IVA or Not?

[simmi]

My partner has got himself into financial trouble and can't meet the payments from his numerous creditors. I have kept all my regular payment up to date but now we have no money left at the end of the month to live or pay bills.. Is an IVA the answer and would this have serious implications for our financial future? Any feedback would be welcome!!

[themas]

IVAs are being heavily publicised by a lot of companies, and sometimes people are persuaded to enter into them when an alternative solution would be better. In most cases, there is no point in an IVA unless you own a house (which could be lost if you go bankrupt) or are in a job which would be forfeit by bankruptcy. In many cases bankruptcy is a better option, or (depending on the financial circumstances) a debt management plan.

You need independent free advice - do not go to any of the fee charging companies. Go to the local CAB, or phone CCCS or Payplan.

Your priorities should be to have enough money to maintain a reasonable economical lifestyle and to pay the essential household bills (rent or mortgage, council tax, utilities etc.). Paying ordinary commercial non-secured creditors comes after that.

Any solution is likely to have adverse implications for your partner's credit rating - and for yours if you have any joint finances, but this is something you will have to live with if you are to get out of the problem.

[D143237G]

I agree with themas. I was in the same boat. My debts were out of hand and I took advice not only from CAB but also the Credit Consumer Counselling Service (CCCS) which I felt personally knocked the spots off CAB. As I had no assets I was advised by CCCS to go bankrupt rather than go for an IVA. If you have assets then IVA is probably your partner's best option. You must not go into any of this this lightly however and you must ensure you are fully aware of the impications. Another very good source of fere information is the insolvency service website.

One thing about IVA is that they will look not just into your partner's outgoings but the total household income and then they take all that is left after paying for essential expenses. This also penalises you.

With bankruptcy they just look at the debtors income plus a contribution from anyone else in the household. They then take between 50 and 65% of what is left of the debtor's income. Although someone may be discharged from bankruptcy after 12 months these payments carry on for 3 years.

By going bankrupt I am very limited as to where I can bank and what I can do but my wife isn't. She has kept her bank account, cheque book, credit card etc.

Unfortunately with bankruptcy your partner's name and address will appear in the local paper and the London Gazette.

You must also remember that if your partner does go bankrupt the credtors will come after you for the full amount of any debts that are in joint names.

Whatever you do don't do anything until you get independent free advice.

There is one positive side to bankruptcy. The phone finally stops ringing with people demanding money.

My wife and I can live quite comfortably on what we have left although there is not a lot to spare or much in the way of luxuries. With what would have been left with an IVA it would have been a real struggle. (

[Finance Guy]

Ditto the above.

Avoid debt free direct, baines & ernst, Compass finance, etc like the plague!!

CCCS or payplan is your first port of call

www.cccs.co.uk

They are fair, honest and free.

Good luck