0800 077 6180
Calls from mobiles may be charged
This is where to post your first questions about any debt problems you have
By cpharo36

Please can I have some advice as I am driving myself mad not knowing what to do for the best. I have an IVA though creditfx which I have been paying £145.00 since October 2018. I have recently moved home and my travel expenses and council tax have increased.

Credit fix held a creditors meeting to ask for my payments to be reduced to £80.00 a month which has been agreed on 19/12/2019. I have found it hard maintaining the IVA and am constantly relying on family to help me when I run out of money. I think credit fix just fiddle with your income and expenditure to make it look like I have more money spare.

I rent my property from a housing association and have no car or assets, so I have started to complete the form online to apply for bankruptcy. I live with my 14 year old daughter. My main concern is that I did go bankrupt 9 years ago and I am worried the official receiver will be harsh with me as this would be my second time. I am worried they will set a high IPA and I will end up having to pay more than I do now, which will put me in an even worse situation.

I am ashamed that I am in this situation again. I did over spend on some occasions. All my debts are form loans, catalogs and credit cards. I basically took out a loan to pay the credit cards and then used the cards again and then got more loans to pay cards again and pay loans off. It all spiraled out of control so quickly. I know the official receiver will ask why I am in this situation- what reason should I give.

I really just don’t want this debt hanging over me anymore and ant a fresh start as it makes me feel anxious. This is the amount I spend each moth is this going to be accepted?

Salary £1695.00
Tax credits £39.60
Child benefit £89.70

Monthly expenditure:
£540.00 Rent
£148.00 council tax
£77.00 gas/electric
£28.00 water
£10.00 vets
£10.40 prescriptions
£12.00 dentists
£5.00 optitions
£360.00 groceries including cat food/cat litter for two cats
£30.00 toiletries
£80.00 school/work meals
£220.00 travel
£50.00 (including school uniform costs)
£36.00 hair dressing (cheapest wet cuts I can find is £15.00 for my daughter and £18.00 for myself)
£35.50 broadband/tv
£60.00 mobile phones for me and my daughter
£20.00 dry cleaning
£40.00 hobbies/leisure
£5.00 school trips
£10.00 pocket money
£20.00 emergencies
£20.00 Xmas/birthdays
Hi cpharo36

Welcome to the forum :)

The first thing I would say is it looks like going bankrupt would be a very sensible option for you. Given you are renting and have no car you have abslutely nothing to lose. The Council will not be told and do not care anyway as long as you maintain your rent.

I understand you have been bankrupt before but please be assured this will have absolutely NO bearing on how you are treated if you do it again. Lets face it 9 years is a long time ago and the situations are unrelated.

The official receiver will not treat you any differently to someone who has not been bankrupt before and this will certainly have no affect on whether they give you an IPA. You just have to be honest with them and explain that your debt is a result of overspending. You are a single Mother and life is difficult on a low income.

Your living expenses budget looks fine to me. Looking at it I would say it would be unlikely they will ask you to make any further payments towards your debts at all and you will be debt free in 12 months. I recommend that you have a look at this article by James Falla which I think you will find really helpful: Stop your IVA and go Bankrupt
Thank you so much for help. I will stop paying my Iva and start paying my bankruptcy fee in instalments it will take me about six months to pay the fee.

So when you apply for bankruptcy do they really allow you money for birthdays and emergencies?
Hi cpharo36

I agree with Geraldine. Bankruptcy certainly looks the right option for you.

The official receiver does allow a budget for "gifts". The £20 amount you have listed should be no problem at all. They don't always allow an amount for emergencies but I would certainly include it as it is only £20 and see what they say.
Thank you my £220 travel expenses is for work and for me and my daughter to travel during the month ie visiting family going out places. I do not drive so rely on public transport - will the official receiver allow this or do they only allow travel expenses to work.

Will I be able to keep my broadband with sky and mobile phone contract?

It says in the bankruptcy form about bonus and over time I probably earned about £300 extra over a year for over time and £200 bonus the bonus structure is not guauretted as it’s only if targets are met so should I leave this section blank.

I have stopped paying my IVA from December 19 - it is going to take me about five months to get the bankruptcy fee together I am going to pay in instalments online.

How long will I have until the creditors come after me and take me to court I am worried bailiffs will turn up at my house,

Would it go to a debt collection agency first or straight to court.

Normally the official receiver will allow for reasonable social travel and family visits so the budget you have allowed should be OK. Lots of people worry about utilities contracts such as Sky and mobile phones. But there is no problem. You can keep all these contracts going as long as the amounts you pay are not excessive.

If you earn a bonus here and there of £200-£300 in my experiance the official receiver is not interested and you can keep the money. They are only interest if these sort of payents start to be come regular (ie every month).

In terms of your creditors I dont think you need to worry. Your IVA company will not inform them that you have stopped your IVA for at least 3 months. After that it will probably take another 3 months for them to start chasing you again so you have plently of time to save for the fee.

Let us know how you are getting on :)
Thank you - this whole process is so scary. My Iva said they would reduce my payments to £80 a month which is still not affordable but this would mean my Iva would not finish until 2026.

I’m just worried that when I apply for bankruptcy the official receiver will cut my living expenses and I will end up having to pay a higher amount For IPA than I was paying for my IVA.

I don’t want to end up paying more as I’m struggling now.

My IVA company said that if I stop my IVA to apply for bankruptcy the living expenses allowed for bankruptcy are less
Hi cpharo36

The advice Geraldine and Hayden have give you is absolutely correct.

I would just add that what your IVA company has told you is totally incorrect. The living expenses allowances allowed in bankruptcy are certainly not less than in an IVA. I think Credit Fix are are simply trying to scare you into sticking with an IVA which is in no way suitable for you.

I have been advising people who have switched from an IVA to bankruptcy for many years and I have never come across a situation where monthly payments increase unless income has also increased. This is not the case in your situation so you have nothing to worry about.
Good news my friend is going to lend me the money so I can submit my bankruptcy application . I have missed one payment of my Iva, shall I just email my Iva company and say I wish to cancel as I am applying for bankruptcy.

I Dont want to wait until I have missed 3 payments of my Iva until I can apply as I would like to get this done as soon as possible