www.iva.co.uk

I HAVE 53,000 WORTH OF DEBTS, I HAVE A MORTGAGE OF APPROX 59,000, CAN I GET AN IVA OR SHOULD I JUST APPLY FOR BANKRUPTCY?

Perhaps you could post more details, creditors, ammounts, disposable income after living expenses and utilities but not including payments to creditors.

The big disadvantage of bankruptcy would be that your home would be at risk.

mrs skint

There is a lot to factor in here. Marital status? Kids? Any joint debts?
If all debt in your name then as a guide the minimum you would need for an IVA proposal would be circa £330. bEar in mind though that each case is different and if you can afford more then you will be expected to pay more.

Good luck.

Hi D15,

I agree with Skint and Size 5, we need to get some more information before we could advise correctly.

As you have a mortgage of £59,000 i would suggest that bankruptcy could potentially affect your Home and might risk loosing it.

Also depends on what your approximate disposable income is as to weather an IVA is right for you.

I would suggest that you contact an IP who will be able to discuss your circumstances further and give you the best advice possible.

thanks for your responses, I am single with 2 children, 15 & 1, all debts are in my name, the debt includes approx £25,000 on credit cards and approx £25,000 in personal loans, and an overdraft of £2500. I have nothing secured on my home. Using a budget sheet from national debtline, without paying any debts, I am left with around £330 per month. Up til now I have paid all payments but its been a case of using credit to pay credit, but I will default next months payments as have maxed out most credit. I feel very desperate, I am scared for my children, I do not want them to lose their home

How much is your property worth ?

AROUND 90,000

Okay, there are a number of options.

Bankruptcy i would suggest your property would not be safe as you have significant equity and i likely the official receiver will want the property.

You could look at a DMP but with your level of debt it would probably take you at least 14 years and you have a risk creditors could look to charge a debt against the house.

You could look at releasing some equity but you don’t have enough to pay your debts in full so suggest this would be a bad idea.

Or an IVA, with a disposable income of £330 would be enough to enter into an IVA however you would also be expected to introduce some equity in the final year of the arrangement. However the amount would be based on your personal circumstances and you would not be expected to increase your mortgage payment by more than 50% of your IVA payment (if that makes sense)

I would say the IVA route would protect your home and give you some control, you may to consider discussing this with an IP who can make an accurate assessment of your case.

thanks, I contacted some company off the net last night via'Trapped' website but they were telling me with the level of debt that I have I would be expected to pay £400 a month, I cannot afford this and this is why I was considering looking at bankruptcy, feel this is just to much to deal with

Were you advised of this figure due to your surplus income, did they go through your income and expenditure?

Did the company take you through a full income and expenditure review over the phone ?

Based on £330 alone it give you approximaley a 28p in the £ return (after costs of the IVA) and this does not include any equity you may introduce, which would only increase the dividend.

The majority of creditors will accept 28p in the £ so i do not see this as a problem.

To achieve a minimum dividend of 25 pence in teh pound after costs, given the reduced level of IVA fees these days £330 would be just about manageable, but you have to offer to remortgage up to 85% house value in the last year of the IVA.

How much is the property worth ?

Hello d15 and welcome to this forum. I think you do qualify for an IVA and I suggest you contact a few IVA companies, reviews of which can be found at www.iva.com Good luck [:)]

My house is worth around 90,000.Having to release equity later on would surely increase my mortgage by an incredible amount in the final year, so surely I would be back to facing bankruptcy?

Under the new protocol that is set out the incremental cost of the re-mortgage will not exceed 50% of the monthly contribution.

So if your IVA payment is £330 then your mortage payment will not increase more than £115 assuming it is a protocol IVA.