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I’m thinking of abandoning my IVA. I am two and a half years into an IVA and wondering if bankruptcy might have been a better solution. My total debt is £35,000 from loans and credit cards. My only asset is a car worth about £800 and I live in rented accommodation.

My IVA payments take into account total household income despite the debts having nothing to do with my partner, I had them long before meeting him. I have to pay 50% of household expenses, but my IVA payments company says he should pay more, as he earns more. How can this be right, seeing they aren’t even his debts?

Although it’s true that total household income is taken into account when assessing affordability, it should only be what he contributes to the household that should be considered and not his entire income.

Therefore, if he earns £1200 per month but has personal expenses of £400 (loans, credit cards, etc), then only £800 should be considered. The IVA company is almost certainly aware of this, but will milk the situation for all it’s worth as this is their income – don’t believe for a minute that your payment is going to the creditors.

However, what concerns us more than anything is why you are in an IVA in the first place, as you have no assets. You will definitely keep the car and the rental isn’t under threat. IVA companies are ruthless exploiters of people’s fear of bankruptcy and rarely, if ever, fully explain both options when approached.

The first 20 payments of an IVA go directly into the IVA companies’ pockets and not a penny goes to the creditors. In fact, in most cases, the original creditors would have long since sold the debt on to third party debt collectors and these are the people who will eventually receive a trickle of money from the IVA company. Our speciality is taking people out of IVAs and into the protection of bankruptcy, so call us for a chat if you need assistance.

Bankruptcy UK specialises in taking people through the bankruptcy process and submitting bankruptcy applications online. Court appearances are no longer required for bankruptcy. Call us for an informal chat about your circumstances on 01425 600129.

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