Im thinking of failing my IVA and going bankrupt

moodswing_2

This is also posted on the Debt Free Wannabe and I've been advised to post here as well, sorry if your reading this a second time.

Hello there, I'm new to this website and forum and could really do with some help and

I owe about £13,000 in total for 2 loan repayments, bank overdraft/charges, and a car payment to my sister (I owe her £7,000). In December 2005 I took out an IVA with IDS who added my sister as a creditor. The initial monthly repayments were £390 for about 10 months then it was going to increase to £690.

In January 2007 I lost my job, but thankfully secured a permanent position a month later. IDS carried out a review of my finances and increased my monthly payments to £891 to clear the arrears and bring my account up-to-date. I have been struggling even more than before and requested that I be allowed to make a temporarily reduced payment of £700 and even provided a detailed breakdown of my monthly outgoings, this was rejected.

In July 2007 I was informed that my tax code had been changed and I received less money in my pay. I contacted the Tax Office who confirmed that I would be paid less from now on. I am now finding it extremely hard to maintain the monthly payments of £700 and pay for my other monthly outgoings. I get telephone calls/comments from my sister every now and then asking whats happening with my repayments which is totally understandable and I feel like a right sh**e for messing her around like this. She advised me yesterday that she has only heard from IDS once, which was when the IVA was first set up 2 years ago.

I am not sure what to do, should I attempt to cancel the IVA and face bankruptcy or should I try and contact IDS to again request that they accept a lower sum.

To be honest, I think I’d rather be rid of IDS as my credit score has been rock bottom for years and I’m fine with that as I’m nowhere near in a position to apply for a mortgage and am very happy with my basic bank account. But my main concern apart from my sister is that the Courts will demand that I sell my car or they seize it themselves. As the car was technically an oral hire purchase agreement between myself and my sister would the Courts be in the right to do this.

Someone please point me in the right direction, I've heard about CCCS who I'm going to call either tonight or tomorrow evening.

Thanks very much

Rafter

Sorry about the position you are in.

Sounds like IDS didn't negotiate a great IVA for you if you are struggling to make payments. It is difficult to undo once established though.

Your monthly payment seems ridiculously high though for the amount you owe. Given the IVA will last 5 years you will be paying a total of £37,000 but you claim to only owe about £20k.

I suggest you speak to the CCCS or someone else independent to see whether you have been advised poorly.

Bankruptcy should be a last resort though, given the long term implications on your ability to get a mortgage etc.

Remember too in bankruptcy you are not allowed to treat creditors preferentially, so you sister may lose her loan.

You are usually allowed to keep a car (worth up to around £2,000) but a more expensive one will need to be sold. What the courts will do will depend on ownership of the car. If it is in your name, it becomes the property of the court if you become bankrupt as part of your assets.

Good luck and hope you get this sorted.

R.

scootw1

Sounds as if a huge amount is going in fees. why the big jump from 390 to £690? Can't see how they can justify a huge jump like that.

moodswing_2

Rafter wrote: »

Sorry about the position you are in.

Sounds like IDS didn't negotiate a great IVA for you if you are struggling to make payments. It is difficult to undo once established though.

Your monthly payment seems ridiculously high though for the amount you owe. Given the IVA will last 5 years you will be paying a total of £37,000 but you claim to only owe about £20k.

I suggest you speak to the CCCS or someone else independent to see whether you have been advised poorly.

Bankruptcy should be a last resort though, given the long term implications on your ability to get a mortgage etc.

Remember too in bankruptcy you are not allowed to treat creditors preferentially, so you sister may lose her loan.

You are usually allowed to keep a car (worth up to around £2,000) but a more expensive one will need to be sold. What the courts will do will depend on ownership of the car. If it is in your name, it becomes the property of the court if you become bankrupt as part of your assets.

Good luck and hope you get this sorted.

R.

Hi Rafter,

Thanks very much for your advice, I'm going to call CCCS tonight and I know they'll set me straight once and for all.

piggeh

Bankruptcy shouldnt be an option. Speak to CCCS and get away from IDS (whoever they are). You shouldnt be stretched financially under an IVA. Obviously they arent fighting your corner very well and dont seem to be too concerned about your hardship going by your post.

moodswing_2

Good morning all, thanks for your help so far. I've just called CCCS and they said that as my IVA is a legally binding agreement with an outside company they can't get involved. They can only get involved if I cancel the IVA.

They advised me to contact IDS and tell them that I'm struggling to keep up their requested payments