IVA vs Bankruptcy

[ben102]

Hi,

I am in the process of doing my IVA through Melanie, I have got all my figures back and I am on the verge of deciding
which way to go. I have spoken to a view people and I get asked the same question as to why I don't go into bankruptcy as I do not have any assets.
I am £38000 in debt and I am stuck at which way to go. Would it make better sense to enter bankruptcy as I don't have any assets or go the IVA route?
I am only concerned with the budget set out according to the guidelines as every day costs are rising and I would find it difficult covering day to day living with the budget.
I suppose the biggest thing about the bankruptcy is the stigma associated with it. But at the end of the day I have to decide soon as the stress is eating me alive.
Any input would be appreciated.


Many thanks,

[Anna Karenina]

Hi Ben

Talk about caught between the devil and the deep blue see. Ultimately, you have to go with the decision that feels right for you. But from my own experience (two members of my family have gone down the BR route), bankruptcy is not as awful as you would think - I'm not saying it's easy but you only have to read the posts on this site to realise that neither is an IVA. One of the big questions is whether BR would have a detrimental effect on your job i.e do you work in financial services, etc.

Good luck making your decision and have faith in yourself

Anna

[ben102]

Thanks Anna.
Yes that is one of the biggest questions for me. I don't work in financial services. I work in IT and I work with data so
I could be employed by a finance house in the future which might frown upon a BR as I might have to deal with trading data etc., but then again I might decide to avoid working for them it just means my opportunities would be a bit more restricted.

[Anna Karenina]

I'm certainly no expert and all I can advise is talking to Melanie - she really will give you the best advice and then make the decision that you are comfortable with.

Good luck!

[plasticdaft]

Another way to look at it is how responsible you feel for paying back as much of your debt as possible. Some people want to make the effort so go for an IVA,some just want rid of the debt asap and so go for BR. Its all about individual choices. Life under an IVA isnt all roses,but it isnt meant to be. BR may be a quicker option but will it teach you the error of your ways and will you learn how to manage your finances,coz theres nothing like an IVA to teach you how to budget and cut costs!!!

Good luck in whatever you decide,and with Mel and her team at the helm you wont go far wrong.

[ben102]

Thanks plasticdaft,

I do feel responsible for paying back my debt. I am only in this situation
as I am currently going through a divorce so I have to manage with one salary instead of two. The way I understand it after reading various forums is that an IVA and a bankruptcy affects your credit rating equally bad?
It's a question of being stressed out for five years or one.

Regards,

[MelanieGiles]

Clearly I do not recognise you as a client from your forum name! So you might want to call me on Monday to discuss this specifically.

If you are having doubts about whether an IVA is the right way forward, you must really have a good think forward, and have a chat with us, before proceeding. In my experience, if you are doubtful at the outset, your IVA has more chance of failing in the long run.

Remember the IVA is all about what you want to do - and it may be that having giving everything a lot more thought and seeing things in black and white will make you decide one way or the other. We want to help you make the right decision for your future.

[worryhead]

Hi, your credit will be the same either route you take really, also it depends on your surplus income on if you have more then £100 you will have to pay into your bankrupty for 3 years sometimes, but again i am no expert but that is what i was told, yes its less a month to pay then an IVA but its still there to pay. again it depends on personal circumstances.

[freelili]

Hi

I think its anything over a surplus of 100 pounds per month will go towards an IPA in BR, then its done on a percentage, so the more you have after the 100 the more you will pay. I personally, (my opinion only). Dont think its a matter of wanting or not to return as much as possible to creditors as your own personal circumstances. Some will have more on the plate (other than the debts) than others. We all know what a stressful time it is and to feel that one person is better for chosing IVA over BR or vice versa is wrong. I think both have pro's and con's in different areas. The most important for you is what you feel more appropriate, given that you have more than one thing on your plate right now. Life changes can mean uncertainty in many areas, if the financial waters havent been tested. Going through a divorce is really hard, its also really hard to be living alone when you havent for a long time and servicing maintence cost of seperated children, We all know how hard it is on the sanity when faced with debts.

I wish you the best of luck in whatever you decide to do.

[ben102]

Thanks Melanie,
I will call on Monday.

[ben102]

Thanks Freelili,

That is pretty much why I am contemplating the BR. I would like to pay my debt back but having more than one thing on my plate at the moment is proofing a bit stressful and at the end of the day I would have to do what's best for me in my situation.
I suppose I am still struggling with the whole stigma associated with BR.

[freelili]

Youre very welcome.

If only all things were so black and white, eh?

I know this is a stressful time for you, I hope it all works out. I would read a couple of the blogs here, Skippys is a good one to start with. You have one of the best IP's if you plan to go for an IVA. It is your life and your choice.

Good luck with whatever you decide to do.

[BlueShoes]

Hi Ben and welcome.

We have just completed our first year of an IVA (also with Melanie)and I can appreciate where you are coming from on this.
We owed nearly £100,000 to 6 creditors, so the decision was touch and go (one creditor held the casting vote) so we had prepared ourselves for bankruptcy.
As it turns out, the IVA was agreed, and we are paying back a substantial chunk of the debt we accumulated over 10 years or so.
It feels good to know we are paying back some of the money, although we have to pay for a sixth year if we are unable to raise sufficient equity in our house (unlikely)so in some ways it seems like a long haul.
We are lucky that we are in well paid jobs, and are likely to receive pay rises regularly, so may eventually be able to pay back the monies we owe sooner.
As other posters have said, only you can decide. Five years is a long time to have to watch every penny, but we have actually enjoyed the challenge so far, and have totally altered how we view money.
Melanie and her team are very supportive, so if you do decide to proceed with the IVA, I would highly recommend them to you.
Best of luck, whatever you decide.
Blue

[Viki.W]

Good luck Ben and welcome to the forum from me too.[:)] X

[ben102]

Thanks for all the support. I feel better knowing I am not alone in this.