|
|
 |
 |
FORUM |
|
> Browse and post on our forum |
|
|
|
 |
|
 |
| Author |
 Topic  |
|
|
confuzzled
Starting Member
4 Posts |
 Posted - 04 March 2010 : 22:24:38
|
So confused right now, and don't really know where to go from here.
I was planning on going the IVA route - creditor's meeting was this week but they're quibbling my expenses (mainly petrol - it appears excessive because I live some distance from my place of work) that I have no control over. My I&E is accurate as far as I am concerned (apart from being able to make a cut in mobile phone costs of approx £20/month, which I plan to do asap as I'm on the verge of being out of my contract.) I feel, though, that the creditors are trying to get blood out of a stone and I simply can't meet their requests (it would mean monthly payments increasing from approx £200 to £300 - a hike of a third!!!)
Having previously been committed to entering into an IVA I'm now getting seriously cold feet (and, to some extent, fast-developing a "stuff 'em" attitude towards the creditors!) and am thinking bankruptcy might be the better option. I wanted to pay back what I could to my creditors, but they're being totally unreasonable.
I've read up a bit more on bankruptcy tonight and it doesn't seem quite so daunting as I first imagined. I just don't know at all what to do for the best. I feel bad for the company who've put forward by IVA proposal, though, if I opt for bankruptcy instead. They've worked hard on my behalf but the last thing I want to do is enter into an IVA with payments that I cannot sustain. |
|
|
debtinfo
forum expert
2826 Posts |
Posted - 04 March 2010 : 23:19:11
|
| ahh.. but did they properly explain all your options including bankruptcy to you in the first place. I would ring national debtline who should give you free indepentant advice. Is their anything in particular that would stop you going for bankruptcy such as lots of equity in a property or a job that would be adversely affectedby a bankruptcy |
 |
|
|
confuzzled
Starting Member
4 Posts |
Posted - 05 March 2010 : 00:35:40
|
In fairness, yes this was explained to me as an option in reasonable detail. I think, though, I was so focussed on doing the IVA (which with the I&E I submitted seemed perfectly feasible) that I largely disregarded bankruptcy as an option, feeling there was still quite a stigma attached to it that I wanted to avoid. (I now realise that aspect isn't as bad as I'd first thought.) The 'moral' part of me felt guilty about the financial muddle I'd got myself in and I was committed to paying back what I could.
No, I've no assets to speak of. I live alone in a rented house and have an old car that's only worth about £500 (I need it to get to work as I live out in the sticks!).
The fact that bankruptcy is over so much quicker than an IVA is certainly appealing as I feel it'd allow me to move on so much quicker. (I realise though, that my credit file would still be shot to pieces for 5-6 years). One thing that does concern me is that my Student Loans wouldn't be wiped out by bankruptcy whereas they would be included in an IVA. They total approx £180/month and with a disposable income of about £210/month this wouldn't leave much to pay into the bankruptcy. I'm not sure if this would be a problem or not?
Sorry, I've got so many questions at the moment - just want to get things sorted so I can start to move on rather than being in limbo and waiting for debt-collectors to come knocking on my door (Mercers have already written saying they'll be paying me a visit on Monday - can't say I'm looking forward to that much!) |
|
|
|
gettingoutofdebt
forum expert
2418 Posts |
Posted - 05 March 2010 : 06:55:02
|
BR is definitely the quicker option but when in an IVA your credit file will also be shot for the 5 years you are paying into an IVA.
Previously creditors always used to ask whether you have ever been BR so if you completed the IVA you could say 'no' to this and not be penalised with higher interest rates. Nowadays more and more creditors are asking whether you have been in a debt management plan or something similar so even if you have completed the IVA you could still find yourself being turned down for credit or having to pay higher interest rates.
I am not 100% sure of this but if the Student Loan is taken out of your pay at source (i.e. by your work) then this amount would need to be included by the OR as an allowable allowance.
The choice of an IVA or BR is yours but you will need to be 100% committed to an IVA if it is going to work. In my case I was in a similar position to you in that I was thinking about an IVA but when I found out the details about BR I decided to declare BR. I was in rented accommodation and my only asset was a £1k car so, to me, it made sense to choose BR over an IVA. |
|
|
|
Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 05 March 2010 : 12:34:25
|
Hi Confused
can definatly share your thoughts and feelings i also tried a DMP so was even more confused
the fear of BR and actually making the decision was the hardest bit for me but once i had the options thoroughly explained Br was the only choice for me.
alas with going BR (outside of this forum) you hear so many stories that have no resemblence to what actually happens.
I am still waiting for my third head to grow and all of my friends to publicly shun me as an outcast unclean unworthy person, some months since BR and nothing yet.
I found the services of Paul and his team at Reviva ab fab, it was not just the form filling , going to court, speaking to the OR, keeping creditors at bay it was a human being at the end of the phone that could help me through the whole process and listen / talk as the need arouse sometimes at silly o clock.
