bankruptcy or IVA

stevelinz

Hi,

What is the benefit of a IVA compared to bankruptcy. And would the IVA stay on your credit report longer as it does not finish for 5 yrs and then would you have the six yrs to clear.

Thanks

Steve

Waspeze

There's a good explanation of IVA's on this site if you haven't looked at it already?
http://www.moneysavingexpert.com/loans/pdf-iva-guide.pdf

From what i 've heard though.. IVA's are only really suitable in rare circumstances .. e.g. when you'd lose your job due to BR or have large assets

december

Erm I'm not too familiar with IVA v BR and the consequences however I do know that the IVA stays on your credit file for the 5 years and then takes 6 years to disappear, so your comment would be right.

December

Deep_In_Debt

IVA's are only suitable for a small number or people. If you have assets to protect, such as a house and you can release equity by re-mortgage, then an IVA may be suitable but many IVA's can end in bankruptcy anyway due to changes in circumstances etc. You really need to make sure that you can stick to the rigid budget of a IVA. I didn't go for one in the end as a lot can change in a few months or years. I was going to go for one in Februrary but I'm now facing redundancy so my IVA may have failed already and I doubt I would have paid much to my creditors at this point. You will probably also end up paying your first few months repayments in fees to your IP so little will go to your creditors for a few months.

It will trash your credit file - but do you really want credit again? I know I don't!

stevelinz

Thanks everyone. I do find it amazing that the set up fees are so high and they get all their money but creditors do not.

I think mine may fail as I can only afford 35%

tigerfeet2006

Have you spoken to one of the free debt charities?

stevelinz

yes spoken to CCCS, but things are up in the air at the moment as we are unsure about the equity in the house. It may be £50k or £0 as we have subsidence but I can not afford to do all the work on it. Checking it out with estate agents.

My business went bust and I am struggling to pay my unsecured loans buts I am hoping to start a new job in a month.

The choice is year of paying off my debts or see what the OR does.

tigerfeet2006

Have the CCCS suggested BR? If they have it is a fair bet it is the best way to go.

stevelinz

No, as the debt was not set in stone as companies are falling over themselves at the mo to offer me discounts. Alliance & Leicester took a £5k debts and have offered to reduce it to £2k. others are doing the same.

Mu business was also in the process of being sold and that took care of £40k back rents and tax debts.

Just looking at the current situation and we need to speak to CCCS again

tigerfeet2006

I think that would be a good idea. Let us know what happens.