default my iva

[dannyc08]

I entered a joint iva with my wife in 2006 but I think we rushed into it as we where desperate. for �25000 of debt we are paying back �4000 and the payments are making things hard to get by. In november this year the payments rise to over �700 per month and that is reall going to make things difficult. I know its a desperate measure but i'm thinking of defaulting my IVA and going bankrupt. Any adivse on how to do this or if i can do this.

[dannyc08]

Sorry that should read �40000 not �4000.

[themas]

I don't understand how you can be paying back �40,000 on �25,000 of debt. IVAs usually result in less than the total amount of debt being paid.

Without a lot more info it is not possible to see whether bankruptcy would be a better option, but yes you can default the IVA & go bankrupt (you alone, or also your wife - but hers would have to be a quite separate bankruptcy, they are not joint). Go to the Insolvency Service website & look through the various booklets, &/or get advice from a FREE debt service such as CAB or CCCS.

[dannyc08]

thats exactley what i said. The iva company said that it included their fee's. I've questioned this severall times but no luck. they have asked me to write a letter which i have. Hopefully i'll get somewhere.

[themas]

I don't believe the fees on an IVA for �25000 should be anywhere near �15000, which is what you are implying.

If that is what you have been told and it is in your IVA proposal document which was approved, then I would be very suspicious as to whether the Insolvency Practitioner is really working in your interests rather than his own.

All IPs have to belong to a professional body which has some responsibility for overseeing their activities. If you feel so inclined, you can find out which body your IP is a member of and raise a formal complaint about the level of fees you have been charged. Probably best to tell the IP in writing first that you will do this unless you get a detailed satisfactory explanation of why the fees are so high, or get a very subatnail decrease in the amount of the fees. (You may be able to get an idea of a normal level of fees by talking to CCCS, who are a free advice agency & also involved with IVA providers.)

[Buenchico]

If you can't comply with the conditions of your IVA, you might have no other alternative than bankruptcy. However, if you're trying to keep your home, you might want to look into the possibility of applying for an FTVA (Fast Track Voluntary Arrangement). You have to go bankrupt first but, if you can then get an FTVA, your bankruptcy is annulled and you might be able to keep your house. To do so, you have to convince your creditors that they'll get more money from the FTVA than they would if you remained bankrupt. That would probably mean you'd need to enter into an agreement to continue making repayments for considerably longer than the 3 year bankruptcy period but it might be appropriate for your needs.

To learn more about bankruptcy and FTVAs, start here:
http://www.insolvency.gov.uk/

Chris