Some kind advice would be great...

hughie278

Hi all.

Can anyone help me with going bankrupt while in an IVA? has anyone ever done this and is it the same process?

Edit: Also, im self-employed and have been only a short while so i have no wage slips. Do i need to provide proof of income? Because ill have to just give them a rough guide.
And does the money ive already paid into my IVA stay off my debt?

fermi

I believe that officially the IVA has to have been deemed "failed" in order to petition for your bankruptcy.

In practice I'm told that just being in default with regards to payments and being able to make make the declaration that "I cannot pay my debts" is normally enough for the court.

I also believe that funds already paid into the IVA are held in trust for the creditors and therefore in "failure" that these would be distributed to the creditors reducing your bankruptcy debts accordingly.

Are you in arrears on the IVA payments? Have you spoken to the IP/supervisor?

Do you know what the provisions regarding "failure" and any obligation of the supervisor/IP to pay/petition for your BR are in the IVA agreement you signed?

Others here have done what you are considering, so I would keep an eye out for any other comments/help.

hughie278

I remember my IP telling me that they can petition for my bankruptcy if the IVA fails.
I am three payments behind, and i arranged with them to pay it back over the next payment year. This put my payments up an extra £64 a month. When i started the IVA, we agreed on the most i could pay, so how do they expect me to manage it?

I slipped behind because of car repairs mainly. I had to buy a new car, get lots of repairs etc(i have receipts) so i missed the IVA payments.
When we agreed this new payment deal, the IP said the only other option was to go bankrupt, which i should have done then.

I only owe about £12000, and ive paid about £1500 of that into the IVA.

Another thing, as im self employed, i read that the tax for this year is taken into the bankruptcy and my tax code set to ) for the rest of the year. Thats sweet.

So anyway, i TRIED to pay my debts back with an IVA, but couldnt in the end. That must look favorable.
Shall i tell my IP i cannot afford it anymore and ask him to file for bankruptcy?

fermi

hughie278 wrote: »

Shall i tell my IP i cannot afford it anymore and ask him to file for bankruptcy?

Only you can decide that.

"Can" petition for your bankruptcy is not always the same as "will".

You should take a very close look at the terms and conditions of the agreement. Many IVA 'companies' will do their very best to weasel out of paying for it.
That seems to especially common when only a relatively low sum (as in your case) has been paid in so far. I seem to recall a few companies claiming in your sort of circumstances that certain "contractual" fees must be met first and so even when someone had paid in £1-2K there was no money "left" for them to pay for your BR.

So, check your contract and check with the IP/supervisor what will happen.

If at all in doubt I would also consider calling one of the organisations in my signature for advice. Probably CCCS or PayPlan since they run IVA's of their own now.

hughie278

Ok thanks.

Being self employed. when they give me a nil tax code, i obviously dont have to pay my tax to them until the date id have had to pay the Inland Revenue, right? Ive only been self employed since june this year, and wont have a return to fill out until April 2008.

TaxAvoider

Only just started the process , but Zero Tax Code is a neutral thing , someone will correct me if I am wrong , but what it means is that in the current tax year of BR being declared, you pay no tax to the HMRC ..... BUT ..... you pay the same amount to the Official Receiver

Not sure how this is worked out but I will be finding out soon I guess

nomoneyprobs

Hi, I can't help with the IVA stuff, but I was self employed when i filed Br and they or just wanted a copy of my weekly books to prove my incomes and expenditures, They haven't told me about my tax code yet due to me not working because of illness, but as long as you can provide a rough estimate of your drawings from the business they'll be happy with that.

Hope that helps

Ian

hughie278

I just want to get the ball rolling now and see what happens.

From the articles on here, an IVA wasnt the best option for someone with my debts. I have no assets. Im self employed, but not, so no company to shut down. I live with my parents, and im only young.

nomoneyprobs

hughie278 wrote: »

I just want to get the ball rolling now and see what happens.

From the articles on here, an IVA wasnt the best option for someone with my debts. I have no assets. Im self employed, but not, so no company to shut down. I live with my parents, and im only young.

You'll feel much better once you get the forms filled in and the court date is set, from what you've written above it sounds like br would be a liberating experience for you, you could end the circle of debt your in and look forward to a new life.

I would talk to 1 of the debt charities as well as your IVA provider because they will give you an independent view on things.

Ian

piggeh

I would add one thing - if you are self employed, and plan to continue being self employed in the future, then you need to consider what would happen if your own business started failing at some point. If you declared bankruptcy the second time, the effects would be far greater.

tigerfeet2006

You really need to seek independant professional advice on this. It is very important you do. We don't know your entire situation and may miss something. Ring one of the debt charities (see my sig.) they will give you impartial advice. You will need to do this anyway if you decide to go BR as the Judge will ask if you have taken professional advice. We can give you as much help as we can if you have any questions.