IVA advice

in IVA & DRO
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P1BP27P1BP27 Forumite
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Due to covid-19 my new business I set up in February 2020 as not gone to plan

I currently have £67,000 debts which is made up of 4 overdrafts and 10 credit cards
The question is simple I currently get £410 in UC and have moved back home with parents. I give them £130 a month to cover food and use of the car. The only other 3 costs are £30.00 mobile, £35.00 gym £25.00 petrol & going out once a month £20.00 which leaves me £170

Can I do an IVA on £170 a month for 6 years as this is works outs to £10,200 which is 15 percent of £67,000 as most websites says write up to 90 percent of your debts can be written off. Hopefully things will pick up and I am looking for work so that payment can always go up.
If this is not possible I will just pay the £620.00 and go bankrupt. Please advise

Many thanks

Replies

  • P1BP27P1BP27 Forumite
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    Anyone have any kind of feedback on this please as Someone suggested I do DRO as this is for people on low income which I am. But the question is can I do  DRO on 67k?
  • edited 12 April 2021 at 4:29PM
    PorridgecatPorridgecat Forumite
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    edited 12 April 2021 at 4:29PM
    I'm sure sourcrates or fatbelly will be along to help. I don't know a great deal about this but an IVA is mainly for people with property to protect, if you don't have property bankruptcy might be a better option. Stepchange can give you free advice on your options.
    Mortgage Free 23 December 2020
    Savings £9671 / £20 000 goal
    Emergency Fund £216 / £1000 goal
  • sourcratessourcrates Forumite
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    Hi,

    You can`t do a DRO as the threshold is currently only 20k (rising to 30k soon).

    You have very little disposable income to play with, a standard budget would be applied, and its likely you would not qualify due to that reason.

    If you have no assets, and things won`t improve moneywise, pay the bankruptcy fee (currently £680) and go bankrupt.

    IVA`s are meant for those with assets to protect, who have massive debts, you have no assets, so its a pointless exercise, and if your income does increase significantly, your payments could rocket, you could end up re-paying the full amount, don`t listen to the hype surrounding IVA`s, they can be good for some people, but in your case i would recommend bankruptcy instead.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay for a Debt Management Plan.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • ManyWaysManyWays Forumite
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    With no assets, no job and your only income is benefits, bankruptcy is your obvious choice. As Sourcrates says, there is no advantage to an IVA, it can fail, and you will end up paying a lot more for 5 years if your situation improves.
    IVAs and bankruptcy have the same bad effect on your credit record. Bankruptcy will give you a clean start from the business failure and not be a millstone round your neck for 5 years.
  • fatbellyfatbelly Forumite
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    I agree with the above. 

    The bankruptcy fee is £680.

    With no property, little income, and using someone else's car this seems the better route.

    There will be no income payments order if you are on UC

    Done and dusted in 12 months
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