From an IVA?

Themrhall

Hi. I just need a little advice. I know it could be completely the wrong time to be thinking about this too. 

OK a couple of years ago I got into bad debt through payday loan cycle and gambling (which I got under control now) so took out an IVA. I pay £152 a month and they say I have at least 2 years of monthly payments left. 

In the meantime, I've gone from minimum wage supermarket worker. Single to meeting a partner and moving in with him and him owning his own restaurant (which at the moment is closed due to Corona virus so making no money  ) so the money we make from that goes to us (or to his accounts really but spends for us) and I also get a weekly wage to make sure I'm paying Tax and NI Insurance. 

So my partner was saying the other day that I should possibly think about stopping the IVA and declaring myself bankrupt. That way I'm saving myself about £2000 and clear my credit quicker and while I'm still earning from my role in restaurant he can support me until bankruptcy ends. Also I know while we making no money this is probably a bad time to be thinking about this but I just need a little help with what I can and should do or if it's a good idea. 

Thanks. 

mwarby

if you can afford 152 in IVA repayments the OR is likely to conclude you owe something in terms of an IPA. You could of course decide to work much less, such that your expenses matched or exceeded your outgoings, but bear in mind the OR will perhaps be suspicious of such a move and they can do a lot of digging (so stay honest)

also the 6 years of ruined credit history will repeat, it would be another 6 years from when you went bankrupt. If you ever want a mortgage there’s a good chance you’ll be asked about if you ever have been insolvent, having to say you had a failed IVA and then when bankrupt won’t look great

if you did go down this route you’d first need to fail the IVA, this will take months I expect. You’d then need to prepare your statement of affairs and pay the £680(I think, not sure if it’s gone up) in fees

An alternative option might be to look at a full and final settlement, if your partner can provide a lump sum of around £3k(maybe less if your income has gone down and your income and expenditure are no longer accurate), if creditors accept your offer you are then free and clear of IVA

to be honest I’d stick with the IVA for 2 years, if possible 

Themrhall

Thank you for the advice. Most likely sticking with IVA is best option. 

mwarby

The IVA was probably a bad option from day one, but as your now around 3 years in (2 to go) it’s a little late to change really. 

The best thing to do is make sure your IVA company are up to date with your circumstances, if your not earning let them know, if expenditures have changed let them know. You don’t want to be over or underpaying