Help please........IVA or BR for me please.....

peterparker12

Hello everyone,

Please can someone shed light on this dilemma.
not sure what debt plan to go for

I earn about £541 extra a month and then often £300 a month in irregular overtime for NHS and I have to do it! And thats ok...but id keep some in an iva....so.BR or IVA..:)

thanks

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 0

Number of cars owned.................... 0[b]

Monthly Income Details[/b]

Monthly income after tax................ 1900

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 1900[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 520

Management charge (leasehold property).. 0

Council tax............................. 70

Electricity............................. 35

Gas..................................... 35

Oil..................................... 0

Water rates............................. 20

Telephone (land line)................... 0

Mobile phone............................ 14

TV Licence.............................. 13

Satellite/Cable TV...................... 0

Internet Services....................... 32

Groceries etc. ......................... 230

Clothing................................ 45

Petrol/diesel........................... 0

Road tax................................ 0

Car Insurance........................... 0

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 140

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 20

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 20

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 15

Entertainment........................... 50

Holiday................................. 50

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1359[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 0[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Loan...........................55000.....520.......11.9

Dad............................31000.....0.........0[b]

Total unsecured debts..........86000.....520.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,900

Expenses (including HP & secured debts). 1,359

Available for debt repayments........... 541

Monthly UNsecured debt repayments....... 520[b]

Amount left after debt repayments....... 21[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -0

Total Unsecured debt.................... -86,000[b]

Net Assets.............................. -86,000[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

thevdm

The only problem I see on here is that the creditor (for the loan) may possibly be unwilling to agree to an IVA as it currently shows that you are able to pay the agreed payment (although I understand this is scraping it as well as your dad not receiving any payment). The best bet if you plan to go that route would be to speak to an advisor as they will have a better idea if a creditor is likely to agree to an IVA with that SOA.

Bankruptcy would offer a quicker break from the debt (3 years of payment vs 5), but may cause extra issues down the line if you plan to buy a house etc...

My partner and I were on an IVA a couple of years ago, at the time she worked in a job with regular overtime, the provider of the IVA implied that as the overtime was regular that it would just be counted as normal income, meaning the 50% of the overtime that is usually kept would be taken in the payments. I'm not sure if this is how it's supposed to be done, but may be worth looking into. In the end we cancelled the IVA due to the variable income causing more hassle than it was worth and took different routes, myself going bankrupt and my partner making offers to her creditors. Variable income and an IVA can be quite a headache.

peterparker12

thevdm, thanks for the reply. I guess what I'd struggle in BR with is long hours at the hospital for no pay. At least with an IVA I'd get half. It's a thinker. Also, if I got laid off I'd be stuffed and lose it all...

has anyone else had the BR overtime vs IVA overtime decision?

mwarby

Your presents and entertainment budget items may not fly in either an IVA lr bankruptcy. I'd go for bankruptcy, it'll be over quicker and it can't fail. As for an IVA being better than bankruptcy for a future mortgage, my limited experience suggests that lenders view them almost exactly the same, and lenders are interest in time since discharge or completion (discharge from bankruptcy is 1 year, a normal IVA is 5 years). With either you'll struggle for 5 to 6 years from when the IVA or bankruptcy starts. I'd go bankrupt, save the extra 2 years of repayments and you'll be in a better place IMHO

thevdm

From my experience of being in a failed IVA and having gone through bankruptcy, the SoA for bankruptcy is a lot more lenient than that of an IVA.

I found that on an IVA they don't really accept any provision for presents or entertainment, whereas on bankruptcy they didn't really care much about it. The thing about an IVA is that if something unexpected crops they expect you to take a payment break, extending the IVA period, wheras with the bankruptcy SoA they set it out in a way that you can actually live on without the need for payment breaks.

https://debtcamel.co.uk/how-long-do-ivas-last-how-many-fail/ 

There is another article somehwere (I can't find it at the moment) which shows the percentages of IVA's that extend past 60 months, it was quite shocking, with a reasonable number still active and being paid into for over 10 years after they were set up.

If an IVA fails in the first year, chances are that your debt situation will not have changed at all, as most of the first year goes towards paying the IVA fees. Even if it fails a few years down the line, what difference is £86,000 in debt vs £60,000. It will be unlikely to change your ability to pay the debts off amicably. Personally I'm not very keen on IVA's, if a debt solution has the remotest ability to take money from somebody without changing their circumstances, then it's not a very good solution. The only people who benefitted from our IVA was the IVA provider due to the problems of managing an IVA with variable income.

Check out "When an IVA might not be right for you" https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/individual-voluntary-arrangements/is-an-individual-voluntary-arrangement-right-for-you/checklist-for-deciding-if-an-individual-voluntary-arrangement-is-right-for-you/

thevdm

Found the article: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/679681/IVA_Outcomes_and_provider_breakdown_as_at_31_December_2017.pdf

The table on page 6 gives in interesting insight to the true length of an IVA, bare in mind this data is from 2018, yet it still shows 2 ongoing IVAs from 1998 (running for 20 years )

peterparker12

Thanks so much for your help, Im stuck because of  my compulsary overtime. Its a kicker. I might even choose an IVA simply because I can keep at least half. No other reason, no assets, just id work 30hrs over a weekend for zero recompense.

mike864

peterparker12 said:

Thanks so much for your help, Im stuck because of  my compulsary overtime. Its a kicker. I might even choose an IVA simply because I can keep at least half. No other reason, no assets, just id work 30hrs over a weekend for zero recompense.

I would advise that you reconsider, I had the option of going for an IVA or B/O and I changed my mind from one to another over a period of several weeks, final decision made I just did it, B/O.
Best decision I have ever made, I dumped my 'rucksack full of rocks' on the Courts steps - done, finished!
That was five years ago and I am getting back on track, as an aside one of my wife's colleagues entered into an IVA and it was pure purgatory, why would anyone put themselves up for 5 years of accounting for every penny spent and they had to, awful experience, TBH I think its a pretty despicable option, so, so glad I didn't entertain this option.
Good luck
Mike

On_my_way

Personally I wouldn't choose either. I would look into the Dave Ramsey system and seriously get real with yourself about spending and how you will pay these debts off. 

mwarby

The Dave Ramsey systems seems to be a fairly basic budgeting system - it may well be effective and easy to follow 

However the OP has 86k of debt and 500 a month available to repay it, which assuming no interest and charges would be some 14 years, if somehow twice the amount could be found it’s still 7 years. This would not be easy, and I suspect has a high chance of failure due to that

peterparker12

Thanks for your replies chaps. 

Mike864 said you struggle with the "keep no overtime" thing as well. I can't imagine working all weekend and having to go in tired for nothing...but then again it is for 3 years not 5. I'm leaning towards BR now really.