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The only way to truly answer to Is an IVA better than a bankruptcy? would be to look at the failure rates of IVAs after the first 18 months.

They sound great at the outset but a significant number fail in the first two years. More importantly, the IVA companies that arrange these debt solutions are motivated to sell IVAs ahead of anything else as there is more profit involved, and this biases their presentation accordingly.

Individual Voluntary Arrangements and bankruptcy are both legally contracted debt solutions, yet are essentially very different. The prime function of an IVA is to protect assets such as properties and businesses, which might otherwise be lost in bankruptcy. Bankruptcy, on the other hand, is ideal for those who do not have significant assets, are living in rented and holding down everyday jobs like the rest of us. They both harm your credit rating, but it is a fact that discharged bankrupts can now get mortgages within three years (other forms of credit within 18 months), whereas there is no chance of this happening for those tied into IVAs for 5 – 7 years (many IVAs extend well beyond 60 months).

The big selling point for IVAs is that part of the debt will be written off ‘using Government legislation’ based on affordability, yet any apparent savings are soon eroded by the fee structures.

We speak to  dissatisfied IVA holders who all complain about the same things : once the IVA is set up it is almost impossible to speak to anybody from the company; there are frequent ‘reviews’ and requests for more money, and there is very little understanding if anything goes wrong with your finances (illness, redundancies, etc.).

Another complaint is that nothing appears to be paid off the debt for the first two years. The reason for this is that you are paying off the set up fees during this period and not a penny goes to the creditors. Is an IVA better than bankruptcy is a question often asked. The answer each and every time will be determined by……..”What have you got to lose’.

We could talk considerably about the injustices of IVA companies that have set up arrangements for those who should have been recommended bankruptcy at the outset, but what it all really comes down to is whether you have any assets or not. And if you don’t, you certainly wouldn’t want to be tied into an IVA for five years.

Feel free to call us with any other questions or for bankruptcy help on 01425 600129, we are here to help. Our staff are ex-financial services and have the experience to get you the best result every time. We look forward to hearing from you.

Many of the people we speak to are surprised when we ask about total household income. 'Is my partner's income taken into account in bankruptcy ? ' is often a question asked. Especially when only one party is going bankrupt. But believe us when we tell you that getting the Income and Expenditure right is really important, as this will decide whether you end up in an Income Payments Agreement (IPA) for the next 36 months, or not.

It's what your partner contributes and not what they earn that is the key issue
For this reason, you need to know we need to know what your partner contributes towards household income, rather than what he or she earns. It could be, for example, that your partner takes home £1200 per month, but by the time his / her car finance, credit cards and other expenses (child support, for example) has been deducted, only £700 is available and this is the figure we are talking about - what they contribute towards the bills and food.

This would not apply in cases where both parties are going bankrupt - here we would need to know the full take home pay of both parties. It's not all bad news, though as now we can factor in allowances for two people instead of one and that makes a big difference.

Is my partner's income taken into account in bankruptcy

People thinking about doing their own bankruptcy would do well to seek advice when attempting the Income and Expenditure as a bodge job could cost you dearly. Even an IPA of £80 per month works out to just under £3000 over a 36 month period, something you could well do without. Our experts know all the allowances and will guide you through this.

Feel free to call us with any questions relating to Is my partner's income taken into account in bankruptcy  or for bankruptcy help on 01425 600129, we are here to help. Alternatively, post a question on our home page and we'll help you that way. Please note, Court appearances are no longer required for bankruptcy and Bailiffs do not form part of the process.

 

 

Bankruptcy UK-Debt Solution Bankruptcy Experts

Bankruptcy UK-Debt Solution Bankruptcy Experts