IVA v's Bankruptcy

r710

Hi,

I realise you guys can't advise on individual circumstances but I am looking for some opinions from other people's experience.

My husband has just ceased self employment. His business folded and as a sole trader he is now personally liable for the business debts.

He now has unsecured debts to the approximate value of £55k.

An agency has told him that they should have regular work for him by the end of this week, so he has not attempted to sign on.

When I did the CCCS debt remedy, they have advised him to try for an IVA.

Having spent many hour hours researching the options, we are leaning towards bankruptcy (for him) as opposed to an IVA. But are we missing something? Seems bankruptcy would give him the best chance of a fresh start and if his credit rating is shot either way....

What would your reason for choosing an IVA over bankruptcy? We have no mortgage (we rent) and no assets. (And seemingly, at this time, nothing to pay an IVA with!)

I'd appreciate your thoughts.

Thanks

judojub

Hi r710.
Only you can decide which would be the best route for you to take.
It might be worth ringing CAB,CCCS, National Debtline for some advice.
It would appear from what you have said that, with no mortgage or assets to speak of then BR may well be a good option for you but you should definitely seek further advice first.
An IVA would last for 5/6 years. An IPA in BR would last for 3yrs (if he got one). Your credit rating will be shot for 6 years for both of them.
Please bear in mind though that if you have any joint debts and he does go BR or enter into an IVA they will chase you for the full amount of that debt.
Hope that helps you a little bit. I am sure somebody else will pop in with some more info.
Neither one is to be entered into lightly so gather as much info as you can and go from there!

EDIT: Also wanted to add that he must be sure enough of a stable income to do an IVA. Agency work might not provide that.

FavDaughter1

Hi, all good advice from Judo above. you might find it helpful to talk to the CAB but it does sound as if BR might be best given he doesn't have a regular income. read up on it carefully & good luck x

r710

Thanks judojub.

We'll give one of those a call. Unfortunately, one of them, (can't recall which) told my husband that they couldn't advise him because he is neither, self-employed, employed nor receiving benefits.

He'll go and see what the job centre say in terms of signing on. I understand that may be a battle in itself.

Thankfully none of the debt is joint (I have my own unfortunately, which to date has been managed). The £55k is with mine included, his is actually £46k - to correct my original post. (We'll address mine once we've got my husband's sorted)

I realise now the CCCS debt remedy is just a guide and perhaps doesn't account for our own individual circumstances.

Regards

judojub

The remedy is just a guide, but you can always give CCCS a ring. These were the ones I contacted. Definitely ring around though to see where you both would stand.
On the face of it, BR might well be the best option for him.
I hope you get something sorted r710!

theflowergirl

hi there,
i'm in a similar situation, my business (also sole trader) ceased trading in march and i have circa £65K debts. been swaying between iva and br for some time, and have decided to go for a 'lump sum' iva - mainly as me and my partner have a house although there's no equity.

i'm also not planning on working as have 2 small children and worked out childcare costs/car cost/iva monthly repayments leaves zero at the end of it.

just hoping that the lump sum will be approved.

if we didn't have house i'd probably go the br route as i know my credit will be shot to pieces anyway....

hope this helps? feel free to PM if you want to..

debt_doctor

theflowergirl wrote: »

hi there,
i'm in a similar situation, my business (also sole trader) ceased trading in march and i have circa £65K debts. been swaying between iva and br for some time, and have decided to go for a 'lump sum' iva - mainly as me and my partner have a house although there's no equity.

i'm also not planning on working as have 2 small children and worked out childcare costs/car cost/iva monthly repayments leaves zero at the end of it.

just hoping that the lump sum will be approved.

if we didn't have house i'd probably go the br route as i know my credit will be shot to pieces anyway....

hope this helps? feel free to PM if you want to..

If you have no equity in your house then it is not an asset so not at risk in bankruptcy so long as you can afford the secured lending.

DD

debt_doctor

r710 wrote: »

Thanks judojub.

We'll give one of those a call. Unfortunately, one of them, (can't recall which) told my husband that they couldn't advise him because he is neither, self-employed, employed nor receiving benefits.

He'll go and see what the job centre say in terms of signing on. I understand that may be a battle in itself.

Thankfully none of the debt is joint (I have my own unfortunately, which to date has been managed). The £55k is with mine included, his is actually £46k - to correct my original post. (We'll address mine once we've got my husband's sorted)

I realise now the CCCS debt remedy is just a guide and perhaps doesn't account for our own individual circumstances.

Regards

He wont get contrbutions based JSA because he does not pay class one NI contributions.
If there is no, or little income in the household he would get income based JSA and if eligible for ibJSA would also get housing and council tax benefit.

An IVA does not seem the slightest suited to your needs in my opinion.

DD