Why everyone forcing IVA over bancrapcy

sourcrates

Let me try and explain this as clearly as I can, yes bankruptcy would clear all your debts, however, what you currently pay towards your credit debts, is only about a quarter of your actual monthly income.

So far you have been unable to manage, on what you earn, hence the borrowing, so unless you drastically cut back on your expenditure, you will be back in the same position again within 12-24 months.

Your rent/childcare and food costs is what are dragging you down, now I understand those costs can`t be reduced, so in my opinion, you would be in much the same position if you just defaulted on your credit debts, and paid say a token amount each month to them, say £1 each for the time being, as you would be if you opted for bankruptcy, so why put yourself through all that.

Bankruptcy is not always the best way to go, in order for it to work, in most cases your expenditure must be able to be reduced, I don`t think yours can as long as your kids attend nursery, and you live in London, cost`s there are high, as you are well aware, token payments possibly leading to debt management would be the way to go with this.

RAS

Is there any reason why the far relative cannot go back to Poland now instead of in April? That could help you cut your living costs a bit.

And have you got a business budget alongside this? Is your income the net profit from your business or the incoming money from sales?

Czeskyy

Thank You for a feedback and advice, 
In my case I don't take in credit my relative who lives with us , he is not financial burden to us neither he is supporting us with regular payments. It's more like if he is  buying food time to time or looking after kids sometimes and a ending up to be square deal , he is never home mostly working or staying at his GF. 

If comes to all informal solutions like DMP im talking them off the table straight away as for me is same as going in to IVE but is legally bounded.

I have been in dept for many years now I can say every time I adjust budget to clear something happened and it putting me back in debt for example recently cost rises cost us roughly 300-400 extra a month comparing to year ago.

I will fix my budget again to balance every month but this will not allow me paying anything towards my debts, however if I take off car finance I be on potential small surplus and idea of giving away this surplus towards all debts for another god know how many years is killing me.

Hence I'm trying to get as much information about bankruptcy as potentially I be able to be debt free in 12 months and if I need to pay small amount of money towards bankruptcy I'm happy to do so as it last max 3 years not 5-6 like IVA or eternity in case of DMP  

RAS

A DRO lasts a maximum of 1 year with no payments. Why do you want to tie yourself to 3 years of payments?

Czeskyy

Please correct me if I'm wrong in my thinking here, 
If I now sell my car and settle HP , same time surplus money use for bankruptcy application, I can potentially balance my budget ( no fuel and insurance charges) and after year I can be potentially debt free, I mean time my girlfriend can potentially look for cheaper car perhaps HP option to match public transport expenses we would have to pay anyway. 

I'm happy as well to pay any surplus towards my debts but I would like to have point in time it all will end and potentially in two years from now when my daughter will be able attend to school full time I be able to work full time myself.

I'm fully understand idea of DMP , token payments ets and it all sounds for me like just taking brake from current situation and getting back to debts in future without any fixed point to end plus is not legally binding me and creditors.

I'm not trying to be to smart or cheeky, currently my main objective is to provide for my kids , not to put burden on my GF, and potentially get of debts asap

RAS

Can you stop talking about DMPs, please.

Read your HP agreement, you may be able to terminate the contract by handing the car back. Or to sell it, pay off the debt and buy GF a new one?

Then you apply for a DRO, which costs £90 so a lot cheaper than BR. Use CAB as Stepchange are giving up their contract. If you are accepted (your surplus is less than £75 per month on average), you pay nothing more and the whole thing is over in a year.

Czeskyy

RAS , thank you for sensible solution.

I do apologize I mentioned DPM often however previous replies suggested it as solution hence I wanted to clarify.

DRO sounds like solution.

One more concern of mine how Official Recovers can engage my GF in my potential DRO ,or Bankruptcy ??? 
Will she be actively involved and need to send bank statements, or her expenses etc  or rather is everything focused on me and she is only taken as additional income towards household.

I'm asking cuz I don wish her to be in stressful position cuz it may have serious consequences on our relationship 

sourcrates

If you are living together as a couple, then usually household income is used to calculate budget etc.

You would be the bankrupt party, not her, the OR would have no authority or interest in her, other than the combined income situation, so yes she would have to provide evidence of her income, pay slips or benefits award letter etc, but the OR would have no authority to make her do anything.

Czeskyy

Big thank You for anyone who helped here with advise. 
Thank You 

ampersand

Hello Czeskyy -
You are having a lot of good input here from people who really know what they're talking about.

It is not for confusion that I'd like to add another strong source of help, much praised by Martin Lewis, whose site you have fortunately found your way to. 

CAP is not in competition with other groups offering help and - as Martin says - do not be put off by their name:
Christians Against Poverty. 
https://capuk.org/

Their beliefs are daily in action, helping people out of debt!  It is their sole reason for doing this.

You will also find they help you with the many oddities of written English.

This will also be important with the insurance correspondence involving the other cars.