Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By Icarus
#2956 Hi - firstly congrats on a top site, a very useful resource!

I am just about to sign the proposal forms for an IVA but having now read it all, have some major concerns!

My situation - £42k debt. No Assets except an old car. Job not affected.

The IVA looks pretty nasty with rising contributions each time your P60 comes around + 5 years etc. I also dont trust the company handling it.

So, I am now looking much more at bankruptcy, but would like to ask you good people some questions...

1) Is the credit file damage the same? are they in the same "Category"?

2) How long am I banned from being a Co. director?

3) If I lose/leave my job, will the OR reduce contributions?

4) If my salary drops, will the OR reduce contributions?

5) I have an Alliance & Leicester current account and as a new customer (setup for the IVA) have no debt with them etc - would they let me keep my account albeit in a reduced functionality version?

6) Are there any restrictions on moving overseas once you go?

Hope you can all help... thanks in advance!

By Icarus
#2959 oh and forgot one more q!

How does the Bankruptcy work with an address? Does it knacker everyone else living at that address? How can you protect from that?

Thanks again!
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By JaneClack
#2964 Right -people choose IVAs if they a) have an asset (like a house) which they wish to protect b) wish to continue trading and c) do not have a job which precludes bankruptcy. There are others who feel they cannot go bankrupt for whatever reason. If you do not fall into any of the above categories then the effects of bankruptcy would be pretty much the same - as Simon has pointed out on Ask the Expert for the last year or so.

In bankruptcy you would be extremely unlikely to be allowed to keep your bank account - the bank is more likely than not to freeze it.

An IVA sits on your credit file for six years - as does bankruptcy.

You are not allowed to be a company director for the term of the bankruptcy. Any income payments arrangement would be changed if your income changed - either upwards or downwards and you would need to let the OR know within 21 days of the change. After your interview with the OR you can travel where you like!

Look at the information at where there are leaflets on most of your questions!

Talk to your case officer - an IVA should be your decision based on all the facts. Keep in mind why you opted for an IVA in the first place - you should have signed an R3 leaflet and discussed bankruptcy anyway. I do hope you have not paid any money upfront as you would be unlikely to retrieve that. Good luck with whatever you decide. :D
By Icarus
#2982 Thanks Sarah ....
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By JaneClack
#2986 No probs.

Let us know how you get on!