Bankruptcy vs IVA budgeting

bobgetta

Hello,

New to these forums but looking for some advice and support from those in the know!

Basically, after a failed business with bank loan, lease hires and investment from family, topped off with a credit card and overdraft, i'm looking at debts of £50k. My only option is to look at clearing with bankruptcy or an IVA.

I've spoken with citizens advice and look at a budget that with my expenses and living costs after a bring home of £1277 leaves a disposable invoice of £100, which would then make up the IVA repayments.

However, i much prefer the idea of bankruptcy...that i can be discharged after a year and only make IPO payments for 3 years...after how this year has been, just getting it all behind me as soon as possible is the most mentally beneficial way for me.

But the lady i spoke to said that the budgets are much tighter and more basic for bankruptcy, and now i'm imagining barely having money to eat! I'll post a breakdown of what the initial budget was made up of when i'm not just about to go into work, but i was just wondering what anyone elses' experiences with creating the budgets that determine your 'disposable income' with the OR were like?

Thank you

L

tigerfeet2006

Hi and welcome to the board

Post your SoA as dicussed with the CAB and someone will look it over for you. Some things allowed in an IVA are not allowed in BR ie: a seperate cigarette fund. but the allowances are very fair and allow the BR to live ok.

This is the calculater we use on the MSE boards if you want to fill it in.

http://www.stoozing.com/calculator/soa.php

mwarby

With BR at least you just have to agree budget with OR, not supervisor and majority of creditors

Certainly in both cases you'll be allowed a reasonable amount for food

Banquo21

In my experience an IVA budget is much tighter than in Bankruptcy. Also it is very hard to change an IVA budget in a change in circumstances. The IVA will last for at least 5 years, most probably 6 whereas is you given an IPA in Bankruptcy it only lasts for 3.

Also with an IVA the creditors have to agree with your monthly payments, in Bankruptcy only the OR decides how much (if any) you would pay back to your creditors.

bobgetta

Sorry for the slow reply. This is the budget that i went through for an IVA:

Total Income

1,277.27

Expenditure

Rent

500.00

Council tax

162.00

Gas/Electricity- £480 annual

40.00

Water

20.00

TV licence - Netflix/spotify

16.99

Washing machine rental

12.00

Home phone

11.91

Mobile phone

27.00

Public Travel

25.00

Other (eg taxi's)

20.00

Food, cleaning, toiletries

75

Clothing & Footwear

25.00

Health (dentist/prescriptions/glasses)

16.50

Hairdressing

12.00

Cable, Satellite, Internet

16.99

School meals/Meals at work

30.00

Hobbies & Leisure

20.00

Sundries & Emergencies

12.00

Total Expenditure

1,189.39

Disposable Income

87.88

Any feedback/advice/guidance would be appreciated...I don't have a car currently, so not sure how accurate my public transport costs are as i've never really taken note of how it adds up. But i will need to look at getting a car next year...this, i assume, i can talk with the OR as it happens to add into the budget?

Many thanks

tigerfeet2006

Put £10 into an Emergency Fund and the rest goes to Housekeeping. Now you have no surplus.