Please help - IVA or BR?

[skintali]

Please help me, I have spent today in tears trying to make sense of what we should do. Basic scenario, live with partner, in rented accom, having sold house a couple of years ago cos couldn't afford the mortgage any more (having remortgaged to try to pay debts etc, you get the picture). Minimal equity which was soon swallowed up on credit cards etc. I have debts of £54k, partner £15k. Both work full time and have good professional jobs (which makes me feel such a failure that I am in this situation at all). We are with CCCS, seems to have been going on for months. Now proposing an IVA for me, and DMP for partner. But the amount they want just keeps going up and up. They actually recommended BR in the first place for me, but I did feel that (a) I wanted to avoid the stigma (is there still stigma to BR?) and (b) I did feel that I wanted to repay some of the debts. However I now feel I am being pushed into a corner. They want £482 for SIX years on the IVA, plus about £120 for partner on DMP, so total of about £600 a month, and I really don't feel we can do that for the next 6 years.

Finally received proposal from CCCS yesterday with these figures. It does say on there that if I went BR then the amount I would have to pay for 3 years would only be about £300 a month. is this right and why is the amount of an income attachment thing in BR less than the amount I have to pay in an IVA? How is it calculated differently?

I just feel now that BR would be the better option. Seeing the figures in black and white it seems why should I pay £482 for six years when I could pay £300 for 3 years. Why do the IVAs want to squeeze every last penny, when the creditors get virtually nothing on a BR? Five years seemed achievable, but because they say some of our outgoings (mostly life insurance and pensions , which are through work and I can't alter it) are more than should be allowed, we would need to pay an extra year. It's just too much.

Can anyone tell me, is it that bad going BR? Is it right that the income payment would be so much lower? I really need help, it's taken so long to get this far, my creditors are getting stroppy, and I just want it all sorted.

sorry to go on and on, but other questions that I would so appreciate answers to are re bank account. We already have a basic account with Nationwide, in joint names, just basic cash card account. What would happen if I go BR? Would they freeze it or anything? How long for? Is it better to tell them before hand? I can't risk utilities, and particularly our rent, not being paid etc, more problems with money would push me over the edge.
Also, would my employer need to know? I don't think it would worry them but I don't want my colleagues all to know if poss. Somewhere I read something about your tax code changes in BR.

Please can someone help me with all this.

thank you

ALI

[MelanieGiles]

I have some difficulty in you saying that the figures are "what CCCS want" rather than what you can afford to pay. If an IVA is right for you, then it should be based upon your own specific expenditure and not benchmarked allowances. If you feel that you cannot afford the payments, do get another opinion from another insolvency firm. Whilst expenditure has to be acceptable in the eyes of your creditors, it is not really up to your IP what you can and cannot spend, and if the payments are set too high the IVA will fail in any case.

IVAs exist for people who have a burning desire to repay their debts to the best of their ability. If you feel that bankruptcy, with its lower payments and reduced timescale, is a better option, then the reality is is probably will be. Although it is publicly advertised, and your employer or work colleagues may find out about it.

Why are CCCS suggesting a 6 year arrangement? How much do you owe, and how much do you feel you could afford to pay on a monthly basis?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi and welcome
It is true that you will pay less in bankruptcy,over a three year period.The downside is that your name and address will be in the local paper and you will be put on a zero tax code,for a year.Plus in bankruptcy you will return less to your creditors than in a successful IVA.
Your bank account should be fine but it will be upto the actual bank so have a word with them.
If you feel that the amount for an IVA will be too much then you must speak with the CCCS,there is no point in proposing an unrealistic IVA.
Have a look at a couple of blogs from forum members that have gone through bankruptcy[skippy,scaredkez and coco etc]
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[skintali]

Thank you for your prompt answers.

I didn't want to criticize CCCS as they seem to be highly reommended, including by the creditors, but over the past couple of weeks as we have tried to get the proposal finally put together (after about 3 months) I have lost confidence in them. To be fair to them their original recommendation for me was BR but deep down I would actually prefer to repay some of the debt. However it's now getting to the stage where I am so scared of failing in the IVA and then having to go BR further down the line, that maybe it's better to do it now!

Melanie, if I get a second opinion now, will this take weeks again to get together.? I really need to get to an end point now.

I owe about £54k myself and partner about £15k, so he is going for a DMP and we were hoping that we could keep those payments low whilst I am in the IVA and then after 5 years, once the IVA had finished, we could put the extra into his DMP to finish that off quickly.

We have now got to a figure of £482 for me on the IVA, which is about 55p in the £ to creditors.

However that's over 6 yrs now, as they say that my outgoings for pension and private health insurance are too high. However they are contractual, and I only pay £100 a month for the pension, which doesn't seem much to me, and £21 for the insurance. I can't opt out of either. We also have life insurance of about £70 month between us, but there are personal reasons why I want to be fully covered, which I have told CCCS, but don't want to go into on the forum.

I don't know what the dividend to creditors would work out at if it was over 5 years, maybe somewhere in the high 40s in the £? Creditors include Northern Rock (£10k) and HSBC (£5k), and I know they seem to be looking for more than the bare minimum.

It is really the 6 year thing that has got to me. Is this normal, and if I say to CCCS that I don't want to put that forward, I get the impression that they will refuse to put the IVA to the creditors as they think it would be rejected.

Do you think that a 2nd opinion is worthwhile?

