Debt Forum - Extracts From The Myvesta UK Debt Forum
Forum Question....
During 2004 I entered into an IVA as I was unable to pay off my debts in full. At the time I was self employed, recently separated and the debts were in the region of £194,000.
Alas, because of the protracted time taken to get the IVA in place I suffered visits from Bailliffs to my shops and the only way to get them to leave without all the stock and equipment was to pay them large sums of cash. The result was the cashflow of the business was crippled before the IVA could protect my livelihood.
Things never recovered and the IVA failed, the businesses closed and I have spent the past year waiting for one of my creditors to petition for my bankruptcy. This has still not happened. As part of my second ex wifes divorce, she has started financial settlement proceedings and it was during this process that I worked out my current debt level to be around £235,000.
The only assetts I have are a repossessed house with approx £90,000 equity (owned with second ex wife jointly), a jointly owned property with my first ex wife with approximately £50,000 equity and a couple of endowment policies linked to the latter property.
My debts mostly consist of loans and credit cards, but in addition I have rent on the shops, business council tax, VAT, PAYE, and trade suppliers to pay back.
I assume bankruptcy is my only option but I have a few questions.
How long after I fill in the forms and return them does it take to be made bankrupt?
What assets other than the above will the official receiver be looking to seize?
Will it include general household items?
I live with a new partner and we are not married. Are her assets at risk?
I understand that "surplus income" is claimed by the official receiver but what living expenses are taken into account? (I'm currently unemployed and am concerned that working could make me worse off when benefits etc are taken into account)
Will my partners income be taken into account when arriving at surplus income figures?
The second property is still occupied by my ex wife and my two daughters aged 15 and 17. Will that property have to be sold after the first 12 months of grace if she cannot buy out my share of the equity?
Any advice or comments would be much appreciated.
David
Forum Answer....
Hi Just Dave,
I am sorry to hear about your difficulties and it is a shame that the IVA option did not deliver resolution for you. Was an Interim Order not put in place by the Insolvency Practitioner that you had been dealing with by the way?
This could have possibly put a stop on the recovery action undertaken by the bailiffs whilst the IVA proposal was being prepared.
From my understanding of the situation you still have assests of £70,000 plus ? (£45,000 share of equity in the first property, £25,000 share of equity in the second property plus some endowments linked to the second property?)
As such an IVA may still be a real option if it is possible to utilise these assets. It would be worth expoloring at least. The IVA could still deal with the debts that you have listed.
In terms of your bankruptcy questions Just Dave, the time period very much depends on how busy the court is between presenting your debtors petition and the court allocating a hearing date. I believe the average time is about 1 month presently although this will vary from court to court.
Because you have material assets then the Official Receiver will most likely appoint a Trustee In Bankruptcy to act as the Supervisor of your estate. A trustee is simply a commercial insolvency practitioner that will be (probably) appointed via a rota system.
I very much doubt that your partners assests will be at risk ( I am assuming that you are not married?)
If you have no surplus income then you will not be expected to make monthly payments into the order.
It is highly possible that the second property will be sold further down the line if the circumstances are as you say yes.
The following video clip links may be of assistance to you Just Dave:
http://myvesta.org.uk/media/video/bankruptcy/index.html
http://myvesta.org.uk/media/video/iva/
I would also suggest that you call Myvesta on the free-phone number to speak with an advisor about your situation. I would be happy to assist myself should you wish to ask for me.
Hope this helps!
Forum Response....
I am somewhat surprised to hear that an IVA may still be an option, maybe if I fill you in with more details it may shed more light on the possibilities.
As I stated in my post, the IVA failed because of the visits from the bailiffs crippling the business cashflow. An interim order was placed but only once the Insolvency Practitioner was satisfied that he had all the details for the IVA proposal. This took some time, partly my fault for struggling to get all the answers, and partly his fault for not acting on the information I supplied and duplicating requests for information he already had. Regardless the IVA was agreed too late and inspite of my best efforts the cashflow dried up and I had to close the shops. The IVA had been agreed in January 2005 but I was unable to make any of the payments required as I was ploughing everything back into buying stock / paying bills to try and save the business. A certificate of non compliance was issued in due course.
My estimate of my current debt level does not allow for any interest that has been charged by my creditors since the IVA failed. My estimate of the amount owed in VAT and to the tax man is just that, an estimate. I do not have completed accounts for my final two years of trading as I was unable to afford the accountants fees. Some other debts such as the final electric bill, rents etc are not known exactly. Small problems perhaps, but these are the ones that take time and hold up an IVA proposal.
