Hi all my first post on here. Ive sat on the periphery for sometime now, and have been reading the posts both on here and the sister site bankruptcyhelp.org.
Anyway my question is why should you choose an IVA over BR?
Having read both forums, my observations are as follows:
BR:
You pay less DI into an IPA over a shorter period.
Your debts are cleared immediately.
Your allowances are more relaxed in BR than an IVA.
You are discharged after 12 months, assuming no BRU/BRO.
It would therefore seem that if you have no equity in your property, have a car less than 2k and are prepared to except the stigma (which is fading) then BR is the route.
I understand the moral issues in wanting to repay your creditors, and this is why I have not jumped in, but with the hassle from creditors I am currently getting, that morality is very quickly evaporating.
I see comments on the forum that BR as a more detrimental effect on your credit rating - how is that?
Both orders be it an IVA or BR judgement remain on your file for 6 years, and then drop off. My understanding is you cannot get more than £500 credit in either IVA or BR.
And when you speak with a number of IVA companies who also offer a BR facility, it seems obvious they have their own agenda by way of offering an IVA - as this affords a better payback (profit) for them than sending you down the BR route. It seems you get screwed even when your screwed [:)]
This for me justs adds to the confusion. I have taken advice from a number of experts in the IVA and BR fields, and when you get down to the bare bones it would seem BR is the best option in my case.
I would welcome feedback from forum members who have real life experience of either being in an IVA then moving to BR.
Hi and welcome to the Forum.
You are absolutely right in that bankruptcy is a much easier option than an IVA and IP firms should make you aware of this. I see no difference in the damage to your credit file between either option and indeed you may be able to obtain credit within a couple of years of discharge from bankruptcy.
People enter IVAs for a number of reasons and the perceived stygma is one. Also many clients wish to repay what they can at an affordable rate as they believe that they owe the money and are happy to repay at least some of it. Others enter an IVA because they fear bankruptcy would affect their careers or even lead to loss of their job so an IVA suits all round.
Ultimately it is your decision and you seem to have arrived at the bankruptcy option. There is no need to pay a company to do this for you although there are plenty of reputable companies who can help should you require assistance. Hopefully it works out and good luck.
I have been speaking with a company called Reviva, who I understand have a good reputation.
I am still divided has to which route to go down. I have really had my fill with how arrogant and underhanded some of these half witted individuals representing my creditors can be.
I owe them money, and Yes i wish to address this fact, and pay back what I can, but another side of me says stuff them, and go BR.
One too sleep on and think about I guess.
Thanks again for your advice.
Michael Peoples wrote:
Hi and welcome to the Forum.
You are absolutely right in that bankruptcy is a much easier option than an IVA and IP firms should make you aware of this. I see no difference in the damage to your credit file between either option and indeed you may be able to obtain credit within a couple of years of discharge from bankruptcy.
People enter IVAs for a number of reasons and the perceived stygma is one. Also many clients wish to repay what they can at an affordable rate as they believe that they owe the money and are happy to repay at least some of it. Others enter an IVA because they fear bankruptcy would affect their careers or even lead to loss of their job so an IVA suits all round.
Ultimately it is your decision and you seem to have arrived at the bankruptcy option. There is no need to pay a company to do this for you although there are plenty of reputable companies who can help should you require assistance. Hopefully it works out and good luck.
I do believe that the guidelines imposed by creditors and their agents are forcing more and more people down the bankruptcy route. As mentioned on another thread the affordability factor is being ignored in favour of intransigent 'guidelines' that bear no relevance to the real world.
Many people propose an IVA with the intention of going bankrupt if it is rejected. The IPs prepare good viable proposals that the clients can afford and maintain yet still have a quality of life. This is being eroded to the point that clients effectively feel punished by their creditors and ultimately they have to reject the uplifts and petition. At least if this happens they can show the judge and the Official Receiver that they made an attempt to repay but creditors were the ones made the proposal fail.
Unless HMG do something about the "easy" bankruptcy option, and stop penalising people in IVAs by allowing their details to be available on the public register easily on the internet, then I can see a lot more people plumping for bankruptcy.
Notwithstanding this, the majority of people who come to my firm for advice generally do so because they want to pay their debts and not avoid them. As ever, this is a matter of very personal choice - and I would never recommend either to a client, instead preferring to merely explain the options and ensure that clients are aware of all advantages and disadvantages before making a choice.
I remember a post regarding mentioning your BR to your prospective creditors on the BR forum. If I remember rightly, the majority said they have yet to come across this question in an application for credit or have never been asked directly by a creditor.
It does seem your life in an IVA is squeezed, to the point of punishment by your creditors - which as Melanie points out will no doubt drive more people towards petitioning BR.
rayb wrote:
Hi,
One other thing to mention:
With Bankruptcy you will always have to declare it for the rest of your life whereas an IVA you will not
Last edited by Stuck in the Middle on Wed Dec 16, 2009 6:54 pm, edited 1 time in total.
Some people, and I am one of them, have far too much equity in the house and if I went BR I would have lost it.
I also want to pay back as much as I can to my creditors.
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
i recently completed my iva albeit with a final offer in the 4th year ,bankruptcy was a option for me and would have been more viable,but once i realised after seeking help there was a option called a iva that i could propose,that gave me a private solution to clear my debts within a reasonable timescale,without causing hardship i jumped at the chance,i feel very fortunate to have had that option available,and have no regrets,my situation was desperate absolute.and feel so humble this country provides solutions to help people with heavy debt without legal judgements for those who need help who have fell into financial difficulties.
To be honest, in my situation, it would have been easier for me, personally to go BR as 85% of the debt was in my name, I was insolvent, hubby was solvent but together we were insolvent.
I couldn't have sorted out the debt situation without the backing of my hubby as my income alone wouldn't have touched an IVA, without going BR.
I didn't want to go BR because that would, for me, have been total defeat (regardless of equity in the property, my mother would have purchased my beneficial interest). I want to pay back as much as I can.
I agree with Melanie about the Insolvency Register, I viewed myself and hubby on there tonight....where is the Paedophile Register online, they are more risk to society than us in IVA or BR!
We have sacrificed a lot to avoid a BR for myself (I cannot praise enough the professional service of Melanie and Co here who got us to the position we are now) and get on top of our debt, including my husband's credit rating and his now inclusion on the IR. But when we got married we were in it for better or worse and everything we have done, we have done together, incluing getting into debt and now getting out of it.
7 year IVA completed in December 2016 - there is light at the end of that tunnel
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
Whilst I think the register should not be in the public domain, I'm just glad that not many people know about it.
I rarely give it a thought.
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
