On IVA but want to go bankrupt

magoo2516

Hi all
Am on IVA for 4months now, (£13000debt ) but now feel I should have went bankrupt. Rent house-no savings-no assets. I have teenage son in sixth form, but daughter recently came to live with me and ex disputing child benefit, evrything going up in price and I am in public sector with pay cap. Car on the way out , and have also stupidly kept a credit card open which now has 1000 pounds debt on it. The anxiety is killing me-up at 4am, constantly worried.
My brother suggests just stopping the IVA payments (£140) for three months and paying the £700 to go bankrupt. I feel like this would be a better option for me-what do you think? Thanks in advance.

GothicStirling

Personally, I don't think its worth getting blacklisted for 6 years for £13k - you definitely won't be able to do anything about getting a new car or renting somewhere else, or even opening a different bank account. Have you posted a statement of affairs on the Debt-free board? If I where you, I would look into seeing if I could reduce living costs or earn more money, before contemplating bankruptcy.

sourcrates

I wonder why a debt relief order was not mentioned to you prior to signing up for the IVA.

IVA`s typically are for larger amounts of debt £30,000 plus, although there are no set limits, they cost a lot to set up and maintain, which is why a lot of them are mis-sold.

Posting your SOA on the DFW board will tell us which option would best suite you, link here :

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

National_Debtline

Hi Magoo2516,


I would suggest you look at the terms and conditions of your IVA carefully, and make sure you get free advice from one of the debt charities before you stop your payments. You may find that the IVA is destined to fail if you have kept credit outside of the IVA (this is normally a breach of the contract).


You may be correct that an IVA was not the best option, but you need to discuss your options in more detail to establish if bankruptcy or a DRO would be that much better. In bankruptcy, not only would it cost you £680 to apply, but if you have more than £20 per month available, in surplus income, that will be taken for 3 years in an Income Payment Arrangement (which could mean bankruptcy costs you over £5000) plus the negative implications of the bankruptcy. And a DRO would be unsuitable if you have more than £50 per month surplus.


You also mentioned that your car was on its last legs, so you need to consider how you would repair/ replace this in any of these options (all would be difficult). I think a SOA would help others to further assist you.


Laura
@natdebtline

Johno100

GothicStirling wrote: »

Personally, I don't think its worth getting blacklisted for 6 years for £13k - you definitely won't be able to do anything about getting a new car or renting somewhere else, or even opening a different bank account. Have you posted a statement of affairs on the Debt-free board? If I where you, I would look into seeing if I could reduce living costs or earn more money, before contemplating bankruptcy.

Her IVA will have already have shafted her credit rating, it gets treated exactly the same as a bankruptcy for credit purposes.

amstel2

Johno100 wrote: »

Her IVA will have already have shafted her credit rating, it gets treated exactly the same as a bankruptcy for credit purposes.

Quite agree. Remember if you see through the 6 years of the IVA it will still be on your cr file for another 6 years after so your file is rubbish for 12 years.

Go BR falls off after 6 years. Granted it will be on the London Gazette forever but that's only an issue for mortgage applications.

I was in a similar situation to you a few years ago re a mis-advised DPP & IVA & i owed a lot more. I cancelled my IVA after 3 months used the money saved to go BR with an IPA under half of what the IVA payment was. It was the best thing i ever did my only regret is that i didn't do it sooner.

db2016

Not quite right on it being on gazette forever. It's on for the usual 12 months whilst your bankrupt then when discharged. 3 months.

Potbellypig

db2016 wrote: »

Not quite right on it being on gazette forever. It's on for the usual 12 months whilst your bankrupt then when discharged. 3 months.

That isn't correct.

sourcrates

Just to clarify, any bankruptcy/insolvency, only shows on your file for 6 years, no exceptions.

Nothing to do with bankruptcy lasts forever, after 6 years you get a clean slate.

bewildered1

sourcrates wrote: »

Just to clarify, any bankruptcy/insolvency, only shows on your file for 6 years, no exceptions.

Nothing to do with bankruptcy lasts forever, after 6 years you get a clean slate.

Except if you apply for a mortgage. If you are asked if you have ever been bankrupt, and you likely will be asked, you legally have to answer truthfully. This could have an effect on whether or not you are accepted for a mortgage and if you are accepted, what interest you will be charged. In this respect bankruptcy will follow you forever.

forgotmyname

Your name and address will be open for anyone to search on the London Gazette. That will be available for a lot longer than 6 or even 12 years.

Some insurers ask have you ever been bankrupt also.

Future landlords or employers could easily google your name and find your bankruptcy.