Failing IVA Vs Bankrupcy

shell_21

Hello all,

My partner entered an IVA last November due to getting in a lot of debt (over 40k) . His monthly payments into the IVA are £290pm and to be honest we are now starting to struggle with those. With over 5 years left it is just never ending so he has seriously been considering bankruptcy.

Does anyone have any experience of going from an IVA to Bankruptcy? We own a house (which we only got the mortgage on 1.5 yrs ago so pretty sure it is in negative equity) but if we had to leave the house and move into rented then this is something we are prepared to do.

The only major concern is if the IPA payments are expected to be more than the current IVA payments. I have been trawling the intenet for hours trying to find some 'real life' examples of what kind of monthly payments people are making in bankruptcy (I know that everyones circumstances are different).

Another factor is that we want to start a family soon and within the IVA this is looking impossible as we would have so much to purchase.

tigerfeet2006

Going BR doesn't mean losing the house. If it's in negative equity then its fairly safe.

If you put your IVA SoA up on here then someone will show you what sort of payments you may or may not be making.

alastairq

As Tigerfeet says, petitioning BR doesn't automatically mean, the loss of one's home.

Regarding payments, [if indeed, there are any?] into an IPA [which is an agreement, not an imposition, unlike an IVA]....then the simple answer is....after all allowances have been accounted for in your SOA.....any surplus income left, will be claimed by the OR for the BR estate....for a period of 3 years, from the date of the agreement.

[The agreement [IPA] must be in place before Automatic Discharge..usually 12 months from date of petition for BR]

This IPA is not a debt repayment.

It is an agreement between your Husband,and the OR, to hand over surplus income.

Therefore, within that 3 year payment period..should your Husband's financial circumstances change, then the IPA amounts can be varied, up, down, or even, to zero!

With regards to the house? The OR will seek to realise your husband's share of any equity in the property.

[Equity being, the current market value of the house, less the amount borrowed.]

So, if you are concerned about retaining the house, obtain a current [quick sale] valuation from 3 or 4 estate agents......this should give you some idea of how much equity there is in the property. [Don't forget to divide in half......].

shell_21

Hello again,


We have done a new SOA as things have changed since a year ago when the old one was submitted.


IncomeAmount(£)
Monthly income after tax 1750
Partners monthly contribution (she is paid
1300 after tax but has her own debts to pay) 900
Benefits 0
Other income 0
Total monthly income2650
ExpensesAmount(£)
Mortgage 795
Secured/HP loan payments - This is our car 108.74
Rent 0
Management charge (leasehold property)0
Council tax 105
Electricity & Gas 112
Oil 0
Water Rates
30Telephone (land line)16.99
Mobile phone 66 (for both of them)
TV Licence 13
Satellite/Cable TV 23.5
Internet services - free internet due to job 0
Groceries etc. 375
Clothing 80
Petrol/diesel - 30 mile round trip to work each day & partners family are 200 miles away 250
Road tax 9.2
Car Insurance 24.21
Car maintenance (including MOT) - this includes a service plan purchased with the car 21.67
Car Parking 15
Other travel - such as the occasional taxi / bus when partner has the car 30
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) - inc partners contact lenses bill 41
Pet Insurance/Vet bills -2 rabbits & 1 cat 29.96
Buildings & Contents Insurance 19.69
Life Assurance 11.23
Other Insurance 0
Presents (birthday, christmas etc.) 30
Haircuts - factoring in partners hair colouring 60
Entertainment 30
Holiday 50
Emergency Fund 60
Smoking 30
Meals at Work - I work on the road in a van so not fridge/ microwave 75
Laundry / Dry Cleaning 15
Gym - joint membership 60


Total monthly expenses2587.15

shell_21

Thank you both for your replies.


I have posted the SOA which we have done jointly - although I have listed my contribution as I am not going BR but do still have my own debts to pay off and also have some spending money to see friends etc..


Once BR and making the payments if we where to become pregnant would it be a case of calling the OR and advising? And how long would it take for payment amounts to be amended whilst we would be paying of for pram/ cot etc.?


I think the plan of action for now is for my partner to open up a Barclays cash card account and then for us to cancel the IVA payments.... I have read that it takes 3 months for the IVA to 'fail' before he can then go bankrupt - is this correct? And will the IVA people automatically make him bankrupt or will he need to 'apply' for this?


