Good morning all, any advice would be much appreciated.
My Wife & i are currently 14 months into our IVA & things had been going fairly smoothly but i've just been informed that my employers are hoping to bring in 20% salary cuts & this would obvously mean that we could no longer afford our monthly IVA payments or even pay a reduced amount.
I just wanted to ask about bankruptcy....
We currently have debts of 29k & anything we would still owe Debt Free Direct, we have a mortgage of 137k & our house is currently only worth between 135k & 140k, with the lack of equity would we still lose our home if we declared ourselves bankrupt ?
I've tried looking for a part time job that would help supplement my main salary but as you know, there isn't much out there at the moment.
As far as bankruptcy goes then my biggest concern is obviously losing our home as we have 3 children, moving into private renting wouldn't be much cheaper (if at all) than paying our mortgage & with the credit checks they make then we'd probably struggle to even obtain a private rental.
Any help on bankruptcy & our home would be much appreciated.
Thanks.
Hi bluemoon - sorry to hear about your paycut and the IVA possibly failing. It seems to be a common scenario at the moment. Firstly, you may have the option of taking payment breaks. Talk to your IP, some IVA's have been put on hold for 6 months to give an opportunity to find more work and keep the IVA going eventually.
If thats not for you and you decide on BR, you don't have to lose your home. Will it be just you or both of you going BR?
As there doesn't seem to be any equity in your home ( another common state), a 3rd party maybe able to buy the beneficial interest from the Official Receiver (OR). This will cost approx £211.
This is the route I am hoping to take, as hubby is BR but I am not.No equity and I don't want to lose my home.Hubby has his telephone interview with OR on Monday where he'll be getting the answers and timescales to this.
Hope this has eased your mind a bit - any other queries or niggles please ask.
Thanks for your reply, the IVA is in both our names & obviously that would mean both of us going for bankruptcy.
I've looked at private renting & we'd be lucky to save £50 a month compared to our mortgage payment.
We've handled being in an IVA fairly well & i thought that at long last we could relax a little but the pay cut will just destroy us tbh.
My employer hasn't announced a time frame as to when this pay cut will end but has rather gone down the route of saying " it'll end when/if things pick up", this obviously causes us problems as to giving timescales for lower payments etc into our IVA.
To be honest, I wish we had gone BR last year when the IVA first became an uphill struggle. I can see where you're coming from and its soul destroying when you've done your best isn't it?
Is there a clause in your chairmans report that states your IP has to hold funds for BR or will you bhave to fund it yourself? Its £495 per person unless you're on benefits [:(!]
Okay, so the both of you go BR, is there anyone else who could buy the interest in the property off the OR? If not, the OR keeps the interest and can re- evaluate the situation within the 3yrs.
I don't think there's any interest in forcing you to sell. The OR is only interested in releasing assets, as there's no money to be freed up in the property I'm pretty certain you'll be safe. I'll update the forum on our situation and hopefully that will help you.
Also try to read some of the blogs, skippy and wen have been BR and discharged so great advice in there. Mine as I say is in the early stages but hopefully it will help you too.
Sometimes if there is negative equity, the OR will take the house out of the equation totally.
If you have a car worth more than about £2500 then you might be asked to sell it and get a cheaper one.
Otherwise, BR can be a pretty painless way of dealing with your debts if you can no longer cope.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Thanks for all the advice, obviously our main concern is losing our home, would we know beforehand if our home would be safe in bankruptcy or would it all depend on the day in court ?
To lose our home for the sake of saving £50 a month ( difference between our mortgage payment & probable rental costs) would be too much to handle.
Getting the money together for the bankruptcy costs would be impossible at the moment too.......my head is spinning [:(]
I'd get your house valued as well, you may be surprised as to how much it has gone down in value.
As regards the fee, before you could declare BR, you would have to let your IVA fail, which usually means missing 3 payments. That would allow you to use that money towards fees.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
