IVA Refused

Newby14

I had my IVA refused by my majority creditor yesterday. I now feel my only option is bankruptcy. I'm a council tenant with just under £20,000 of debt, I have a car on hire purchase worth £4000 which I'm paying for the next 2.5 years - does anyone know if my car will be taken away from me - I only have credit for £2000 on it as part ex'd my old car against it. I have no other valuable belongings. Can you go bankrupt with debts under £20k? Also will my work pension be affected - will it be taken away - I'm not at pension age? I'd be grateful for any advice as my head is in a whirl!

TheGardener

The car finance agreement will end so the company will probably want the car returned. BR's are usually only allowed a car worth approx. £1000. Do you have anyone who can buy your interest in the vehicle and allow you use of it?
Yes you can go BR with debts less than £20K but you should have more discussions with a debt charity before you go any further
Pensions - no, they wont take it away assuming it is a regulated pension (cant imagine anyone has an unregulated one theses days) Your pension and your continued payment into it is fine.

Newby14

Thanks for your reply. I know someone who has recently gone bankrupt with a car worth more than mine and he's been allowed to keep it and continue to pay monthly for it, that's what I'm finding confusing as I thought it would definitely be taken away. Maybe it depends on individual circumstances.

sourcrates

Hi,

Usually when an IVA is refused, that just triggers more negotiations till an acceptable payment level has been agreed, what does your IP say about it ?

Newby14

Yes the creditor that's refused (debt with them is £5K) wants another £10 a month and another year added onto it - so IVA will be for 6 years, I just don't want this to go on for years and am now thinking bankruptcy is a better option.

TheGardener

Newby14 wrote: »

Thanks for your reply. I know someone who has recently gone bankrupt with a car worth more than mine and he's been allowed to keep it and continue to pay monthly for it, that's what I'm finding confusing as I thought it would definitely be taken away. Maybe it depends on individual circumstances.

I would say this is highly unlikely for a BR. BR would be a breach of the finance agreement and the OR wants to realise the cash from any asset - and with cars that is anything over £1K unless the BR has a specific and allowable reason to having a higher value car such an a chauffeur or Taxi business.

sourcrates

Newby14 wrote: »

Yes the creditor that's refused (debt with them is £5K) wants another £10 a month and another year added onto it - so IVA will be for 6 years, I just don't want this to go on for years and am now thinking bankruptcy is a better option.

Yes i thought something like that would be the case, most IVA`s end up over 6 years, either because the homeowner cant re-mortgage, or some crisis crops up, and payments have to be re-scheduled, or as in your case, the majority creditor wants there pound of flesh.

If you can afford an IVA, then in Bankruptcy, you will have to pay an IPA, (income payment arrangement) for up to 3 years, so on paper, if you can put up with the more stringent restrictions of bankruptcy, that would be the quickest option if you like, wear as you would not particularly notice your IVA at all, as long as things ran smoothly, but it would be for twice as long.

So the choice is going to be up to you, one thing that may decide it for you, is your car, in Bankruptcy its likely you will lose it, with an IVA, you wont.

999frogs

I did the six years and the last year was a pain .. but it kept me my house. Good luck