Confused, if i could offer any suggestion it would be to contact one of the experts to the left, take advantage of the free phone call then decide if they will be able to help you
good luck regadrs Richard |
|
|
|
confuzzled
Starting Member
4 Posts |
Posted - 06 March 2010 : 12:18:22
|
Thanks so much for your replies. The IVA proposal seems to have ground to a halt. Although the team representing me are still working hard on getting the creditors to be more realistic with what they're asking, bankruptcy - and the fact that it is for such a shorter period than an IVA - is looking more and more attractive.
Sorry for asking so many questions, but I have a few more...
I teach, so getting time off work to go to court, have interviews/telephone conversations with the OR, etc, throughout the working day is incredibly awkward. I realise I'll somehow have to get the time off to attend court, but is it possible to have any say over the timing/s of the follow-up conversations?
I'm also worried about what happens with bank accounts. I opened a Lloyds Classic Current Account (with cheque book, debit card but no overdraft facility) a few months ago before going down the IVA route. I also have a Savings Account which, over the past few months, I've managed to save up and put in approx £1000 (although the bankruptcy cost £510(?) would come out of this.) Lloyds are not one of my creditors and I have my wages paid into the account monthly. Other than that it's used for DDs, rent SO, cash withdrawls, etc. Am I right in thinking the bank will automatically freeze my accounts and does this happen on the day I'd go to court to petition for bankruptcy? What then? Can I request that they unfreeze it and is that likely to be granted? I can't afford to be in a situation where my pay's gone in but I then can't access it - I need to live in the meantime! Are they also likely to take what's in my savings account? Would I be best to clear both accounts out and hang on to the cash - but wouldn't this look odd to Lloyds?
Still a little confused about Student Loans. I have 2: one is taken out of my pay at source but the other is a monthly DD payment. Would this be considered as an allowable 'expense' by the OR - obviously it's something I have to pay so presumably it must be?
My disposable income it likely to be less than £100/month. Would I still have to pay a certain amount across each month, and would this be for 3 years?
Any info would be very much appreciated. :-) |
Edited by - confuzzled on 06 March 2010 12:18:57 |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 06 March 2010 : 12:30:55
|
Interviews, the OR will usually be flexible to a certain extent, it depends on house busy they are, it is going to be 9-5 mon-fri though. Once they have set a date it is a requirement that you attend though, even if that means taking leave from work.
If an account is in credit then the OR will usually write to the bank stating that they have no objectio to you using it, I know from experience though that lloyds are not likely to let you keep the account open. As for savings, any that yu have left will be taken by the OR. Co-Op and barclays basic account are often recomended and they both come with a visa card and SO's DD's etc. coop has online banking and can be paid in at the post office so not necessary to be near a branch once set up.
student loans
yes it would be considered a reasonable expense as long as you are paying the minimum (ie you couldnt increase your payments to avoid an IPA)
DI
If your DI is less than £100pm you will not pay an IPA. remember though that the OR may have a different opinion on your expenses than you do
|
Edited by - debtinfo on 06 March 2010 12:31:23 |
|
|
|
confuzzled
Starting Member
4 Posts |
Posted - 06 March 2010 : 13:11:12
|
thanks for the info debtinfo.
Ah, ok. Looks like I'm gonna be having lots of fictitious 'medical/dental' appointments, then. Is there a 'typical timeframe' for when telephone interviews, etc are made, eg, days after going to court... a week... a month? If I'm clever I might be able to time the whole thing around the Easter hols!
Barclays are one of my creditors so that's not an option but I've heard good things about Co-op. I assume you're talking about their Cashminder Account? Am I right in thinking you get a debit card still, but not a don't get a cheque book - not that that's such a big deal - having a debit card would be lovely tho? I guess I can't open this until I've been to court though as, presumably, if done beforehand this would be frozen too? Just worried about where to get my pay paid into so I can still access it.
The Student Loan Co would have been a creditor in my IVA (they always vote 'no', it seems, but can be 'forced' to comply if other credits agree to the IVA and the SLC debt is less than 25%). However, as the SLC debts aren't erased by bankruptcy I'd still have to pay them. My disposable income for an IVA was calculated as £210 but from that I'd now have to pay £170 a month to the SLC. Based on this I'd only be left with a DI of £40. If I'm right in thinking that bankruptcy allowances are usually more generous than those in an IVA I think I should be well below £100pm.
One more thing... (sorry, I'll soon be done, I think!) IF I was to change my car (mine's old and on it's very last wheels!) during the bankruptcy period (is this only a year?) for one that's worth more than £2500 (with a family member's help!) would that be ok, or could the OR still take it? Would I even have to declare it? Or would I be best to wait until after 12 months?
|
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 06 March 2010 : 13:26:31
|
you can open the co-op cashminder account before the bankruptcy, the OR is normally in touch with you within a day or to and one of the first questions they ask is if you want to keep a bankr account and they then write to them straight away saying that it is ok to eep the account.
If you were to be given an expensive car during the bankruptcy the BR could take it as an after aquired asset subject to the usual rules about letting you have up to £2K to get a replacement. Of course a family member could buy the car themselves and just let you have use of it. They would need to be clear that this is what thaey are doing |
|
|
| |
Topic |
|
|
|
| bankruptcyhelp.org.uk Forum |
© bankruptcyhelp |
|
|
|
|
|
 |
|
|
|
|
|
Don't know where to go from here...
