Quit an IVA to go bankrupt?

wishingherlifeaway

Hi all, new here so please be gentle! Any advice and/or previous experiences of similar situations would be greatly appreciated.

Well, a brief background to my situation is this......married with 2 kids and a mortgage, working part-time and my self-employed hubby works full-time plus has a part-time weekend job. Basically our debts arose from seeking finance to fund a business venture (my husband's) which at the time was very profitable and made enough money to meet the finance repayments each month. Gradually as the recession took hold, work dried up and income went down leaving us unable to meet payments. Went to an insolvency company who arranged an IVA for us and so far we're just going through our first annual review with that and will hear in 6 weeks time if it is to continue as normal.

Here's the thing......husband calls me from work today to say he may have no work from next week til the New Year, so his main income which is the only way we've been able to pay the IVA will stop. We will just have my wages and his weekend job to live on. I am wondering at this stage if bankruptcy is our wisest choice here. At the time of arranging the IVA last year I was so hell-bent on avoiding bankruptcy as I love my home and couldn't bear the thought of losing it but now realistically if this is the case that hubby has no full-time work then surely the IVA will fail as we will not be able to pay the mortgage never mind the IVA. So I am wondering do we sit and wait until the IVA fails or do we start bankruptcy proceedings? I still love my home but I have to be realistic about this and although I am not 100% sure hubby will have no work from next week on, the very fact that it is not as secure as it once was makes me question the use of struggling to pay an IVA and having no money at all. Even if his work doesn't stop, I am beginning to think that we should just call quits on the IVA and go bankrupt as there is never any certainty about him having work. My reasons for this are; the burden of the stress and worry about his unsecure employment would be removed, rental properties in our area are WAY less expensive than our mortgage, he could maintain his part-time job and we'd be eligible then for tax credits and possibly actually be able to make ends meet for a change.
Am I being a bit premature or is it wise to consider this as I really do think that in all honesty we will not be able to keep up the IVA for the remainder of the term (another 4 years - possibly 5 depending on circumstances). Is it not better to go bankrupt now, lose our house and car but somehow start afresh? I think mentally the debt is constantly on my mind, I don't sleep well, I'm constantly worried and my husband is always under pressure from working 6-7 days a week. I apply for full-time jobs but nothing ever comes to fruition and overtime in my own employment is minimal.

What do you think? I'm also shortlisted for a job which would pay all our monthly bills BUT the procedure for that has already taken 5 months to get to this stage and I have been told that it could take up to 12 months to get confirmation of a position. SO...do I go bankrupt now before the IVA may fail or do I hold off somehow in the hope that this job comes up sooner? Dilemma!!

Help?

debt_doctor

Hi,

You should get some advice from a debt charity to go through your unique circumstances but it would seem that;

Your circumstances have changed since the IVA was set up, and you appear unable to fund it (allthough it is possible to negotiate 'payment holidays' or reductions in some circumstances)

Your wish to retain your home has changed - it now seems that you view it as a mill stone around your neck rather than must be saved at all costs.

With the above you are right to CONSIDER whether you are potentially better off going BR. At least a BR cant 'fail' and payments only made via an IPA when the income is available, with no penalty when they are not.

Potentially your IVA would need to have failed before you could petition, often a District Judge will accept that several missed payments indicate failure of an IVA but I have known one ot two require a 'failure certificate' from the IVA IP before they will hear the debtors petition.

As I know you realise, this is an important step, but it would seem that BR is now more in line with your 'needs' than an IVA - but you must take individual advice on the matter first as we don't know everything about your circumstances.

DD

wishingherlifeaway

Thanks debt doctor!
I suppose I should dig out my IVA agreement and read the smallprint then when I know for definite about DH's job we can speak to the IP and see if we have options. If not then an impartial chat to a debt charity would do no harm.
It just all seems so much more magnified as it's nearly Christmas and all I see is doom and gloom and the possibilty of starting 2012 off in a worse position than I was in 2011. Although I think in my head BR may be the reality in the long-run it still scares the hell out of me.

It's the unknown which just freaks me out slightly as I am usually such a controlled person whereas now I am irritable, unpredictable and moody.

debt_doctor

Yes, I can fully understand that, you thought you had got the right solution but yet now your in a total spin as to whether that solution is now right for you and your family.

Your not alone in that I assure you!

Put your best cold, clinical, head on tomorrow and post further, because logic without emotion will get you where you need to be.

DD