Bankruptcy or Iva

Hi all 
I’m after some advice, I have had a debt management plan for about 4 years and I’m about £34,500 in debt , I have recently contacted stepchange to discuss other options and and have been told my other options are an Iva or bankruptcy, I’m absolutely torn in deciding what to do. 
I have no assets only a car worth about £1300 which I would need as I work unsociable hours, would this be taken away from me in bankruptcy? 
I rent a property but if I ever had to move would I have issues being able to rent privately again? 
I have another issue which is I suffer from an eating disorder and and overeating related to other psychological issues(this is how it’s described on my medical records) also other digestive issues. 
my DMP budget has always allowed around £450 for household expenses (groceries and housekeeping )   for this reason. I’m a single person , I know this sounds high but it is what I spend ,  Would this be an issue with an iva or ipa in bankruptcy? 


  • MrFrugalFever
    MrFrugalFever Posts: 1,228
    First Anniversary First Post Photogenic Name Dropper
    Do you mind sharing a bit more info, like a statement of affairs (aka Income & expenditure) or at least your income post-tax and creditors?

    any debt solution will leave your credit file in a poor state for 6 years (sometimes longer depending on the debt solution used). 

    Renting whilst in an IVA is fine and moving to another rented property is also fine, you may need to have a guarantor and it’s definitely wise to have a backup plan for where the upfront deposit etc will come from.

    your level of debt suggests an IVA may be a good course of action but without knowing your financials it’s hard for anyone to advise.
    Save £12k in 2023 challenge #32
    Saved Total = £12,000 / £12,000
    Save £5k in 2024 challenge #32
    Saved Total = £1,184.85 / £5,000

    Secured/Unsecured loans x 0
    Credit Cards x 6 (total limit £24,250)
    Creation FS Retail Account x 1
    0% Overdraft x 1 (£250)
    Mortgage x £140,250
    Debt = £1,014 (0%APR due 22nd July 2024)

    Charity fundraising goal for 2024 = £1,000 for animal rehoming / dog fostering etc
  • Tulip18
    Tulip18 Posts: 8
    First Anniversary First Post
    Hi MrFrugal 
    thank you for your reply , I will upload a SOA I’m just trying to work out how to do it

    thank you 
  • sourcrates
    sourcrates Posts: 28,522
    First Anniversary Name Dropper First Post Photogenic
    IVA`s are mainly designed for those who cannot go bankrupt, because they own an asset such as a house.

    If you have no assets, then there is little benefit going down the IVA route, you may as well take bankruptcy, both will affect your credit file for 6 years, there's little point slogging away at an IVA when you don`t have to, bankruptcy you are discharged in 12 months, IVA it could be 6/7 years.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- The "provit letter" is here-
  • Tulip18
    Tulip18 Posts: 8
    First Anniversary First Post
    Thank you  so much for your reply, I have no assets only my car which is worth £1300, I do need a car with Working unsociable hours but I think they will make me sell it as it’s over £1000? 
    Also what happens with things like sky tv packages and mobile  contracts that you are tied into? My current sky package is £58 which covers landline satellite and broadband and my mobile phone contract is £64 plus £15 for my health watch. 
    I would more than likely have to pay into an ipa as I do have surplus income after my bills are paid but would the ipa payment be similar to the Iva payment or would it be more strict? 

    Thank you :) 

  • luvchocolate
    luvchocolate Posts: 3,239
    First Anniversary Name Dropper First Post Home Insurance Hacker!
    Your car will be fine it's not worth them taking. Mine had a value of £1500 and was exempt. 
    The allowances for BR are quite generous but your mobile is a bit high. 
    If you have £20 surplus an I P A could be set up..this lasts for 3 years. 
    Pop your SOA on here and we can take a look 
  • Tulip18
    Tulip18 Posts: 8
    First Anniversary First Post
    Thank you for you reply I really appreciate it, I’m not sure how to do the soa on here I will work it out and post it , thanks again :) 
  • ManyWays
    ManyWays Posts: 142
    First Anniversary Name Dropper First Post
    In bankruptcy you are allowed a car worth £1000. but your car is in a grey area - the official receiver would be very unlikely to take it to sell it because they have to give you £1000 back to buy a cheaper car, but that would mean they make no money or even lose money after their costs are involved. So your car is probably safe  :)
  • Tulip18
    Tulip18 Posts: 8
    First Anniversary First Post
    Thank you fingers crossed then :) 
  • fatbelly
    fatbelly Posts: 20,213
    Name Dropper First Anniversary First Post Cashback Cashier
    A lower valuation on the car would be helpful. See what the low figure is on Parkers Guide and use that.

    If it's over £1500, ask us for more info
  • Tulip18
    Tulip18 Posts: 8
    First Anniversary First Post
    Thank you, I have done that the lower figure is £1265 

Meet your Ambassadors


  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449K Spending & Discounts
  • 233.8K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.4K Life & Family
  • 246.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards