Bankruptcy or IVA

craigmorgan

hi, firstly, sorry if i've posted this in the wrong section.

me and my partner have been struggling with debt for the last 20 years or so and it's become unbearable now.

we have embarrassingly been trying to keep afloat without resorting to these extreme measures and have amassed over £50,000 of debt

we have a mortgage of £103,000 that we are never going to be able to pay off.

i would prefer not to lose our house until the kids have flown the nest as it's where they've grown up and love it.

are we best going for an IVA or bankruptcy, i am self employed (currently with no work due to COVID) and my partner is a care worker (not much above minimum wage).

also would we be better getting a financial adviser to look at our situation as we are in a real mess and need a complete overhaul.

there are so many other issues with lack of pensions etc. but feel i'm rambling on already.

many thanks for any advice, craig

sourcrates

As a homeowner you do not want to go bankrupt, the house would be forfeit.
Post a statement of affairs, it’s looking like an IVA possibly with debt of 50k.

sharpe106

As above you don't want to go bankrupt unless you really can't help it. If you don't have a link for a SOA one is below

https://www.lemonfool.co.uk/financecalculators/soa.php

fatbelly

I would say that the choice will be between a Debt Management Plan and an IVA.

Why are you considering bankruptcy? Is there no equity in the property?

If you fill in that soa, then we won't have to ask a lot of questions.

craigmorgan

thanks for the replies, really appreciated

fatbelly we paid 103,000 for the house and the bank has it valued now at 107,000 so no real equity

i will fill in the soa and post it here when done, thanks again

RAS

Hi

One thing you need you do considering the lack of equity is seriously research how much it would cost to rent a similar property locally?

You may find it costs less or that you'd be exchanging low cost secure housing for insecure rentals costing more with high fees and entry costs every 6 months. Just depends on your area.

craigmorgan

Just a query. Am I better to use national debt line or a financial advisor to sort all this out. I’ve been told national debt line are creditor focused and an IVA would probably triple after a few years. Thanks

RAS

Please read sourcrates' message above and use the links in their signature, because they go to genuine debt charities not to financial advisors or debt companies using the same names.

IVAs always require fees but some like stepchange have lower fees and anyone else can charge megafees with no come back as there is no legal limit.

Have you checked the local rental situation, as this affects your situation.?

sourcrates

craigmorgan said:

Just a query. Am I better to use national debt line or a financial advisor to sort all this out. I’ve been told national debt line are creditor focused and an IVA would probably triple after a few years. Thanks

Financial advisors advise on investments, not debts, different area completely.
Don’t listen to rumour, National Debtline are independent debt advisors, as are stepchange, either will give you advice based on your circumstances, IVA payments only increase if income does.

fatbelly

craigmorgan said:

thanks for the replies, really appreciated

fatbelly we paid 103,000 for the house and the bank has it valued now at 107,000 so no real equity

i will fill in the soa and post it here when done, thanks again

I think equity is only disregarded if less than £1000, so considering your interest is 50% this is borderline on those figures. The problem is that in  bankruptcy the valuation  is done at the 27 month point and so your equity may well increase and I would relegate bankruptcy to third choice on that basis.

So the choice may well be between DMP and IVA. I've bookmarked this tread so I can take a look. 

sharpe106

How long have you owned the home for?, have you remortgaged again?