Thanks again for the assistance,

cam6278

Hello,

Im very new on here and not a expert on SoA.
I know from my reading on here that things like gym membership, hair colouring at a salon, smoking and entertainment are not usually considered a essential living cost - if those costs were cut that would free up some money so you are not struggling .

Claire

tigerfeet2006

shell_21 wrote: »

Hello again,


We have done a new SOA as things have changed since a year ago when the old one was submitted.


IncomeAmount(£)
Monthly income after tax 1750
Partners monthly contribution (she is paid
1300 after tax but has her own debts to pay) 900
Benefits 0
Other income 0
Total monthly income2650
ExpensesAmount(£)
Mortgage 795
Secured/HP loan payments - This is our car 108.74 IS THIS HP OR A LOAN. IN YOUR NAME OR PARTNERS.
Rent 0
Management charge (leasehold property)0
Council tax 105
Electricity & Gas 112
Oil 0
Water Rates 30
Telephone (land line)16.99
Mobile phone 66 (for both of them) YOUR PHONE ONLY. HERS IS HER EXPENSE TO PAY OUT OF HER MONEY.
TV Licence 13
Satellite/Cable TV 23.5
Internet services - free internet due to job 0
Groceries etc. 375
Clothing 80
Petrol/diesel - 30 mile round trip to work each day & partners family are 200 miles away 250 OR ISNT INTERESTED IN FAMILY MATTERS ONLY WHAT IT COSTS FOR WORK AND RESONABLE TRIPS USUALLY. LEAVE IT AT THIS AND SEE IF YOU CAN NEGOTIATE IF OR TRIES TO CUT.
Road tax 9.2
Car Insurance 24.21
Car maintenance (including MOT) - this includes a service plan purchased with the car 21.67
Car Parking 15
Other travel - such as the occasional taxi / bus when partner has the car 30
Childcare/nursery 0
Other child related expenses 0
Medical (prescriptions, dentists, opticians etc.) - inc partners contact lenses bill 41 OR MAT SAY HER EXPENSE TO COME FROM HER MONEY.
Pet Insurance/Vet bills -2 rabbits & 1 cat 29.96
Buildings & Contents Insurance 19.69
Life Assurance 11.23
Other Insurance 0
Presents (birthday, christmas etc.) 30 USUALLY NOT ALLOWED BUT LEAVE IT AND SEE WHAT IS SAID.
Haircuts - factoring in partners hair colouring 60 PARTNERS EXPENSE. USUALLY ALLOW £10-15 FOR YOU.
Entertainment 30 USUALLY NOT ALLOWED BUT LEAVE IT AND SEE.
Holiday 50 £40
Emergency Fund 60 £20 ONLY
Smoking 30 NOT ALLOWED ON YOUR SoA.
Meals at Work - I work on the road in a van so not fridge/ microwave 75
Laundry / Dry Cleaning 15
Gym - joint membership 60 NOT ALLOWED ON YOUR SoA


Total monthly expenses2587.15

Apologies for the capitals I can't do colour atm.

Your SoA should be your joint expenses plus your own personal expenses. Your partners personal expenses are not part of your SoA.

Smoking and gym are deemed luxuries and can't be shown on your SoA. That's not to say you can't do them. You just get creative.

Sorry on phone and tired and sure I've missed something but will look again tomorrow after work. Hopefully someone else will put in their two pennies as well.
Please answer the car questions as this is really important.

owlet

I echo Tigerfeet here. I can't see anything else to add.

Edit: groceries seems high for two people - what do others think?

Also as tigerfeet has said the car question is important. It could mean the difference between you keeping and losing it.

Do open the Barclays basic account now & get all relevant income transferred into it as soon as you can.

I presume with an IVA that you just stop paying and wait for it to fail. Any money you would be paying towards this you can save and use for the bankruptcy fees (if a creditor doesn't make you bankrupt). No one can say if this is likely or not. It will help you get ahead a bit anyway. You can also use some of the money for any essential purchases you may need. Keep receipts though.

jjj1980

I might be way off here but is the OP here the partner of Aircrafthandler? The figures and info given in the posted SOAs look very similar.

owlet

jjj1980 wrote: »

I might be way off here but is the OP here the partner of Aircrafthandler? The figures and info given in the posted SOAs look very similar.

Aircrafthandler has already gone BR

shell_21

Thanks again for the replies.

The car is hp and is in my name (not my partners who is the one going BR). However it is the only car in the household and we both use it.

If I remove my personal expenses (haircut/ contact lenses ect) This would mean that my contribution (partners contribution ) would need to be lowered.

My partner does not post on the forum.