IVA Versus Bankrupcy..

mother_hen_2

We are in the position of going for IVA although I suspect closed to b.r. Could I ask regarding the contents of our property would the bailiffs come in and remove everything?
If we loose our house will we be able to get rented (I thought housing agencies did credit check).

Thats two questions I know sorry but lots of thoughts going through my mind.

tigerfeet2006

Hi and welcome to the board.

Nobody comes and removes essential living items from your proprty. If you have a super duper plasma screen TV or a monet hanging in the loo then you declare them and an agent for the OR will collect them, but in general they are only after things worth more than £1k.

You would generally know if it is not feasable to keep your house and then would secure rented before going BR.

You really need to talk to one of the debt charities and go through all your options with them. If you decide BR is an option then we can help and support you through it. Numbers and links are in my signature.

EDIT This is Martin's article on IVA's
http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf
If you decide an IVA is for you the debt charities will make sure you are set up with a reputable one.

mother_hen_2

Thankyou Tiger Feet, with b.r. I think I've just read somewhere that they can attach something to our earnings to help pay of the debt for a further 3 years is that accurate?? (if so then an IVA for 5 years seems a little better).... why oh why didn't I see this coming - oh and yes have a huge plasma!(recently bought on credit card!) cringe...

tigerfeet2006

If you go BR the allowances the OR gives you are more generous than in an IVA, then if you have over a £99 surplus the OR will take a percentage of this, anywhere from %0-70%. So you will have more dispoable income than in an IVA. An OR's IPA will last for 36 months.

You really do need to ring someone.

ClaireLR

Hi motherhen.

Im no expert on property but it might help if you can say how much equity is in your house. Also what you've been told about paying back for 3 years is only slightly accurate - if you have surplus money over £100 then a percentage is taken towards paying back your creditors for 3 years. If you have no surplus and your situation has not changed by the time you get discharged then you don't have to pay a penny. I think I'm also right in saying that an IVA doesn't allow you to have any surplus (maybe someone with a bit more knowledge could confirm this).

In any case in the first instance I think Tiger is right and you need to contact one of the debt charities in Tiger's signature. They will be able to advise you on your options, it might help to have an SOA (incomings and outgoings) plus a list of your debts to hand when you call them.

mother_hen_2

Could I just clarify something..if we go BR and we loose our house (equity about £25,000) we then have to pay to live elsewhere but as we wouldn't have any credit cards (they currently wipe out our finances each month) anything after rent, rates etc.. a percentage would be taken towards the previous debts (about £60,000) for 3 years.. so realistically we would just as well try and get the energy to fight for an IVA for 5 years as its a loose loose situation for us. I foolishly thought if we went b.r. the debts would dissappear.

tigerfeet2006

MH as I said before your allowances are GREATER when you go BR than on an IVA. You do NOT pay anything back unless you have a surplus of more than £99 and then it is only a % of that surplus. Your debts are completly written off in BR. You credit file is shot for 6 years. On an IVA you are on a tighter budget with no surplus and pay for 5 years and your credit file is still shot and you may have to go BR anyway.

Post up your SOA with out the debts and we will look at it as if you are going BR if you like.

And ring someone.

Ref. the house you will probably be given the oppurtunity to buy back your BI in it if you go BR.

skylight

Hold up.

I think you are confusing yourself slightly. You think its better to pay an IVA over FIVE years and pay ALL of your surplus income towards it, over bankruptcy and possibly pay for THREE years with a much more tolerant surplus level agreed??

Are you both looking at entering into an IVA or going BR? You may or may not lose your house in bankruptcy. That is not a foregone conclusion. In an IVA you would not lose your home - granted. But your first post implied that an IVA may fail and you will be bankrupt anyway. An IVA costs several thousand to set up and these fees are usually payable as the first years payments (so the IVA company doesn't lose out if it fails!)

I agree with Tigers Feet. You need proper, professional advice about this all right now. Its too much of a minefield to make informed decisions on your own (or comments from me!). CCCS are probably the best to use, and get advice for National Debtline too. I have read posts about Payplan and IVA's and its my understanding that they are not good for that at all.

Best of luck in whatever you decide.

mother_hen_2

thanks Tiger feet

peachyprice

Yes, but it's a percentage of your surplus income, not a percentage of your debts.

If you have up to £99 per month surplus left after taking into account ALL reasonable living expenses, you pay nothing. Once you go over £100 you pay between 50% and 70% of your surplus, depending how much that surplus is, for a maximum of 3 years.

If you go into an IVA they will expect you to cut your outgoings down to a minumum and will want a far higher pay back over 5 years, and will want all of your surplus.

peachyprice

Sorry, i was a bit slow there, Tigerfeet and Skylight got in before me!

Also bear in mind, at the end of the 5 years IVA your creditors can still ask you to sell your house so they can have the equity.