IVA, DRO and Bankruptcy

JordanJamesMatta88

Hi all, 
I'm new here so hope I'm using the forum right.
In a little debt trouble, trying to figure some stuff out so nothing to worry about yet, but my mind always goes worst case scenario.
Did some research about debt solutions and came across IVAs, DROs and bankruptcy.
I have a basic understanding of what they all are but don't quite understand how severe each is.
Can someone clarify the levels of severity for each? 
Thanks, 

JJM

sourcrates

Well that`s not the way to measure a debt solution to be honest.
Its your circumstances that dictate which solution best fits your situation, all three are insolvency solutions, obviously bankruptcy is the more restrictive, no real difference between the other two in terms of severity, its basically what fits your needs.

Suseka97

It's an interesting question and it might help to know why the 'severity' of a debt solution is important in your decision making process.  For example, bankruptcy is a less favourable option to home owners, or where it could have an impact on your job.  Formal solutions such as bankruptcy and IVAs are less flexible than, say, a DMP and a DRO is only a possible solution depending on your level of debt and the amount of income you have left when all outgoings are taken into account.

You say you have nothing to worry about yet, but that you are looking at the 'worst case scenarios' - so perhaps if you expand on your situation a little more, then others may have some useful insights based on your circumstances.

fatbelly

Do you need insolvency? Post a statement of affairs and we'll give you our opinion

JordanJamesMatta88

sourcrates said:

Well that`s not the way to measure a debt solution to be honest.
Its your circumstances that dictate which solution best fits your situation, all three are insolvency solutions, obviously bankruptcy is the more restrictive, no real difference between the other two in terms of severity, its basically what fits your needs.

What im trying to ask is, which one will impact my ability to borrow in the future the most/least and which one will restrict my life the most/least for the coming years? Thanks in advance.

JordanJamesMatta88

Suseka97 said:

It's an interesting question and it might help to know why the 'severity' of a debt solution is important in your decision making process.  For example, bankruptcy is a less favourable option to home owners, or where it could have an impact on your job.  Formal solutions such as bankruptcy and IVAs are less flexible than, say, a DMP and a DRO is only a possible solution depending on your level of debt and the amount of income you have left when all outgoings are taken into account.

You say you have nothing to worry about yet, but that you are looking at the 'worst case scenarios' - so perhaps if you expand on your situation a little more, then others may have some useful insights based on your circumstances.

By severity, and why it's important to me, I'm in a tough situation right now because lockdown has meant i've been out of a job for almost the last year with very little furlough pay and I have been borrowing to pay rent. But, I will hopefully be starting a new job in a couple of weeks which will make my situation better in the long term (i know i will be ok then) but in the mean time I don't want to fall too far behind on my payments which might force my hand into entering into some kind of insolvency. Basically, if I do have to do this - I don't want to be completely restricted when I start getting paid regularly again. From what you're saying a DMP may be the best option as its flexible you say?

sourcrates

Before going into the in`s and out`s of debt solutions, you should perhaps tell us how much debt you have, as this determines more than anything, what option you take to deal with it.

Suseka97

Sorry to hear you've had a tough time with regards to your work situation and furlough... 

As Sourcrates has said - if you could elaborate on the level of debt you have or how behind in payments you are, then it will help to determine what your best option might be.

I chose to avoid any type of formal insolvency solution (bankruptcy or via) and our debts were quite significant at the time.  We chose the DMP option, which was quite restrictive at the start but once I had a handle on how DMPs work and stopped worrying about how my creditors might react/respond to the situation I went self-managed and never looked back.

The message here is that there are a range of debt solutions available to suit all types of situations and there will be one that suits yours, if you find yourself needing one.  So be specific and you'll get the best advice from the wise and experienced forumites on this board  

JordanJamesMatta88

Suseka97 said:

Sorry to hear you've had a tough time with regards to your work situation and furlough... 

As Sourcrates has said - if you could elaborate on the level of debt you have or how behind in payments you are, then it will help to determine what your best option might be.

I chose to avoid any type of formal insolvency solution (bankruptcy or via) and our debts were quite significant at the time.  We chose the DMP option, which was quite restrictive at the start but once I had a handle on how DMPs work and stopped worrying about how my creditors might react/respond to the situation I went self-managed and never looked back.

The message here is that there are a range of debt solutions available to suit all types of situations and there will be one that suits yours, if you find yourself needing one.  So be specific and you'll get the best advice from the wise and experienced forumites on this board  

thats great thank you - i will come back on here again if my situation gets any worse, I really appreciate it!