The equity in one property (jointly owned with ex wife number 2) which has been repossessed is the subject of a financial settlement case as part of the divorce proceedings and as such the amount of equity actually available may change. My ex being a greedy *!*! is trying to get far more than the 50% that would be fair. The judge will decide I guess in the end.
The equity in the other property is again jointly owned, this time with ex wife number 1. A financial settlement has never been reached with her.
The endowments are joint with ex wife number one. She will try and claim they are rightly hers as she paid contributions since we separated in 1997. However, I paid the mortgage up to October 2004 so I have paid far more over the years than she so 50/50 is more than reasonable division if I can persuade her. (or rather a lawyer can!)
Regarding any possible IVA utilising the equities/endowments, if this was acceptable would they expect me to pay if I started work afterwards? I understand IVA's are usually 5 years so the equities etc couldn't be used to do an instant IVA could they?
In terms of fees associated with IVA's in my current situation I would have no money to pay such fees, especially up front. I know they are built into an IVA in some instances but what if the IVA proposal were to be rejected? My creditors from the previous IVA are unlikely to be favourable given the non compliance. The creditors from the period after the first IVA are an unknown quantity of course.
In terms of bankruptcy I think you missed my point slightly. Whilst I have no income now, if I were to return to gainful employment how much would the Official Receiver take? What do they allow as reasonable living expenses?
Forum Answer....
Hi Just Dave - All of this boils down to the following essentially.
The options that are available to you (be they bankruptcy, IVA or token DMP) ultimately represent a personal choice for you to make.
Bankruptcy certainly is an option (and yes you may well have to undertake an Income Payments Order if you have a surplus income), an IVA (if it is a stronger commercial option than bankruptcy) may also be an option too (regardless of what has happened in the past).
If you wish to call in and speak with an advisor then we will be able to discuss the options within the context of your financial circumstances now, your financial circumstances in the future (as best you can anticipate) and just as importantly - how you as an individual feel about your situation and what you as an individual want to do about the money that is owed to your creditors.
The choice is yours Just Dave and we would be happy to discuss the benefits and implications of these options with you.
Best regards
Sean
During 2004 I entered into an IVA as I was unable to pay off my debts in full. At the time I was self employed, recently separated and the debts were in the region of £194,000.
Alas, because of the protracted time taken to get the IVA in place I suffered visits from Bailliffs to my shops and the only way to get them to leave without all the stock and equipment was to pay them large sums of cash. The result was the cashflow of the business was crippled before the IVA could protect my livelihood.
Things never recovered and the IVA failed, the businesses closed and I have spent the past year waiting for one of my creditors to petition for my bankruptcy. This has still not happened. As part of my second ex wifes divorce, she has started financial settlement proceedings and it was during this process that I worked out my current debt level to be around £235,000.
The only assetts I have are a repossessed house with approx £90,000 equity (owned with second ex wife jointly), a jointly owned property with my first ex wife with approximately £50,000 equity and a couple of endowment policies linked to the latter property.
My debts mostly consist of loans and credit cards, but in addition I have rent on the shops, business council tax, VAT, PAYE, and trade suppliers to pay back.
I assume bankruptcy is my only option but I have a few questions.
How long after I fill in the forms and return them does it take to be made bankrupt?
What assets other than the above will the official receiver be looking to seize?
Will it include general household items?
I live with a new partner and we are not married. Are her assets at risk?
I understand that "surplus income" is claimed by the official receiver but what living expenses are taken into account? (I'm currently unemployed and am concerned that working could make me worse off when benefits etc are taken into account)
Will my partners income be taken into account when arriving at surplus income figures?
The second property is still occupied by my ex wife and my two daughters aged 15 and 17. Will that property have to be sold after the first 12 months of grace if she cannot buy out my share of the equity?
Any advice or comments would be much appreciated.
David
Forum Answer....
Hi Just Dave,
I am sorry to hear about your difficulties and it is a shame that the IVA option did not deliver resolution for you. Was an Interim Order not put in place by the Insolvency Practitioner that you had been dealing with by the way?
This could have possibly put a stop on the recovery action undertaken by the bailiffs whilst the IVA proposal was being prepared.
From my understanding of the situation you still have assests of £70,000 plus ? (£45,000 share of equity in the first property, £25,000 share of equity in the second property plus some endowments linked to the second property?)
