Should we stick it out with our IVA or look at bankruptcy ?

[James.rl]

My wife and I are currently in an iva. Have been since last sept. Our payments increased in April and then increase again in nov 2013 due to end of car finance etc. Before we entered the iva we found out my wife was expecting our second child. At the time we contacted our supervisor to discuss whether we should go ahead as we knew then that with my wides maternity pay and then future increase in Childcare costs that we would never be able to make the increased payments. Once my son was born in April my wife contacted our iva company who have advised us that we must maintain my payments and suspend my wides until the end of maternity leave and then reassess the situation when she returns to work. Any shortfall will then be added to the end. We already know that Childcare costs will be around an extra 300 a month so keeping up payments will be near impossible. It feels like this iva could go on forever. Any advice would be appreciated- should we stick it out or look at bankruptcy. Is there somewhere where you can complain about advice you were given too as o think our iva was set to fail from the beginning.
Thanks

[terry d]

my opinion only,post after post after post on here about people in iva,s and then need for whatever reason to get out of them,i nearly went for an iva myself,but relised that everybodys circumstances do change within the 5 or 6 years of an iva,so i opted for bankruptcy instead,for most people it will be a year then thats it done,you can then rebuild your life again,a year will past quickly,im totally against iva,s for my own reasons,about your complaint you will have to firstly go through the company you are using for your iva,

you have to remember that iva companys are there to help you yes,buy mainly to make a profit and if they can prolong their profit they will thats business in this big bad world or ours

[Ivoryfalcon]

I would arrange to speak with your IP in person and go through everything with them. It may well be better for you to choose bankruptcy but the only ones qualified to give you that advice is a professional.

Bankruptcy is a whole lot harder now than it used to be and you really do need some professional advice before you jump!!

Hope you get this sorted, I do know how you feel and went through all this during my IVA.

Best wishes

[Foggy]

Hi there.

I would suggest you discuss the possibilities with your IP first, then weight up IVA vs BR.

On the face of it, you might be slightly better off in BR. You will be discharged after a year, but will be required to make payments, broadly similar to your IVA payments ( but based upon your new circumstances) for up to three years.

Do you have a property or other assets to protect ? Does your job allow you to go BR and stay employed ?

BR will cost you £700 per person ( which can be saved towards by allowing your IVA to fail by missing three payments which you save towards BR.

CCCS have a free BR advisory department, I am told.

[Michael Peoples]

I think you should get an immediate payment break while you assess your options and take some advice from your IP. At least if bankruptcy is the best option the IVAs can be failed and hopefully you will have collected the fees.

[terry d]

you will only be required to make payments into the BR for 3 years if after all your allowances you have £20 over at the end of the month see below
Your trustee may apply to court for an income payments order (IPO), which requires you to make contributions towards the bankruptcy debts from your income. The court will not make an IPO if it would leave you without enough income to meet the reasonable domestic needs of you and your family. If you have an increase or decrease in income, the IPO can be changed.

[James.rl]

Thanks for the advice. Yes we do have a property which would be my only concern with br. Not really sure how it works with br and if we would lose it. No equity in it at the moment whether or not that matters. Car on finance. Nothing else of any value. I think I do need to speak to someone- I just get passed to different people who deal with our iva but no one will give advice. They have only advices speaking to citizens advice which we did but still didn't feel we got the answers we needed. Br would not effect my job but unsure about my wife's, she's a teacher. She'd have to check. It just feels like there is no end in sight, with 2 young children and a house too small. IRS getting quite depressing! They want us to keep going and reassess in feb but I don't see point in continuing then later finding out we will need to go bankrupt.
Thanks again.

[Foggy]

With regard to the house, the Official Reciever will keep the interest in the house for just over 2 years, and will then decide whether it needs to be included in the BR, so no quick answer there, really. If there is little or no equity in the 2 years then he will have no interest in it. Bit of a gamble, but talk this over with someone like CCCS (don't, please, go to a BR assist firm who will charge a small fortune just for filling out the forms!).

