Advice on iva or bankruptcy please

PJCBEL

I have £39k of debt, £31k is 8 years old and mostly gambling debt. Recently ( last 2 years) I've acquired further debt overdraft, ccs, expensive personal loans and a payday loan. I'm separated and due to family issues my life seems unmanageable. Up to now I've been working 7 days a week and a pt evening job just to keep on top of debts and it's not sustainable. I've no assets or home, I board with my sister 3 or 4 nights and basically nfa rest of week. I need my own place as I've 3 kids but I've no money for deposit or rent at minute. Should I go bankrupt or iva. I was in a DMP for 8 years and only this month missed payments. I'm stressed to max and currently off work sick. Any advice?

fatbelly

It sounds like you have acquired extra debts after your dmp. You've got at least 3 options which we couldn't advise on without further info

extend your dmp and include the new debts
bankruptcy
iva

The latter two are not good things to have on your credit file if you are trying to pass a credit check for a letting agent, and the oldest defaults probably no longer show.

I'd say now is the time to get that place of your own and stop the payments to the dmp if that helps.

PJCBEL

Thanks for taking time to reply. I wasn't aware I could start a new DMP but when I think about it, it's most beneficial to creditors as I'd be paying it off for more than 20 years. The iva seems to favour companies who run them, ie my credit file ruined, creditors get alot less but company running iva makes thousands. At minute I'm burying my head in sand but I need to make a decision and take action asap. I'm leaning towards bankruptcy as tbh I've had enough of credit and need a clean break for my own sanity. The thought of having no bank account and dealing with official receiver etc is filling me with dread

Johnsmith2016

I'd say get in somewhere now renting whilst you can pass a credit check. Go bankcrupt.
My OR phone call was 10 minute, even if you gets BRO it will still all be over and done with in less than 20 years unlike the DMP. It's a clean slate.
You may or may not get an IPA - getting rent will go some way to using your income and avoiding the IPA when you come to do a SOA for the OR - so I'd get in a rented property for a few months paying it before you apply for bankcrupty .

You can get a bank account with nationwide or Barclays I got both the day I went bankcrupt - they have internet banking, contactless & Apple Pay - the only difference I feel is not having an overdraft.

PJCBEL

Thanks for reply John. I'm inclined to agree with you as a new DMP wrecks my credit rating for 6 years anyway and at 44 years of age I'm saying good bye to prospects of a mortgage. Whole scenario is quite depressing and the hardest thing to overcome is the mental side of trying to answer how or why I've arrived here again. As regards the bankruptcy 'm worried ill play 700 up front be asked to contribute monthly for a number of years and my finances micro managed. Ill also kiss good bye to any overtime that comes my way. No matter what way u look at it this is a desperate way to end up

fatbelly

Generally you'll pay less with bankruptcy than with an IVA - because a IPA only lasts 36 months.

But the majority of bankrupts do not get an IPA because their surplus is assessed as zero or less than £20 per month.

Think of an IVA as bankruptcy for those who have something to protect - this may be a property or a business.

PJCBEL

Can someone answer this? As my old debts have dropped off my credit file is it worth doing anything possible to pay off new debts and continue with DMP for old debts to help build my credit rating, will my credit rating ever be good or should I just get slate wiped with bankruptcy and just accept life without credit, hp or a mortgage?

National_Debtline

Hi PJCBEL

I understand your thinking, but given that you have said you are working 7 days a week and have an evening job, is it feasible that you could continue with the DMP and pay off your newer debts? Especially if you hope to get your own place for your children to stay.

Certainly it’s worth completing a SOA so you can really see what your income and outgoings are. You could also try and consider what your SOA would look like if you were renting your own property.

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

Weigh up what is really most important, protecting your credit file when it could take 20 years to pay back the debt, or a fresh start through bankruptcy or an IVA, which will have a more serious impact on your credit file.

Susie
@natdebtline

Johnsmith2016

Personally I think the other options are pointless.

The debt will take you much longer to repay via the DMP than the 3yr IPA and 6yr of bad credit.

Rent a place even somewhere more expensive than you would normally, so you can put it down on your SOA and leave zero left for a IPA. Clean slate ... and use the 3yr you should have had an IPA to save like mad, nationwide will lend for a mortgage 36months after discharge so it's possible, keep positive.
If if you get an IPA it's 3yrs of things been a bit tight vs years of stress and debt . There is no reason a bankcrupt should not have a bit of money in their pocket so you will be given enough to live on ... just not luxury, and if you live frugally you will no doubt find your better off week to week than you are now paying all these debts with no money your own working 7 days a week... what's the points in living just to work, pay bills and die! Your not going to clear 39k in 6yr via the normal methods so for me this is a no brainer ... do it, move on and start rebuilding . All in my opinion of course!

Johnsmith2016

What's the point in protecting a credit file ? So you can get approved for a mortgage? .... with 39k debt they will tell you do one anyway, so your credit file is as good as toast in their eyes as it is now. For me screw the credit file for now, rent somewhere nice for you and your kids and clean the slate, without the debt burden on your shoulders I know when I did I I was much happier as a person, money and mortgages is not everything in life especially if your miserable with debt.

mwarby

National_Debtline wrote: »

Hi PJCBEL

I understand your thinking, but given that you have said you are working 7 days a week and have an evening job, is it feasible that you could continue with the DMP and pay off your newer debts? Especially if you hope to get your own place for your children to stay.

Certainly it’s worth completing a SOA so you can really see what your income and outgoings are. You could also try and consider what your SOA would look like if you were renting your own property.

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

Weigh up what is really most important, protecting your credit file when it could take 20 years to pay back the debt, or a fresh start through bankruptcy or an IVA, which will have a more serious impact on your credit file.

Susie
@natdebtline

I have to wonder how sustainable working 7 days a week (plus evening work) to pay into a DAMP is. I know I'd struggle to keep going for more than a couple of months. Also if he wants kids to visit, he's gonna need the time and energy. For me the big advantage of bankruptcy (once accommodation is sorted) would be to get back to a normal less stressed life.

I would expect in all 3 options money will be tight (they are all gonna want the disposable income) bankruptcy gets you to the end of this in 3 years, be 5/6 in an IVA and probably 10+ in a DMP