What is best?

pinkladymel

Hiya
My sister is in serious debt of about 6000 and says she doesnt care anymore she just wants it gone because she cannot afford to pay it. Could someone explain to me because i have been searching the internet for two hours now (LOL) what an IVA and bankruptcy is. What I mean is, what does your circumstances have to be? How do you go about it? How long will it effect you for? and when will you ever get your life back/when will credit rating be returned to ok?

Thanks in advance xx

immoral_angeluk

Get your friend to call the CCCS. They also have a website and are a charity that will give free advice and help to those struggling with debt.

chevalier

Agree with IA. But to answer your question. An IVA is an agreement to pay creditors a percentage of the actual debt, with the rest being written off. They run for 5 years. BUT 75% of the creditors have to agree to the IVA or else no go, PLUS one HAS to pay the agreed amount no matter what. If property is owned then it is expected that any equity in it released in year 5 to further fund the IVA.

Bankruptcy wipes of all of the debt, BUT again if there is equity in a property this may be sold to get back some of the money.

Either way will ruin a credit score for 6 years, so getting any more credit will be at a much higher APR rate.

I am sure with good budgeting your friend could pay this money back in a relatively short amount of time (depending on their income of course). So get your friend to contact CCCS, Payplan or National Debtline (links at top of the forum), to see which is her best option
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