Second thoughts about bankruptcy

spacekitty31

Hi all, I posted on the bankruptcy forum yesterday and after considering the answers I was given I have spoke to my partner and he has said that we should go for an iva. I'm in 2 minds as I think we would qualify for an DRO, the problem is the fact that HMRC is taking off £60 a week for an overpayment, and if the DRO gets accepted then our income will go up and we will have an extra surplus of £260 per month!!! We are planning on visiting the CAB on Thursday to get advice, but I'm just getting an idea of what's going to happen once we enter a plan! Step change told us bankruptcy would be our best path (this is we before the HMRC took the money off us)

We don't drive or own our home (housing association) we have 4 boys, 3 of school age and one toddler. Our only luxury is sky, mainly because of our boring life! Income is mainly benefits and my partners job which is only 30 hours a week on near minimum wage. I am a smoker, but have cut back considerably after trying to quit several times this year already! We also have a dog (she is insured and on a vet plan which is only £10 a month and cuts the costs over the year for worming/flea and other perks) I'm going crazy out of my mind as when I write my budget on paper it says we have an excess of £400 a month, when talking to step change they said 200 and I never see any spare cash and end up going round in circles borrowing off my family to keep on top of things! They are as poor as us so have to pay back, so asking them to wait not even an option!

I'm sure I've grown a couple more grey hairs since writing this, I'm 40 in 6 years and would like to eventually learn to drive and buy a caravan to enjoy while the kids are still young! Help please!

DorisTrousers

I've briefly looked at your post yesterday.

Some points and some queries if I may. Are you sure that your partner would lose his job with the post office in an IVA? It's a fairly safe bet if he went BR, but IVA's are sometimes viewed differently. Worth a chat, anonymously, with HR. Similarly, that chat should extend to the post office policy on DRO. Do they view it the same as BR?

If you do opt for BR or DRO then the deduction from Tax Credits MUST stop, and you will receive that income again. This may or may not debar you from DRO, and the effect on any Income Payments in BR must be taken into account as well.

Currently, if you opt for IVA in the end, then HMRC will not stop the deduction from your benefits, even though, technically, they should. That needs careful consideration as well.

I didn't see you post a SOA yesterday (if you did and I missed it, apologies) so are you able to post one here? If you are happy to post one here then the good folk who post on here will be happy to look at it for you. If you are not happy to do that then you can PM me if you want (I work for a Debt Charity by the way) although of course you don't have to do that either.

This does look like one of those scenarios where there isn't a clear cut answer, more a case of very carefully weighing up the pros and cons of each solution before you choose what is right for you.