Due to current situation should my patner File for Bankruptcy?

[Bgm_co]

Hi,

 

My partner has a debt of 28k to 11 different Credit Cards, Loans and bank account over drafts.

 

Curently these debts have been consolidated to one monthly payment through a company called Ashley Park. She pays them in the region of 120-130 a month. But to be honest these payments do not seem to have reduced the figures by one penny after she has been paying them for around 18 months. Which to me seems like a pointless exercise as the overall debt is not reducing.

Going this way it would seem like she would be paying this consolidated figure for ever!! Which is not going to help her get financially stable for a long long time..

 

I have suggested that I think its a good idea to go bankrupt, and clear these debts this way...

 

Can anybody here advise whether they think Bankrutcy is a good solution in this case?

 

Also on a side note.... If it is a good idea, would it be advised that we close our joint bank account and reserve account?

[Dodgy Geezer]

My partner has a debt of 28k to 11 different Credit Cards, Loans and bank account over drafts.

 

Curently these debts have been consolidated to one monthly payment through a company called Ashley Park. She pays them in the region of 120-130 a month

 

Is this under an IVA, or a DMP ?.

 

 

 

 

 

 

 

 

 

.

Edited November 14, 2009 by Dodgy Geezer

[Bgm_co]

Is this under an IVA, or a DMP ?.

.

 

I'm not sure if it is either?!

 

On the "letter of Engagement".. It says.. " Based on the above information, we have recommended a Financial Management plan as the best solution for you."

 

They basically make 25quid out of her a month and pay her debts with the remaining of her monthly payment.

 

"our management fee is charged at a rate of 17.63% of your disposablr income. There is also a minimum and maximum fee bracket. The minimum fee that will be charged is set at £25.00 and the maximum at £100 in any one month. the 'disposable income amount' is the payment you make to us on a monthly basis, to distribute to your creditors on your behalf, and is payable motnthly. This management fee will be deducted from your monthly payment, before the remainder of funds are distributed to your creditors."

 

I don't know how long the arrangement is for but I reckon from a rough working out from the amount owed and the amount she pays that this arrangement will last atleast 20 years... CRAZY..

[Dodgy Geezer]

Its my understanding that such a plan is just that, a management plan, and could last forever.

 

I suggest you ask abut the possibility of an IVA.

 

This, if agreed, will be a legally binding agreement that you pay a certain amount each month, for a certain period. If completed the balance of the debt is written off, and no further action can be taken against it.

 

 

Have a look at Ashley parks own web page on IVAs >>>>> HERE

[Bgm_co]

Its my understanding that such a plan is just that, a management plan, and could last forever.

 

I suggest you ask abut the possibility of an IVA.

 

This, if agreed, will be a legally binding agreement that you pay a certain amount each month, for a certain period. If completed the balance of the debt is written off, and no further action can be taken against it.

 

 

Have a look at Ashley parks own web page on IVAs >>>>> HERE

 

Thank you we'll sit down and look through the link later when she is home..

 

Do you think an IVA is better than Bankruptcy, do you know how they base what her repayments would be on?

[Dodgy Geezer]

IMO Bankruptcy should always be a last resort.

 

Repayments are based on the ability to pay regardless of which method you choose.

 

With an IVA you negotiate with your creditors, come to an arrangement, pay for 5 years, then its over.

 

With bankruptcy, your creditors are told by the Insolvency Service how much they will get.

 

You would probably pay about the same either way, but one ( IVA ) is much better in the long run although it would last 2 years longer. Its much less damaging to your future financial prospects.

[Dodgy Geezer]

One thing that we have not mentioned is.

 

Has she applied for the original agreements to see if they are enforceable.

 

See HERE

 

And submitted her claim for unfair bank charges.

 

See HERE

[loobyloo85]

Hi Bgm

 

It seems that the company have offered to consolidate your partner's debts, but sometimes consolidating only worsens the situation, as it ca lead to high interest rates and unaffordable monthly payments.

Is there anyway she can come out of this agreement? If so, she would need to cancel asap. A debt management plan would be much better for her than consoliating. She could make one monhtly payment into the DMP until the debt is cleared in full. She could clear her debt in full in a DMP, or go into the DMP on a temporary basis until she decides what she would like to do.

Bankruptcy is usually considered as a last resort. An IVA would be an alternative to bankruptcy for her to consider, however, she would need at least £100 surplus for this, and she would need to include seperate debts rather than the one consolidated loan.

x

[Bgm_co]

I think she is going to look down the route of the IVA..

[loobyloo85]

OK, I wish her all the best with this. Non fee chargers for IVAs are Payplan. They do not charge upfront costs, so even if her IVA is rejected by the creditors, she will not have to pay for their services up until that point.

Their website is www.payplan.com

[sequenci]

If there are no assets then I would recommend bankruptcy over an iva in most circumstances, especially if the surplus income is less than £200 per month.

 

The best thing to do is to get holistic debt advice from one of the debt-help charities; it's impossible to make a recomendation without knowing more facts about the situation.

 

National Debtline: 0808 808 4444

[babybear39]

CCCS also offer a free payplan if you have enough disposable income.

[sequenci]

With an IVA you negotiate with your creditors, come to an arrangement, pay for 5 years, then its over.

 

Actually, an Insolvency Practitioner puts a formal agreement to the creditors for them to vote on. An IVA is underpinned as part of a court order.

 

You would probably pay about the same either way, but one ( IVA ) is much better in the long run although it would last 2 years longer. Its much less damaging to your future financial prospects.

 

I think the financial implications are both quite similar as far as the effects on your credit file is concerned. An IVA actually stays on the insolvency register longer than bankruptcy does(!)

[geoffthechef]

dodgy geezer i see that you seem to prefer people having this debt crap round their necks for five years via iva or the like rather than getting rid of all the worry and stress straight away (if you are lucky and don't have equity) by way of bankruptcy......why is this the case..

[Dodgy Geezer]

If there are no assets then I would recommend bankruptcy over an iva in most circumstances,

 

Why ?

 

Have you ever been declared bankrupt yourself ?

 

OK, so you might have helped one or two people along the way, but do you know how it feels.? Have you ever experienced the trauma of bankruptcy over an IVA ?

 

That feeling of doing " Something " to redeem yourself ?.

 

Let me know im listening.

 

 

Originally Posted by Dodgy Geezer

With an IVA you negotiate with your creditors, come to an arrangement, pay for 5 years, then its over.

 

Actually, an Insolvency Practitioner puts a formal agreement to the creditors for them to vote on. An IVA is underpinned as part of a court order.

 

Ok, yes we know that, but due to the circumstances, we are trying to keep it simple. We dont care " Who " has the final say.

 

 

You would probably pay about the same either way, but one ( IVA ) is much better in the long run although it would last 2 years longer. Its much less damaging to your future financial prospects.

I think the financial implications are both quite similar as far as the effects on your credit file is concerned. An IVA actually stays on the insolvency register longer than bankruptcy does(!)

 

Really ??????????????????????

 

Well pray tell me what i am missing.

 

A completed IVA will ALWAYS carry more weight that a discharged bankrupt.

[sequenci]

Why ?

 

Have you ever been declared bankrupt yourself ?

 

No, but I've helped hundreds and hundreds of people through the process in my day job.

OK, so you might have helped one or two people along the way, but do you know how it feels.? Have you ever experienced the trauma of bankruptcy over an IVA ?

No, but I've guided my clients through it on a daily basis.

 

An IVA is drawn up via the same legislation, many of the implications are similar. Usually people may choose the IVA route if they have an asset to protect or due to the fact that there may be a work-related implication. I think these IVA firms have tried to imply that an IVA is an easy option, it really isn't; an IP will be wanting to know all about your financial affairs for five years. If anyone does choose an IVA I would hope that they at least choose a protocol compliant IVA firm.

 

Also, you will need to guarantee that you can meet the instalments for 5 years, IVA's are notoriously difficult to modify. Also, the IP will want a percentage of any overtime or windfalls etc.

 

As I said earlier, It is very difficult to advise on what route anyone should take without spending a good 20-30 minutes going through their precise circumstances. When there is a debt situation there is no one size fits all answer and it is nigh impossible to advise anyone about a debt option via an internet forum as there could be all manner of issues that would need to be considered.

[citizenB]

bgm, I would do as sequenci advises and contact national debtline. They are extremely helpful and will help you assess your options. They are also free

[Dodgy Geezer]

d

dodgy geezer i see that you seem to prefer people having this debt crap round their necks for five years via iva or the like rather than getting rid of all the worry and stress straight away (if you are lucky and don't have equity) by way of bankruptcy......why is this the case..

 

Where have i said that this is the case.?

 

Could you give me a link to you own bankruptcy thread, i would certainly like to read that.

[Dodgy Geezer]

 

As I said earlier, It is very difficult to advise on what route anyone should take without spending a good 20-30 minutes going through their precise circumstances. When there is a debt situation there is no one size fits all answer and it is nigh impossible to advise anyone about a debt option via an internet forum as there could be all manner of issues that would need to be considered.

 

Ditto.

 

Bankruptcy is a very personal, often traumatic experience. And should only be considered as a last resort.

 

Any, and all possible options should be considered first.

[out of cash]

hi all

 

i think if you mis a payment on the iva route you are automatically bankrupted soon after.

[out of cash]

think if you miss a payment on an iva you are made br auto

Edited November 25, 2009 by out of cash
repeat post

[sequenci]

think if you miss a payment on an iva you are made br auto

 

This isn't alwasy the case, it would be down to the terms within the IVA agreement. If an IVA fails the Insolvency Practitioner is duty-bound to do the 'next best thing' for all parties involved. In reality a Bankruptcy clause is only going to likely within an IVA if there are assets, such as a house.

[loobyloo85]

Hi, in response to the above about bankruptcy and IVAs, some people do not want to become involved with bankruptcy due to the heavy stigma attached to this, and the fact that this can affect employments, and assets. I agree that those who have no assets will not lose anything by going bankrupt, but some people do not wish to have their name listed in a newspaper, and want to pay their debts back in full, or as much debt as they can. The IVA is a good alternative to bankruptcy, and not all IVA companies, like those seen on TV charge fees. In the IVA, all assets are protected, the name doesnt go on a newspaper. It is only issued in a magazine that it purchased purely by IPs. The IVA doesnt affect employments or carry a stigma. Therefore some people may want to pay as much as they can back for 5 years, rather than having their debts cleared in 12 months, but everyone knowing about their situation.

[debtinfo]

Although most bankruptcies dont go in a local paper anymore. And IVA details are as publicly available as bankruptcies if you have access to the internet.

[loobyloo85]

Hi out of cash.

 

It is usually if you miss 3 IVA payments, that your IVA fails. Even if your IVA fails, the creditors do not always make someone bankrupt. It costs the creditors a lot of money to make someone bankrupt, so they want to know if it is in their best interests first before doing this. Therefore, if an IVA failed for someone who had no assets and lived in rented accomodation it is very unlikely they will be made bankrupt.

If an IVA fails, there is always the debt management plans to fall back on. A lot of people automatically presume that if an IVA fails, that persona will automatically be made bankrupt, but this is not true