[Adam Davies]

Hi
I would await Melanie,s reply but I would get a second opinion.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[lily]

Hi Skintali

I remember being in tears myself when I first realised the debt I was in (well still am). There will be a way forward for you. You are amongst people here who really can understand what youre going through. I would say its always worth getting a second and third opinion, I found CCCS very good when I spoke to them but they take so many calls and deal with so many people.

There is really no point in them giving you the figures, and you trying to go ahead out of sheer desperation of your plight and sense of duty to repay as much as you can. You should be the one giving the figures, its your life and budget for the next Six years.

You have to make a choice and its going to be a huge step, try to take the time to make it the right one, please dont worry or rush ahead, most of us here have been where you are. Make sure you draw as much knowledge of your options as is possible. You do have time, (I know it doesnt feel like it right now).

Make sure you agree and understand everything before you commit to anything.

Good luck, I know this is a difficult time for you.

lily

[MelanieGiles]

Hi there Ali

I don't really understand why it has been suggested that you do an IVA and your partner a DMP. And you should not be required to cancel important pension provisions and healthcare if they are contractual.

Without looking at your financial position in great detail, it is difficult for me to advise on the forum, and whilst a second opinion might slow things down a little, surely that is better than a miserable repayment plan for six years which you can barely afford.

If you have all of your paperwork readily available, a good insolvency practitioner ought to be able to process your case over a couple of weeks, but it will be vitally important that you provide them with most recent creditor balances, supported by statements of account.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[emma_t]

Hi Skintali and welcome

I am in the early stages of proposing an iva myself anf I also started off speaking to CCCS
At the beginning I found them very helpful and polite and was happy.
Then I kept being passed on to all different 'advisors' and they would alter the figures all the time to what they thought would be acceptable to creditors. I kept saying that is what I spend and thats that, but then they would say that figure is to high lets put this figure up and add this in and it was so confusing.
I think they have only been doing iva's since April so maybe thats the reason, but after reading posts on this forum where people signed up to an unrealistic iva from the get go and it failed leaving them facing bankruptcy which must have been devastating. I realised how important it is to get this right, not just get it accepted, after all it is something you have to live with for 5 years and it has to be absolutely right.
Please please make sure you think about everything in the cold light of day, hard I know when creditors are hasseling and its all you can think of 24/7. I have got in touch with Melanie Giles, who replied to your posts earlier, as people on this forum have spoken so highly of her and the feedback on her handling of cases was second to none.
Its well worth having a chat with someone else about your situation and getting another opinion.
The forum also helps as it offers support and answers to questions you may have along the way.
Good Luck

[OPTIMIST12]

I used to think that Bankruptcy meant "the end of life as we know it". This forum has been an absolute eye-opener for me as to what BR actually entails. Whilst I hope it is something I will never have to consider I now realise from the excellent posts of several forum members that it is NOT the end of the world.

I recall reading in the newspapers a few instances over the past years where debt has driven people to take their own life because they felt there was no way out. If only they had known that bankruptcy was there as a realistic option maybe they would not have felt compelled to take such a drastic way out. I am sure that many people do not appreciate that bankruptcy offers people the chance that it actually does.

Having said that I am 100% DETERMINED that - come what may - I will see my IVA through!!! If I fail it will not be for want of trying.

[andymac]

Hi Skintali,

Welcome. When i first discovered that one of my options to sort out my huge debt problem was BR, my heart stopped beating for about 24 hours, I too knew very little about it, and what it meant.

Use this site, post any questions you may have, and above all, speak to at least 1 or 2 other IP's about your situation, there are some very goods ones on this site.

I eventually filed for BR last week, in a similar situation to you, sold house a year ago, live in rented acc, no assets etc etc.

Believe one thing, once you make the decision, whichever one it is, you have started the road to getting your life and finances back on track. I feel so much better now than I did a few weeks ago.

Good luck !

[mish1953]

Hi SkintAli,
I am BR and have been since July, my circumstances dictated that I couldn't do an IVA .
On the surface it may appear that BR is 'easier' than IVA .. but thats only on the surface, for example do you own a car ? there's a very good chance that you could lose it unless you have a cast iron case for keeping it. You have a pension scheme .. is it exempt from BR .. not all are and the OR can cancel the pension and use the funds towards you creditors, you may have to cacel your insurance, mobile phone contract ? Lose that too. Own any assets ? not any more , caravan , good cd collection .
If the OR thinks that you have broken any of the rules you can have restrrictions imposed on you for years.
Some of your relatives / friends might give you grief, banks really dont like you at all .. very very few will give an undischarged bankrupt an account.
Credit -- you must be joking !
The bottom line is thta bankruptcy is hard, its a new start but financial companies dont trust you and its on record for 6 years . If you need a new washing machine .. how are you going to afford it without credit .

Think hard before you go down this route.

Good Luck
Mish

[pippa]

Hi Skintali

I just wanted to wish you well in which ever path you take. Please be sure that your I&E is realistic.
I am BR as a result of a rejected proposal, I still maintain that I would have prefered to do an IVA, but that is my story everyone elses circumstances were different.

Mish how are you and your daughter, havent seen you posting for a while

Pippa

[iva.com]

Hi Ali,

If you are going to seek second and possibly third opinions you might find www.IVA.com useful. We maintain a list of IVA firms and IPs and publish client reviews of their services.

We recommend speaking to several firms before making a decision on how to proceed.

Good luck with finding the right solution for you and please let us know what you decide upon.

Kind regards,
Terry Balfour
IVA.com

IVA.com - The IVA Comparison Site
100s of reviews, All IPs and IVA firms rated.

Use our IVA firm comparison tool to find best IVA firm for you:
http://www.iva.com/iva_comparison_1.asp