In IVA and Considering Bankruptcy

Likesplants

I am two and a half years into an IVA and wondering if bankruptcy would be a better solution. Total debit is £35000 from loans and credit cards. My only asset is a car worth about £800 and I live in rented accommodation. I am considering bankruptcy because i am worried I won't be able to keep my IVA going as it's a struggle. I am also worried because my IVA take total household surplus income into account and the debts have nothing to do with my partner and he didn't benefit from them as I built them up before even knowing him. I have to pay 50% of household expenses but IVA company say he should pay more as he earns more. That's all well and good but I can't force him to do so, so I am finding it difficult to manage and i don't want to end up homeless if we fall out anymore about it. I would like some advice please to know if others think I should declare bankruptcy? It wouldn't affect my job. I would like to keep my car as I use it to take my elderly mother out as she has walking difficulties and would be housebound if I didn't take her out. But I don't need it for work. So is there a chance they would take it off me? What really worries me is my mother lent me £3000 a couple of years ago which the IVA company knew about when I applied, but they didn't include it in my IVA. They told me to use any surplus expenditure to pay her back. On and off I have managed to pay her a bit back, but I am worried that when the Official Receiver sees this he will ask her to repay it to him and she's 87 and only has her state pension and no other income, but she does own her home. But i am frightened he will make her bankrupt to recover it when it wasn't her fault. I hadn't heard back then about the preferential creditor rule. And one other worry I have is that I shred things so I have no bank statements or original statements from the credit cards etc used when I set up the IVA. So would I get into trouble because I shred things and can't produce them or will it be ok because if i did go bankrupt the OR can just get copies anyway? I've stopped shredding everything now, but it's a bit late. Many thanks for any advice. I come on this forum quite a lot just to read things and think it's a life saver.

alastairq

Hi..........& welcome.

Lots of questions to respond to, so I'll try for a few?

Re-Mum's loan?

In a Bankruptcy, all unsecured debts at the time of petition are included, whether the OR knows about them or not. [Such is the power of a BR petition].
therefore, Mum' would be a 'creditor' in the BR...and able to claim her share...if the debt can be proven?

This does mean you would be barred from repaying it, officially, but there is no reason why you could not continue to repay her, but from your living allowances, in an unofficial mode. The OR does not stipulate what you actually spend your allowances on.

Re the car? You might be able to claim the car as exempt as an asset [see the stickies at the top?]....as you may need to get to work.

However, if you insist you don't need a car, it may be claimed by the OR...nothing to stop you buying the OR's interest in it if you wish...BR does not prohibit owning a car at all...however, you would not be able to claim directly for its running costs via your SOA.
[noting to prevent you claiming reasonable transport costs, however]

Having paper information isn't absolutely necessary these days..the OR can access all information via banks, creditors, etc.

longtermplanner

Half way through your IVA, if you have been managing to save some money to pay your mum, surely you will be able to keep going? It would no doubt have been better to go bankrupt at the start, but now you are half way through and you would probably have to pay an IPA for 3 years if you go bankrupt.

dancingfairy

Can't you get the iva done om your share of the surplus income? so you both pay an equal share towards the bills then your surplus is looked at for the IVA? It might be worth asking on the IVA board if this is possible, as that's how I thought IVAs worked. Also presumably you can get your allowances re-looked at. Presumably your expenses have increased over the last few years so if you are now struggling with the IVA perhaps it needs looking at? My understanding is that the IP can vary the payment you make by 10% without calling a creditors meeting. Anything where you want to vary it by more than 10% has to go to a creditors vote.
df