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This is where to post your first questions about any debt problems you have
By cpharo2812
I currently have an Iva for my £25000 debts. I am now thinking I made the wrong decision taking the Iva and maybe I should have applied for bankruptcy instead. I live in a housing association property and do not own any assets.
My Iva company said if I apply for bankruptcy the living allowances accepted are lower than what they would be in an Iva - is this true.

This would be my second time going bankrupt, I made myself bankrupt 9 years ago so am I even able to apply for bankruptcy again?

I am worried if I apply for bankruptcy I might end up with a having to pay a higher ipo then what I pay for my Iva each month.

I dine won’t to end up paying more as I am currently only just managing my Iva.

Can anyone advise? :)
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By Hayden
Hi cpharo2812 and welcome to the forum :)

Given you are not a home owner and have no assets I think you would be better off going bankrupt. You will certainly not end up paying a higher amount each month and this is why:

As far as I am aware what you have been told by your IVA company is not correct. The living expenses budget allowances are basically the same whether or not you do an IVA or go Bankrupt.

From what I have heard and read the official receiver is actually more generous in terms of expenses than would be the case if you are in an IVA and so the monthly payment you make is likely to be less. Even if it were the same (it certainly would not be more) in bankruptcy you only pay for 3 years compared to 5-6 in an IVA so you save yourself 2-3 years of payments.

The fact that you have been bankrupt before makes absolutely no difference. You only have to mention it if it was within the last 2 years so no problem there.
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By Geraldine
Hi cpharo2812

I agree with Hayden. It seems as though you would be better off cancelling your IVA and going bankrupt. You are allowed to do this at any time.

You IVA company is not correct about the expenses budget. I think they were trying to sell the IVA to you. As Hayden has said if anything the OR will allow higher amounts in your living expenses. They certainly will not be any lower. As such any IPA you get will be no more than your IVA payments and will only last 3 years!

The fact that you went bankrupt 9 year ago will have no affect. The OR will not treat you any differently.

If you want more help with this let us know. :)
By cpharo2812
I think I’m defiantly going to apply for bankruptcy. I opened a co-op casmimfer a point 9 years ago when I went bankrupt before.

Will I be allowed to keep this account- I emailed co op to ask and they said it would be up to the official receiver. If I can’t keep the account where do I get an account from?

Also I will meee to pay for my bankruptcy in instalments how do
I stop the creditors from taken court action whilst I’m paying the instalments? I don’t want bailiffs or dent collectors turning up at my door.

I currently have an Iva so do not get harradsed I understand I need to let my IVA fail but it will take me at least 5 months to pay the bankruptcy fees.

I work for an insurance company who are part of PIB as an account handler selling policies. The company are regulated by the financial conduct authority. Will I loose my job if they find out. It does not say in my contract that I’m not allowed to be bankrupt.

They did ask in the application form when I started there 2 years ago if I had been bankrupt in the last 5 years or had an Iva but I didn’t at the time so answered no.

Any help would be very much appreciated.

Kind regards,

User avatar
By James Falla
Hi Charlotte

Hayden and Geraldine have given good advice here. I would say bankruptcy would be a far better option for you. I work with many people moving from an IVA to bankruptcy and in 100% of cases (given the income and expenses budget is completed correctly) any ongoing IPA payments are lower than what was being paid in the IVA. Often payments stop altogether.

The reason for this is that it is in the interest of IVA companies to ensure monthly payments are as high as possible. Their fee is based on 15% of these. The Official Receiver in bankruptcy has no such restriction. They will make an honest assessment of your income and expenses and only take money from you that you can really afford to pay.

In terms of your account with Co-Op. As long as this is a basic cash minder account then this will remain open. Co-Op will allow you to continue using it so you will have no problem there.

Once you stop paying your IVA you can then start putting your payments towards your BK fee. The IVA company will normally take at least 3 months to terminate the arrangement. During that time your creditors will not chase you. In reality they will normally not start their collections proceedures for 3 months or so after the IVA is terminated so you should not worry about being chased by them if you plan to go bankrupt within 5 months.

In terms of your employment if there is no specific clause in your contract prohibiting bankruptcy or insolvency you should be fine. Your employer will not be told so the only way they will find out is if they do a random credit check on you. This will not happen unless you have agreed to it as part of your contract.

I hope this helps. If you need further asistance let us know.