As such an IVA may still be a real option if it is possible to utilise these assets. It would be worth expoloring at least. The IVA could still deal with the debts that you have listed.
In terms of your bankruptcy questions Just Dave, the time period very much depends on how busy the court is between presenting your debtors petition and the court allocating a hearing date. I believe the average time is about 1 month presently although this will vary from court to court.
Because you have material assets then the Official Receiver will most likely appoint a Trustee In Bankruptcy to act as the Supervisor of your estate. A trustee is simply a commercial insolvency practitioner that will be (probably) appointed via a rota system.
I very much doubt that your partners assests will be at risk ( I am assuming that you are not married?)
If you have no surplus income then you will not be expected to make monthly payments into the order.
It is highly possible that the second property will be sold further down the line if the circumstances are as you say yes.
The following video clip links may be of assistance to you Just Dave:
http://myvesta.org.uk/media/video/bankruptcy/index.html
http://myvesta.org.uk/media/video/iva/
I would also suggest that you call Myvesta on the free-phone number to speak with an advisor about your situation. I would be happy to assist myself should you wish to ask for me.
Hope this helps!
Forum Response....
I am somewhat surprised to hear that an IVA may still be an option, maybe if I fill you in with more details it may shed more light on the possibilities.
As I stated in my post, the IVA failed because of the visits from the bailiffs crippling the business cashflow. An interim order was placed but only once the Insolvency Practitioner was satisfied that he had all the details for the IVA proposal. This took some time, partly my fault for struggling to get all the answers, and partly his fault for not acting on the information I supplied and duplicating requests for information he already had. Regardless the IVA was agreed too late and inspite of my best efforts the cashflow dried up and I had to close the shops. The IVA had been agreed in January 2005 but I was unable to make any of the payments required as I was ploughing everything back into buying stock / paying bills to try and save the business. A certificate of non compliance was issued in due course.
My estimate of my current debt level does not allow for any interest that has been charged by my creditors since the IVA failed. My estimate of the amount owed in VAT and to the tax man is just that, an estimate. I do not have completed accounts for my final two years of trading as I was unable to afford the accountants fees. Some other debts such as the final electric bill, rents etc are not known exactly. Small problems perhaps, but these are the ones that take time and hold up an IVA proposal.
The equity in one property (jointly owned with ex wife number 2) which has been repossessed is the subject of a financial settlement case as part of the divorce proceedings and as such the amount of equity actually available may change. My ex being a greedy *!*! is trying to get far more than the 50% that would be fair. The judge will decide I guess in the end.
The equity in the other property is again jointly owned, this time with ex wife number 1. A financial settlement has never been reached with her.
The endowments are joint with ex wife number one. She will try and claim they are rightly hers as she paid contributions since we separated in 1997. However, I paid the mortgage up to October 2004 so I have paid far more over the years than she so 50/50 is more than reasonable division if I can persuade her. (or rather a lawyer can!)
Regarding any possible IVA utilising the equities/endowments, if this was acceptable would they expect me to pay if I started work afterwards? I understand IVA's are usually 5 years so the equities etc couldn't be used to do an instant IVA could they?
In terms of fees associated with IVA's in my current situation I would have no money to pay such fees, especially up front. I know they are built into an IVA in some instances but what if the IVA proposal were to be rejected? My creditors from the previous IVA are unlikely to be favourable given the non compliance. The creditors from the period after the first IVA are an unknown quantity of course.
In terms of bankruptcy I think you missed my point slightly. Whilst I have no income now, if I were to return to gainful employment how much would the Official Receiver take? What do they allow as reasonable living expenses?
Forum Answer....
Hi Just Dave - All of this boils down to the following essentially.
The options that are available to you (be they bankruptcy, IVA or token DMP) ultimately represent a personal choice for you to make.
Bankruptcy certainly is an option (and yes you may well have to undertake an Income Payments Order if you have a surplus income), an IVA (if it is a stronger commercial option than bankruptcy) may also be an option too (regardless of what has happened in the past).
If you wish to call in and speak with an advisor then we will be able to discuss the options within the context of your financial circumstances now, your financial circumstances in the future (as best you can anticipate) and just as importantly - how you as an individual feel about your situation and what you as an individual want to do about the money that is owed to your creditors.
The choice is yours Just Dave and we would be happy to discuss the benefits and implications of these options with you.
Best regards
Sean
posted by Your Friends @ Myvesta.org.uk at
2/18/2006 10:41:00 pm
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