0
Loan...........................10000.....250.......0
Other..........................2500......0.........0
Total unsecured debts..........25700.....355.......-


Monthly Budget Summary
Total monthly income.................... 1,580
Expenses (including HP & secured debts). 1,324
Available for debt repayments........... 256
Monthly UNsecured debt repayments....... 355
Amount short for making debt repayments. -99

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -25,700
Net Assets.............................. -25,700

MichMoor

Not a expert but I think you will have to have done a lot worse than that to get a BRO.

Also I notice you work in Local Governmant and your job is at risk. So am I and my job is at risk as well, my situation is I have split from my wife cannot afford the mortgage which will be repossesed with probably a huge shortfall which will may trigger my bankruptcy.

I have made enquiries with my local governmant employer would going BK affect my job, assuming I manage to keep my job. The answer is since I do not manage any significant budgets it would not.

Just thought I would let you know in case you were worried about BK and your job, should you not get made redundant.

Good luck

fermi

alastairq wrote: »

Firstly, in order to declare insolvency, you would need to prove insolvency.

Which means, proving that, after all reasonable living expenses are deducted, you have insufficient income to meet your debts.[or, 'service' them]

Not. true.

You are insolvent if you are unable to meet all your debts as they fall due.

With £15K of debts with debt collectors (+the rest) the OP seems clearly insolvent under those definitions.

fermi

MichMoor wrote: »

Not a expert but I think you will have to have done a lot worse than that to get a BRO.

Depends on the circumstances, but for most part I would agree.

Sunnylooloo

Ugh it is really hard. I do think as already been suggested seek some help from one of the debt charities (you can see the details in Fermi's signature)

I struggled for a long time with my debt (robbing peter to pay paul - huge over draft.... using any odd amounts on CC to get by)

After lookin into everything (in great detail) I finally decided to do my own DMP - which has been running for a year now.

As what has already been said if BR could affect your job you do need to think carefully and also about the huge impact it does have on your life (you can see that by reading peoples experiences on here)

I dont know much about IVA's

Are you in agreements with your creditors at the moment to make reduced payments? (it does look like you are with some of them)

Good luck but please do seek some advice from the debt charities

LL