I have debts of £23k with a few different creditors which I have been managing to slowly pay off, but I have recently been diagnosed with a condition which has meant I have had to reduce my working hours from full time to part time and now I’m struggling to pay anything. We live at home with my mum so our rent is low. I have a car which is not worth more than £1,500 but is needed due to my condition as I can’t walk far. We would like to buy a house in the distant future. Which do you think would be better: an IVA or Bankruptcy? Which would have more of a negative impact on our future?
Starting from the top, an IVA is specifically designed to protect assets such as properties and businesses, and are wretchedly expensive debt solutions for those in your position i.e. no assets and on low income. Besides, we doubt you would be accepted into an IVA given your earnings. The fact that you have had to reduce your hours will actually help you in bankruptcy, as it is now most unlikely you will be expected to pay anything in an Income Payments Arrangement. As for your car, we feel that in the circumstances you will be allowed to keep it despite it being slightly over the allowed limit. Regarding buying a property in the future, Mortgage Advisers are now able to arrange mortgages for those who have discharged for three years, provided a) there has been no trouble in the interim and b) you have a minimum 25% deposit.
Bankruptcy UK offers bankruptcy help across the board, including dealing with creditors like HMRC, completing the all-important Income and Expenditure and professional submission of the application online. Call us on 01425 600129 or 0800 5977 977 for a chat about your circumstances.