IVA or Bankruptcy - hard to be positive

kitty_and_gucci_2008

Hi all,
My wife and I are after some honest advice. We have a 20 month old daughter and expecting our 2nd child in Feb 2012.
We recently moved out of our previous private rented property and have been to the small claim court and we are required to pay £3k+ as we left the property early due to a disagreement with the landlord who was quite threatening but eventually agreed we could leave however a month later they decided to back down, by that point we had moved out. We send a letter confirming we had discussed and agreed to leave early without having to pay for the remainder of the tenancy.
We are now struggling to pay bills and debts which total £40k , and to top it all, my parents have split and my father has come to live with us until he can find alternative accommodation as he does not have anyone else and is 70 year old. We live in a 2 bed ground floor flat, so at the moment it is quite difficult to see light at the end of the tunnel.
We are thinking of either IVA or Bankruptcy. The debts are all in my name but the CCJ for the landlord (£3k+) is in both of our names I am do not want to pay him for this when he said we could leave then changed his mind. My wife only has the CCJ to pay with me. My wife did go bankrupt in Nov 2006 and was discharged within 9 months. I have placed our SOA below which we have also sent off to the Judge to appeal the decision of paying the landlord £3k+ so the judge can see our financial circumstances as we simply cannot afford to pay the small claims judgement.
Would appreciate advice please, thanks:
Income
Wages/salary £1,500.00
Wages/salary (partner) £689.00
Benefits £224.00
money from other people £ -
other £ -
total income £2,413.00

Outgoings
rent £430.00
second mortgage/secure loan
ground rent/service charges
building/contents insurance
life insurance/endownment
council tax £89.00
gas £50.00
electricity £50.00
water £27.00
food/house keeping £200.00
travel (Petrol) £180.00
telephone £50.00
tv license/rental £56.00
clothing/emergencies £50.00
prescriptions/health cost £0
other £479.00 childcare costs
other £68.00 car insurance
other £14.95 car service plan
other £40.00 baby clothes/toys/nappies, wipes
total outgoings £1,783.95

my total income is..... £2,413.00
my total outgoing are..... £1,783.95
this leaves me availble income of £629.05

Priority debts

type of debt money owed
gas arrears £220.00
electricity arrears £230.00
BT £120.00
Lloyds TBS Overdraft £750.00
Lloyds TBS Credit Card £500.00
HSBC Credit Card £750.00
HSBC Overdraft £1,095.00
Car Finance (GMAC) £12,000.00
Capital One Credit Card £750.00
HBOS Preference Credit Card £700.00
Littlewoods £500.00
Halifax Loan £22,000.00
Hays Credit £450.00
total £660.50 total payments to priority creditors is £660.50

£ - left-£31.45

Tixy

Hi

regarding the CCJ - did you go to court to try to defend against it? you say you cannot afford to pay it - did you ask to pay in installments? have you applied for a redetermination so you can pay in installments now?

Have you had any advice from one of the debt charities regarding your debts in total and dealing with them?
On your payment list which creditors are you counting on the priority creditors payments of £660? how soon will the gas & elec arrears be repaid and what will be your priority creditor repayments a month once they are?

Are you getting all the benefits you are entitled to in terms of tax credits etc?

kitty_and_gucci_2008

Tixy wrote: »

Hi

regarding the CCJ - did you go to court to try to defend against it? you say you cannot afford to pay it - did you ask to pay in installments? have you applied for a redetermination so you can pay in installments now? we were unable to go to court as i couldnt get the time off work and my wife has been really ill during her pregnancy so was too unable to attend so we submitted our evidence to the court with the reason why we were unable to attend, I know this isnt ideal but we couldnt do anything else. we worry that the landlord may send in the baliff even through we dont have anythin of value.

Have you had any advice from one of the debt charities regarding your debts in total and dealing with them? not yet, thorght this would be our frst port of call to get some advice.

On your payment list which creditors are you counting on the priority creditors payments of £660? how soon will the gas & elec arrears be repaid and what will be your priority creditor repayments a month once they are? elec and gas will be paid off in 11 months

Are you getting all the benefits you are entitled to in terms of tax credits etc?

we are getting child tax credits every week and child benifit monthly, thanks.

Magi74

Can't really offer much advice, but there's some smart people on here that will be far more helpful. Support each other (you and your wife) and you will find a way to solve your problems.

thechippy

What would your normal payments to creditors be per month with all of them?

Def don't go for an iva, they are only useful in ltd circumstances.

kitty_and_gucci_2008

normal payments £650

Tixy

Is the £650 your full monthly payments? I thought it was just the payments on priority debts of utility arrears and the car finance from what you had posted.

Well in that case you are not very far short each month at all, and even with monthly payments for the CCJ you won't be far off, certainly not enough to be thinking about bankruptcy. You'd probably end up with an IPA for not much less than you already pay to your debts each month. And I'm not sure that an IVA would benefit your situation either, a DMP may be more appropriate given your level of debts and amount you can afford to pay each month.

RAS

Is this a car loan or hire purchase?

RAS

kitty_and_gucci_2008 wrote: »

Wages/salary £1,500.00
Wages/salary (partner) £689.00
Benefits £224.00
money from other people £ -
other £ -
total income £2,413.00

Outgoings
rent £430.00
council tax £89.00
gas £50.00
electricity £50.00
water £27.00
food/house keeping £200.00
travel (Petrol) £180.00
telephone £50.00
tv license/rental£56.00
clothing/£50.00
prescriptions/health cost £0
other £479.00 childcare costs
other £68.00 car insurance
other £14.95 car service plan
other £40.00 baby clothes/toys/nappies, wipes
emergencies
total outgoings £1,783.95

my total income is..... £2,413.00
my total outgoing are..... £1,783.95
this leaves me availble income of £629.05

You will not get all of these allowances in BR (and certainly not on an IVA) but you would get some for other items.

I suspect you would end up with an IPA of several hundred pounds a month depending on whether they accepted your need for a car.

It is possible you would end up paying back nearly all you owe anyway given that you are only allowed £20 surplus.

kitty_and_gucci_2008

RAS wrote: »

You will not get all of these allowances in BR (and certainly not on an IVA) but you would get some for other items.

I suspect you would end up with an IPA of several hundred pounds a month depending on whether they accepted your need for a car.

It is possible you would end up paying back nearly all you owe anyway given that you are only allowed £20 surplus.

£650 if for priority debts, the car is a conditional sale and is £202 per month. I expect the car company will take this from us, but we really need a car to get to work as we work 13 miles from home. Would we be given any money from the OR to purchase a car should the financed car be taken away? my wife is alos due to go on maternity leave in december.

when you say IPA, is this what we will pay back each month? how long for?

thanks.

thechippy

Ipa is 3 years.