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[patchsteven]

hi does anyone know if the living expenses allowed in bankrupcy are more generous than in an iva and secondly although in my expenses ive allowed for child maintenance payments to my ex but sometimes the children stay at my house ( 52 nights a year) so will the OR in bankrupcy increase my food expenses above what i would normally get for those that live with me all the time

[Geraldine]

Hi

The official line is that the living expenses allowances for both IVA and Bankruptcy are the same. However from what I know that is not strictly true. A lot of IVA companies squeeze expenses figures to make it look like the minimum surplus income of £80-£100/mth is affordable. The official receiver in bankruptcy does not need to do that as if there is no surplus no payments are required. As such they can normally be more generous.

To answer your second question, absolutely you include the amount you pay for maintenance but you are also allowed to increase your housekeeping and entertainment expenses to cover the extra cost you have when your children are with you

[patchsteven]

thanks for the reply
i ask these questions because im currently 1 year into an iva and for various reasons its not working out so im thinking of failing iva and starting a bankrupcy but i dont want to find myself in a situation where the OR actually gives me less allowances than the iva and i end up paying more if there is surplus.
finally although i have to disclose all debts to an OR., i have a small loan still to payoff a family member.
do i have to disclose this as well or can i still make payments to them albeit in cash so not officially disclosed or will the or find out .how far into my affairs does he actually go

[James Falla]

Hi patchsteven

I assist many people who have decided to stop their IVA and go bankrupt for various reasons.

In my experiance Geraldine is absolutely right. 99 times out of 100 the Official Receiver tends to be more generous regarding living expenses allowances. For example in the past month I have helped one person who after her annual review was being asked to pay over £200/mth by her IVA company. Now, having stopped her IVA and gone bankrupt, the OR is taking just £43/mth from her.

In terms of repaying family members, if you are able to do so out of funds you can save from your agree living expenses budget it is absolutely fine. As such there is normally a way to do it as long as the payment you are trying to make does not put you under too much financial pressure.

If you would like to have a chat with me about the option of stopping your IVA and going bankrupt, the likely amount you will be asked to pay and the family debt, please give me a call on the number below.

[patchsteven]

Thanks for your reply James.
I further question if i may
How does the OR work out my monthly income
will he go on what i think i will earn this current year and declare or will he take an average of the last 12 months
The reason i ask is because im currently receiving a pension monthly from previous job and am now working again but get paid 4 weekly.
i work in transport logistics so im constantly getting regular overtime due to the nature of transport but i think its a steady amount each month .imjust worried that if he goes on lasts years earnings this wont be a true reflection of current earnings as im expecting to earn less this year and am also now in company pension scheme so 7.5 percent of my 4 weekly wage is deducted for pension scheme

[James Falla]

When you complete your application form you will need to declare what your monthly income is. If you are employed the official receiver will consider the total of your monthly wage plus any other regular income such as a pension.

If you get overtime meaning your earned income changes every month, my advice is to use a figured based on the average of your past 12 months wage slips. However if you feel this average is too high then you must reduce it accordingly. If the OR questions how you came to the figure you can explain your logic. They will normally carry out a review 3-4 months after you go bankrupt so they can check whether your prediction is accurate.

This is possibly one of the most important areas to get right in your application. I would complete this with you if you use my assistance service. Many people find this an invaluable part of the service I offer.

[patchsteven]

thanks james for your advice and yes i would like to use your service when im ready to declare bankrupcy but on that note can i ask what the time lag is from starting to stop paying into my iva before it actually fails and creditors start hassling me again.
i currently have a ford car on finance but cant afford it anymore and have not paid enough to be able to voluntarily terminate so im considering stopping payments on that too so that they repossess or i voluntarily surrender car but when they sell it there will be a loss so i will probably have to put the amount owing into the bankrupcy also
so my whole logic is if i stop payments on iva and car from next week when payments fall due, do you think this will give me 2 -3 months of saved payments to save for bankrupcy fees and a cheap 2nd hand car before car is taken back and other creditors in iva realise its failed

[Geraldine]

Hi patchsteven

When you stop paying your IVA your creditors will not be aware of this until the IVA company actually terminates the arrangement and informs them (normally 3-6 months from the first missed payment). Then it is unlikely your creditors will start chasing you for at least another 3 months as it seems to take them this time to update their systems.

So you dont really have to worry. You will have plently of time to save the money you need for the bankruptcy and to get a cheap car before you start getting hassle from any of your creditors