Lump Sum IVA or Bankruptcy

Cody

Dear Forum;

I have probably asked this question, in different ways, several times before, but thought this time will be more specific.

My situation in a nutshell, a failed business and CC debt built up when trying to get business profitable (over 6 years) has left me in £80k of debt.

I have no assets.

I was unemployed for a while but now have a secure income, that covers my day to day living expenses (I have a partner on maternity and two kids under 4).

I am speaking with the CCCS IVA people, regarding a lump sum deal. My employer has agreed to help me with a lumpsum, and also family members.

The advisor from teh CCCS though has suggested bankruptcy may be a better option, since I have no assets to loose and my employer and mum and dad can keep their money.

So, I am in a quandry, whether to try for an IVA or bankruptcy.

I am finding it a difficult decsion, bankruptcy sounds worse to me, in just its name. Can anyone provide experience of how an IVA (lump sum over 6 months) may affect my life, over a bankruptcy.

I would like to get a mortgae one day, once finances are back on track. Will both an IVA and bankuptcy make this an impossibility?, or is an IVA less severe with credit you can obtain?

I have seen posts on the forum where people made banrupt can obtain a mortgae from certain firms (if they meet requirements).

I will have lots of defaults on my credit file.

Apologies for the meandering, almost thinking aloud here.

thanks in advance

Cody

FoggyBrain_2

Hi. Stigma - wise, these days BR is no worse than an IVA. As you have no assets, and as long as your boss doesn't mind (some jobs will allow workers to have an IVA, but not BR), this might be a better option. I would suggest you pop over to https://www.iva.com and have a word with a couple of cokmpanies there, to explore all options. It's always good to have a second, ot third, opinion, and the advice is free and without obligation.

As far as I know some of the allowances in BR are a bit stiffer, but you only pay over 3 years, if you get a Payment Order. Do you have a car? Sometimes, if of enough value this will have to be sold.

Another difference is having to stump up fees of around £700 at the court.

steve_luton

Personally I would go for the BR option. I have only recently declared BR and it isn't as frightening or as big a stigma as you probably think it is.

Both IVA and BR will stay on your credit record for 6 years so the main difference is that I expect getting a mortgage afterwards to be difficult (I will have to give up my house and rent for a few years).

If your parents and/or employer are still able to help once the BR is completed, it would benefit you more than paying creditors!

The allowances for spending are tight under both IVA and BR but they have to allow reasonable living expenses - IVA allowances can be seen on some websites offering IVA advice - I think the BR allowances are similar except for car use which has to be deemed by the Official Receiver as essential (e.g. travelling to work where there is no public transport or if you need to use the car for business use).

I would certainly recommend you discuss the option of BR with the CCCS first though.

sniggings

both will be hard to get any credit for 6 years whilst they remain on your credit file,the difference after that time should be the same or maybe a little worse for BR, as sometimes they ask have you ever went BR, you have to say yes,the same is true of IVA but maybe they dont ask as much,so no difference really,BR living expenses are said to be much better than an IVA, as it is meant to be a new start,whereas an IVA is setup to get as much money back as possible, whilst it is active,not sure how a lump sum IVA works,if once you pay the lump sum then thats you free of the debt and dont have a payment for a number of year it may be better for that reason alone,it sounds you have a good job, so with a BR you problably will be earning too much, so will have a 3 year payment plan,where you pay around half of all your income after all living expenses have been paid,to give you an idea,at the time of my BR I was earning around £280 a week after tax,single person,and I didn't have any payment plan,so the living expenses I was allowed to claim were not that bad,I could also keep my car even those a lived 2 mins from work,the car was worth less than 1k, so would have been a different story if it was worth a few thousand,you tend to be able to keep your car if needed for work and worth less than 2-3k,if more than that you would have to sell and buy a cheaper car,hope this long:o post helps.