IVA advice

P1BP27 Forumite Posts: 22
Fourth Anniversary 10 Posts Combo Breaker
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


  • P1BP27
    P1BP27 Forumite Posts: 22
    Fourth Anniversary 10 Posts Combo Breaker
    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?
  • Porridgecat
    Porridgecat Forumite Posts: 311
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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
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  • sourcrates
    sourcrates Forumite, Ambassador Posts: 27,696
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    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.
    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- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • ManyWays
    ManyWays Forumite Posts: 138
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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.
  • fatbelly
    fatbelly Forumite Posts: 19,231
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    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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