Bankruptcy my only option?

Tenerife0308

Hi,

 

I am after some advice if possible.

 

Im 32 years old living with my partner & have struggled with debt for the last 10 years. About 5 years ago it spiralled out of control, I contacted Stepchange and was placed on a DMP. I had my little girl in August 2022. Once maternity leave had finished, I returned to work part-time and it was agreed that a DMP was no longer doable so went over to an IVA. 

 

I have been paying into the IVA for 6 months now, household bills and nursery fees have increased and im really struggling to get through the month with no money/being minus as in owing family. When setting up the IVA they also took my partners wages into account so its not as if he can help any more than he already is. 

 

We are in a rented property and the car is in my partners name, so I have no assets/savings etc. I feel stupid for getting myself into this situation, I am currently dealing with depression and anxiety due to family health issues, so this added money stress really isn’t helping. 

 

As far as I am aware my only other option is bankruptcy? If I was to go ahead with this do they still take my partners wages into account? My family are also unaware of my money issues so going bankrupt wouldn’t be published anywhere other than the insolvency register, would it? If anyone has gone through this what was the process like? Did it take long? Sorry for all the questions. I just want this whole situation sorted. 

 

Any help/advice around this would be much appreciated.

sourcrates

An IVA was probably not the best option for you, how much debt do you have currently?

The budget allowance in bankruptcy is surprisingly generous, a household budget is normally used, just be honest, if all partners money goes on household bills, just say so, anything over about £20 in disposable income would see an income payment arrangement for 3 years, depends what you earn really.

Only shows on the insolvency register, and in the London Gazette, but who reads that.

RAS

Agreed, an IVA was nor going to be a good idea for you. If you owe less than £30k, a DRO may be possible.

Tenerife0308

Thanks for your responses. 

My debt is £32000 approx - I have gone back through my breakdown and amended the things that have increased and as a household we’re about -£200 a month currently so need to ring up the IVA company and explain this. 

Also thanks for informing me about the income payment arrangement I was unaware of this.. any information is really helpful because I have absolutely no idea I went with the IVA thinking it was the best option for me.

Tenerife0308

sorry, also if they take it from a household income will I need to provide evidence of my partners earnings? his only recently found out about my debt situation (again not ideal) and is happy to support me where he can with bills but because none of the debts are tied with him doesn’t want to provide more information than he needs to?

fatbelly

I'm not seeing anything in the original post that would exclude a DRO but the debt limit is 30k.

Just to be clear, all three insolvency options (IVA, DRO, Bankruptcy) are individual. Your partner's income is only relevant in so far as it dictates how the expenditure is split between the two of you.

In bankruptcy, if the partner refuses to disclose income then a 50/50 split is assumed. If the partner earns less than the debtor then this can be a useful tactic.

Tenerife0308

Okay thank you. we had to provide the IVA person with my partners bank statement to prove how much we pay rent for bankruptcy will they ask for a copy of his payslip?

fatbelly

In a bankruptcy application they will ask for partner details, and proof, but a third party is not forced to disclose details, hence the 50/50 default position.

sourcrates

Believe it or not, bankruptcy is a much simpler, more straightforward application than an IVA would be.

A simple, uncomplicated case, such as yours, is nothing more than an online application, providing the details that are asked for, and payment of the fee, followed by submission.

You are usually declared bankrupt within 48 hours, it includes all your debts, known about or otherwise, you have a short phone call with the OR`s office, to explain your circumstances, and for all intents and purposes, that is it.

You are discharged after 12 months, any IPA lasts for min 3 years, your credit file is marked for 6 years, after which it all disappears, except for the entry in the Gazette, which stays forever basically, but that`s not an issue for most folk.

Not trying to trivialise the process, it can be very complex if you have assets or property or other issues going on, or you don`t cooperate with the OR, but most simple bankruptcies pass off really smoothly and without incident.

Tenerife0308

Thanks so much for your advice. Il ring up on Monday and go from there🙂

maxmycardagain

Scan and disect the debts to see the exact figure, you may NOT pay off any to drop the total (making them a preferential debt payment) but if, over some months, you could pay ALL the creditors an equal amount id "guess" that would be ok, i think (maybe) a 3rd party could pay off a debt also, i know i did, without repercussions

DRO £90 fee
Bankruptcy £700 (i think) fee

and thats about the only difference really, pay the extra £600 and not pay the £2000 off the £32,000 total, its your call

I think you will already know the pros and cons of bankruptcy