[MelanieGiles]

What a shame that these matters were not taken into account when your IVA proposals were being prepared. The addition to the family should bave been catered for at this time, and you would have been able to make a realistic stab at the additional costs involved and the effect on your incomes, and the payments could have been staggered accordingly. Why was this not done as a matter of interest.

At the end of the day the Supervisor of your IVA is an insolvency practitoner, and is therefore very able to give advice about bankruptcy if this is your preferred route. You should not need to be shunted to the CAB, when you have a very able and professionally qualified person already acting for you.

And just to pick up on Terry's point - the vast majority of IVAs successfully run their course these days, and it is perhaps just a little unfortunate that people post bad stuff on the forum when looking for help and support and this may give an unbalanced view of the process. I appreciate that you have had a bad experience with your choice of solution, but we should not let that taint others views of a very worthwhile process.

[Broke of London]

Hi James!

Congratulations on your wife's pregnancy! It definitely sounds like you need to re-evaluate whether ivas will suit your new family. It may also be worth considering whether different debt solutions would suit you e.g. you maintain your iva while your wife goes BR. Your IP will be able to advise better.

x

[Skippy]

I agree with Melanie, we often hear about IVAs failing but that is the nature of the forum - people come here looking for advice.

Although my IVA failed it would be very short sighted to think that just because it wasn't the right solution for me it won't work for someone else.

I also want to point out that BR isn't over in a year for many people - while you may be discharged you will have an Income Payment Agreement (the OR will only aply to the court for an IPO if an IPA can't be agreed) for 36 months if you have more than £20 per month disposable income.

IVA and BR are both excellent debt solutions but we have to remember different solutions suit different people.

James.rl, good luck with getting your IVAs sorted out.

[KM1512]

Sorry to hear about your situation James at this time when things are stressful enough with a new baby. Maybe it would be an idea to ask for a payment break and use this time to sort out your options and get advice good luck James and I hope things get sorted for you

[terry d]

i still stand by my advice to james.rl when i started to relise i was in deep debt trouble,i rang around a few companys gave them all my incomings and outgoings,and they all came up with a differnt sum i would be paying into an iva,1 company even said i should go with a DMP ? what with £38,500 of debt,i wont name that company but please im not a fool,what i did in the end was went to my own accountant and they said that bankruptcy was my only way out,i do believe iva,s work in the main for most people but if i had a pound for every post on this forum where an iva did not work id have a tidy sum by now,i wish that all iva companys would advice on bankruptcy when recieving that first call from someone in debt,but it seems to me they done,as ive said before iva companys are there to make money and help people,but given my own experience of some iva companies out there,they will try to minipulate the figures to suit the company not the debter,where the debter would be much better off just going bankrupt,this is my opinion only and im quite entitled to that

[Foggy]

Hi Terry . Maybe you were unlucky. My company gave me the full sp on dmp (which I instantly discounted), br ( again, pretty quickly discounted by me) and IVA. They followed this up with an information pack, again detailing the options.

At the end of the day, all of these companies are commercial concerns and need to be paid for ( even the NHS gets our money through taxes and NI .... nothing is free). Yes, as with all industries, there are some bad apples and some are also more, shall we say, "focused" on the creditor than others ..... this is where research pays off

As oft advised on here, if considering a debt solution, speak to several companies ( as many as it takes to make you feel confident in your choice) and explore all options, ask questions and don't be bullied into anything unrealistic --- in fact don't be bullied, full stop!

[Niobe]

I agree with Foggy.

We had been told by another company that BR was our only way out as we had (according to them) too much disposable income. We ended up doing a DMP for 18 months before being accepted on an IVA with less payments on the DMP!!

Payplan went through everything with us so we knew what was what.

A reputable company will always advise on all three options and go through everything with you. They will not manipulate any figures at all.