BR or IVA - help please

fergusor

Hi guys,

Looking at going br in the next month or so but also considering iva.

One thing I'm concerned about with br is cars. My partner and I have a car each that are both financed in his name but one is registered to me.

If I was to go the iva route, would the finance payments that I contribute to (we pay half each on both cars), along with fuel, tax, maintenance etc be allowed? In other words would I still be able to include my payments and any left over after other expenses be considered for the iva?

And what happens if the creditors don't agree with the figure, would I be forced in br? And how long does it take to set up?

Want to get all options before making the decision of which path to choose.

Thanks,
Richard.

dancingfairy

I guess it depends on whether one or both of you is doing an IVA/Bankruptcy with regards to the cars?
Also bear in mind that any joint debts that if one of you were to go into bankruptcy the other person will have to pay for all of the debt - ie there is no well I've paid my half etc - if one person is bankrupt then the creditors willgo after the other person for the full amount.
It might be worth asking about the cars on the bankruptcy board?
With regards to choosing an IVA or bankruptcy there aren't many advantages as far as I can see - o.k I believe it's free for you to set up but you have to maintain the payments for 4 years? I think and you will be expected to release equity in your house or attempt to release any equity if there is some there.
With bankruptcy they will assess a house at the 2 year 3 month point I think but if it is in negative equity then you may be able to buy the beneficial interest back. With bankruptcy your IPA if you got one would only last about 3 years I think, wheres an IVA would tie you in for longer.
How much are you expecting to give your creditors over the term of the IVA? It might be worth working out your living expenses (which will be similar in an IVA/Bankruptcy) as a rough starting point and work out how much you would have available each month for an IVA and multiply it by the number of months - once you know how much an IVA will cost you should get a rough idea of what sort of payback the creditors will get in the IVA. Obviously if it's a really low percentage (below say 20%) then they are less likely to accept but if it sees the getting a decent payback then they will be happier. It also depends on how many creditors you've got as if you've got one large creditor you will need to get them on board as they could scupper everything whereas with more smaller debts no one creditor would have so much power to be awkward.
Have you spoken to one of the debt charities to go through the options with them? someone like National Debtline, CCCS etc who should be able to give you the pros and cons of each solution?
Sorry I can't answer the question about the cars though.
df

dancingfairy

Yes if you can't get your creditors to agree to an IVA they could seek to make you bankrupt but remember that will cost them money. It depends on how much you owe each creditor and whether they think they will get anything by making you bankrupt - you could just end up in limbo. You could of course make yourslef bankrupt though (though this will cost you). You need to put together a proposal that's as much as you can reasonably afford - no point making it something you can't afford for 5/6 years but something they would be mad to refuse
df

fergusor

The cars won't be included in the iva as we're up to date with the payments. What I wanted to confirm was whether I would still be able to pay my half if the finance even though it's not in my name? Or for the car that's registered to me, can I still give my partner the money for the finance even though it's not in my name?

Hope I'm making sense here. The car finance isn't in my name, if I go the iva route can I put the cost of the car finance in my soa?