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IVA or Bankrupt?

  • Horlicks1
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21 Jun 12 #338262 by Horlicks1
Topic started by Horlicks1
Hi All,

As like many, my OH has got into serious debt following his divorce. We are currently having his Consent Order varied but unfortunately he''s sinking fast. We''ve spoken to various people CAB etc, reduced what we can but we''ve now made a decision to approach the courts to make him bankrupt. We were wondering if anyone could help us with the following questions?

1 - Is there anyway we can work out what will be granted IVA or full bankruptcy

2 - If they say IVA which we don''t want, can we refuse the offer and struggle on? (he feels he''d be no better off and will have just gained a big negative mark)

3 - Where will the bankruptcy be registered, he''s only moved in with me in the last 3 months and I really dont want that on my address, can we have it registered else where?

Any help really appreciated x

  • LittleMrMike
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22 Jun 12 #338280 by LittleMrMike
Reply from LittleMrMike
I have no wish to see unsympathetic but this is a divorce site. I can''t answer your questions in their entirety, and I certainly can''t help you as to whether you should go for an IVA or bankruptcy without a lot of further information about the nature of your debts and assets.
However :
1. You mention a consent order being varied. I would like some clarification of this please.
Is there an order or isn''t there ?
Is the situation that you are negotiating a consent order but no order has yet been made ?
Or is there actually an order sealed by the Court ?
I ask this question because, if there is no order in force, and your OH becomes bankrupt, it would have a very definite effect on the final outcome. From the point of view of a spouse of a bankrupt, a bankruptcy order can have all sorts of consequences, and if there is a risk of bankruptcy, then the name of the game can often be to get the order sealed by the Court before the bankruptcy order takes effect.
But if the order has already been made, then it can''t normally be varied and if either spouse goes bankrupt, then the order will normally bind the trustee.
People on this site often say they have a consent order when they haven''t. Until the Court has rubber stamped the order, it''s just a draft. The fact that you are talking about amendment suggests to me that there is no order yet, you are just negotiating one.
2. If you are in debt, there are many ways of dealing with it, ranging from a relatively informal arrangement to full bankruptcy. From the point of view of the debtor, it is possible that a bankruptcy could be imposed on him by his creditors. But in many cases there is simply little point in the creditor doing this. If there are no assets, making the debtor bankrupt will not create any.
3. So at the moment, it may be that your OH has a choice. He may elect to go bankrupt, or he may wish to go for an IVA. At this stage the decision is probably for your OH to make, but it could be taken out of his hands if the creditors make him bankrupt. It is absolutely essential that anyone contemplating bankruptcy should consider the possible consequences. Some of these, though rare, can be very serious. But whatever you do, your chances of getting credit will be rather problematic for some time.
4. This kind of thing is way beyond the competence of your average CAB adviser. The bigger bureaux have specialists, who do debt and nothing else. But sorry, this is a divorce site. To advise you properly calls for an in depth examination of your financial situation which, on a site like this, can''t be done. It also needs software programs which I, as a private individual, do not have. I used to know how to use them, but not any more !
5. My advice is, first of all go the the website of the Bankruptcy Association and read that. Secondly, I would try the National Debt Helpline.

  • Horlicks1
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22 Jun 12 #338463 by Horlicks1
Reply from Horlicks1

Thanks for your response, apologies for the post, I wrongly assumed that because the the debt is caused through the divorce and you have a section headed ''debt and bankruptcy'' it would be OK to see if others who are probably in the same situ or have been may have been able to shed a little light. We have called everyone you''ve suggested we''ve filled out all the on line tests and NO ONE, not even the National Debt line have followed through and called us back. You were right about CAB, but what they are doing is taking specialist advice to try and help us. I just thought given how helpful this site has been previously, it might be worth posting. We have also looked at all the negatives and unfortunately have no choice. With regards to the consent order, there is one in place with the rubber stamp. It was agreed a year ago, however the amount to be paid was £1600 a month for 2 kids including £400 spouse maintenance, as I''m sure you will agree that is a very high figure and now a figure he can not honour with the debts he has, we have there for requested the courts review the order and agree a lesser figure be paid. That''s going through and looks likely having had our first meeting.
Thanks for taking the time to respond to us.

  • LittleMrMike
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23 Jun 12 #338540 by LittleMrMike
Reply from LittleMrMike
Well, at least I''m glad to see the CAB is helping. It''s what I would expect of them, I suppose.

Usually the decision as to whether to go bankrupt involves a review of what you might stand to lose. But it can be a very personal decision.

My own experience of debt advising was largely with people whose credit cards had got a bit on top of them. It''s relatively easy to put all the details of the '' client '' into the computer, press a button and hey presto, a nice neat financial plan emerges.

But '' my '' bureau had a specialist so we never got the juicy bits.

Any way you look at it, it is not an easy decision and inevitably involves cold turkey for some time. Good luck.


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