If you need debt advice we can help

[Nicvic73]

Hi
I’m looking to clarify some information about going bankrupt, I started my Iva last September I’ve received a letter regarding an annual review. It seems that my debt now is considerably lower now than when it started due to ppi I started out with £20,000 it’s now only just over £5000.
I need to know

1 can I still go bankrupt ( been told to use creditors balances outstanding when I started my Iva)
2 what happens if my application is turned down do I get the £680 fee back
3 if my application goes through what sort of questions do you get asked by the official receiver

I want to make sure I have everything right & im properly prepared
Thanks

[Hayden]

Hi Nicvic73 and welcome to the forum

You can certainly stop your IVA and go bankrupt if you wish. You may decide to do that because you can no longer afford the monthly payments or you feel the Arrangement is no longer suitable for you.

The fact that you believe your debts have reduced to £5000 does not stop you going bankrupt. There is no minimum debt level. However given you are not a home owner and if you own a car it is worth less than £1000 I would recomend you consider a debt relief order. This would cost you just £90 compared to the £680 bankruptcy fee.

If you do apply for bankruptcy it is very unlikely your application would be rejected. I understand the only reason this could happen is if you have not lived in the UK for the last 6 months. Given you have there should be no problem. However if it is rejected you would be refunded £550. The government keep £130 to cover their costs.

Once you are bankrupt you normally have a telephone interview with the OR. They will ask you about the background of your debt and the reason for the debt. They will also want to talk about your car (if you have one) and your living expenses budget to see if you have any spare income.

Hope this helps. Let us know if you have more questions

[Nicvic73]

Hi

Now I’m really confused because James Falla recommended I went bankrupt & he also said my Iva will need to be terminated before I can apply for a DRO & this takes about 6 months? I’m not sure about doing that because I do not want to be harassed my creditors for the next few months it was bad enough applying for the Iva!

Also I the company I have used bent the truth about my income I had to agree that my wife earns £800 a month which she does not because she has a disability so I literally can’t really afford my Iva the only reason I’ve managed to pay it each month is help from my parents & they are giving my the money to pay the bankruptcy fee.

What do I do?
Thanks

[Nicvic73]

Also could you tell me if my parents use their credit card for the bankruptcy fee will there be any come back with their credit card company because they are concerned the credit card company may decline the transaction
Thanks

[James Falla]

Hi Nicvic73

As Hayden has said if you are no longer happy with your IVA you can certainly cancel the Arrangement. You can then consider either bankruptcy or a Debt Relief Order.

Debt Relief Order
As we have discussed if you can confirm that your total outstanding debt is less than £20,000 then from what you have told me I believe you would qualify for a DRO. As Hayden has rightly said this would be a cheaper option for you as it would cost just £90.

If you decide to go down this route you cannot apply until after your IVA company has written to you terminating the Arrangement. The fastest this will happen is 3 months from the date you stop your payments and tell them you want them to terminate. Some IVA companies get it done in these times scales. Others take longer. In my experiance the IVA company you told me you are with will often take 5-6 months however it could be that they will do it faster.

Remember: You will not get harrassed by your creditors before your IVA company terminates your IVA. UNtil this time they still think you are paying into the Arrangement and they are still legally bound to it.

Once your IVA is terminated you can then approach an approved intermediary to help you start the DRO application.

Bankruptcy
If it turns out that you do not qualify for a DRO because your total outstanding debt is more than £20,000 you always have the option of bankruptcy.

Equally if you do not want to wait until your IVA is terminated and you just want to get things done then you could decide to apply for bankuptcy at any time anyway. You do not have to wait for your IVA company to terminate the agreement if you decide to do this.

Bankruptcy Fee
If you do decide you just want to get things sorted and go bankrupt rather than waiting to apply for a DRO your parents can pay the bankruptcy fee on your behalf no problem. They can use their credit card and it certainly would not be declined.

I hope this helps.

[Nicvic73]

Hi
Once I’ve submitted my application how long before I’m informed of the outcome & how will I be informed?

As long as everything goes ok when am I likely to hear from the OR? & what kind of questions will I get asked?

Thanks

[Nicvic73]

Helloooooo?

If I submitted my application Friday I’m assuming nothing will be done over a weekend??

Thaaanksss

[Hayden]

Hi Nicvic73

Sorry for the late reply. To confirm if you submit your bankruptcy application on a Friday it will not be considered until Monday. As far as I am aware the Adjudicator will normally look at the application the next working day so I would have thought your's would have been considered on Monday.

Did you submit last Friday? If so I assume that you have now been made bankrupt?

Once you are bankrupt an examiner from the official receiver's office will normally contact you within a few days to arrange to have an interview with you. For more info about the kind of things they will want to discuss see: The Official Receiver

[Nicvic73]

Hi

I’m unsure at the moment weather to go bankrupt or wait until my Iva is terminated & apply for a DRO especially as it’s only £90 & my debt is now only just over £5,000.

Any advice?
Thanks

[Geraldine]

Hi Nicvic73

If you qualify for a DRO then waiting to apply will save you £590. So financially it is certainly worth it.

One reason you might want to avoid the DRO option is if you think your income is going to improve in the next 12 months so pushing your disposable income over £50/mth. If this were to happen the DRO might then fail and you would be back to square one.

If you are confident this is not going to happen then a DRO is going to save you money. However it is useful to remember that in your situation that is the only benefit over going bankrupt.

If i was in your position and your parents are willing to pay the bankruptcy fee for you I think I would just go bankrupt. It will mean you can get started straight away rather than having to wait a few more months and continually being stressing about it...