HELP! Bankruptcy or IVA?

Unfortunately these are the only options I have, and as first year computer science mature student with two small children, it is a decision I cannot take lightly. Obviously I want to better mine and my children's future and to get a fine job at the end of the degree, but a past purchase on a leasehold property may close many doors for me.

The leasehold property was brought through auction but down to the council wanting to have a decent home for everyone by 2012 my share of the restructure of a council block I lived in (next to drug dealers, wife beaters and addicts and no garden) was 26k (as for the tenants they didn't have to pay - I had no choice but to pay) - I was unable to sell (negative equity) and being a single parent of 2 and only working part time I couldn't afford to live there so the property was repossessed and sold at auction for 30k - leaving me with a 32k debt.

Now with this debt (and only debt) I cannot afford to pay it, and I'm considering IVA or wave goodbye with bankruptcy..but I am worried that my future prospects will be limited in the technology world..finance, security (i was interested in computer forensics) - I have asked step change, my uni, and citizens advice and they are really not sure. And with step change phoning this week to finalize the IVA I am a still unsure whether to sign: Advise or signposting to an expert on these things will be very helpful!!

Thank you for your time

Reply 1

donutaud15

22

Avoid bankruptcy if you can. IVA is marginally better. Can't you go on debt management?

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Reply 2

hbillingham80

OP

Original post by donutaud15

Avoid bankruptcy if you can. IVA is marginally better. Can't you go on debt management?

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If I went with a debt management plan it will take 30 years to pay it off at £185 a month which I cannot afford as a student at the moment

Reply 3

donutaud15

22

Original post by hbillingham80

If I went with a debt management plan it will take 30 years to pay it off at £185 a month which I cannot afford as a student at the moment

yeah but when you start working you would have the option to increase it. it just seems better for your credit and career plans if you stay away from IVA or bankruptcy.

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Reply 4

donutaud15

22

Original post by hbillingham80

If I went with a debt management plan it will take 30 years to pay it off at £185 a month which I cannot afford as a student at the moment

also with 32k debt and £185 a month, it should take about 15 years or so. though I am assuming it's because of interest that it may take 30 years?

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Reply 5

balotelli12

9

Perhaps the UK experts could explain why bankruptcy is to be avoided?

Reply 6

Reue

20

Original post by balotelli12

Perhaps the UK experts could explain why bankruptcy is to be avoided?

It will severely limit your ability to get any form of credit. Mortgages, credit cards, overdrafts, council tax, utility bills, mobile phone contracts etc.

Reply 7

Aliccam

9

Original post by hbillingham80

Unfortunately these are the only options I have, and as first year computer science mature student with two small children, it is a decision I cannot take lightly. Obviously I want to better mine and my children's future and to get a fine job at the end of the degree, but a past purchase on a leasehold property may close many doors for me.

The leasehold property was brought through auction but down to the council wanting to have a decent home for everyone by 2012 my share of the restructure of a council block I lived in (next to drug dealers, wife beaters and addicts and no garden) was 26k (as for the tenants they didn't have to pay - I had no choice but to pay) - I was unable to sell (negative equity) and being a single parent of 2 and only working part time I couldn't afford to live there so the property was repossessed and sold at auction for 30k - leaving me with a 32k debt.

Now with this debt (and only debt) I cannot afford to pay it, and I'm considering IVA or wave goodbye with bankruptcy..but I am worried that my future prospects will be limited in the technology world..finance, security (i was interested in computer forensics) - I have asked step change, my uni, and citizens advice and they are really not sure. And with step change phoning this week to finalize the IVA I am a still unsure whether to sign: Advise or signposting to an expert on these things will be very helpful!!

Thank you for your time

An IVA will have almost the same negative impact on your credit rating and job prospects as bankruptcy, and will cause you greater problems in the future. You legally only have to tell people about the bankruptcy for six years. The IVA will still be having an effect on your rating until it is paid off.

Quite!!

Well strictly there is no need to do anything. If the mortgage company do not pursue it nothing will happen. Even if they do they will give up after 12 months. It is very unlikely they will initiate bankruptcy proceedings. There are large numbers of people in a similar position. Chasing them simply does not produce the cash and costs them money. Bad mortgage debts (at least internally) are often insured anyway, and are written off in the lenders accounts. Oddly enough I would not worry excessively. Many mortgage companies used to lend even to people who had been repossessed previously.

Reply 10

donutaud15

22

Original post by balotelli12

Perhaps the UK experts could explain why bankruptcy is to be avoided?

I suggested debt management because after 6 years it's gone from OP's credit file. bankruptcy would always be a hindrance.

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Reply 11

Alfissti

20

Original post by hbillingham80

Unfortunately these are the only options I have, and as first year computer science mature student with two small children, it is a decision I cannot take lightly. Obviously I want to better mine and my children's future and to get a fine job at the end of the degree, but a past purchase on a leasehold property may close many doors for me.

The leasehold property was brought through auction but down to the council wanting to have a decent home for everyone by 2012 my share of the restructure of a council block I lived in (next to drug dealers, wife beaters and addicts and no garden) was 26k (as for the tenants they didn't have to pay - I had no choice but to pay) - I was unable to sell (negative equity) and being a single parent of 2 and only working part time I couldn't afford to live there so the property was repossessed and sold at auction for 30k - leaving me with a 32k debt.

Now with this debt (and only debt) I cannot afford to pay it, and I'm considering IVA or wave goodbye with bankruptcy..but I am worried that my future prospects will be limited in the technology world..finance, security (i was interested in computer forensics) - I have asked step change, my uni, and citizens advice and they are really not sure. And with step change phoning this week to finalize the IVA I am a still unsure whether to sign: Advise or signposting to an expert on these things will be very helpful!!

Thank you for your time

An IVA remains on your credit file for 6 years. It would definitely still be on your credit file when you graduate. You do need a minimum income amount for an IVA so do check if you are eligible for one. Who gave you the idea for an IVA?

You could first try discussing the matter with the bank and tell them realistically how much you could afford to pay in view of circumstances. They usually would be happy to get something back as 5% of something is still better than 100% of nothing.

Regarding your question about careers, a bankruptcy will put a death knell to quite a lot of careers permanently where you could be an accountant or solicitor with an IVA. What does need to be taken into account is many big name companies do run a credit check on potential employees, some won't take anyone with a bad credit file whatsoever the vast majority would overlook it if you are good and had some financial troubles in the past, the IVA won't make it any worse than it already is due to the repossession.

HELP! Bankruptcy or IVA?

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