| Author |
 Topic  |
|
debtinfo
forum expert
2826 Posts |
 Posted - 29 December 2009 : 10:58:53
|
| IVA's have been around for a long time, and their use has increased dramatically over the last few years (as has bankruptcy). There has never been more business out their for IVA companies. Bankruptcy was intentionaly made easier in 2004. The rules are proposed by the secretary of state (with the help of the IS) and voted for in parliment. In 2004 a decision was made to ease the restrictions with the intention of positioning the UK as a place where innovative people can take risks and be given a second chance. It was designed to be less punitive and so i do not think they will change the rules that much now. One thing that they are doing is attemting to remove ED although they are again trying remove the courts from the making of the bankruptcy order in order to remove some of the stigma of bankruptcy |
 |
|
|
Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 29 December 2009 : 15:20:16
|
Playing devil's advocate here - surely an IVA should be a more attractive proposition than BR, so maybe it is time that something was changed.
I personally think that ED should be abolished - when you think about the amount of money that is written off, surely being BR for 12 months is just a small inconvenience?
The other option would be for ED only to be available for people who have an IPA. That would give the OR a full 12 months to be able to obtain an IPA.
I know these won't be popular opinions and I'm not saying things go back to how they were, but something needs to be done to prevent BR from appearing to be the easy option.
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 29 December 2009 : 15:37:17
|
very much so skippy, in my opinion (again might not be popular)there should be more of a decision between people who are slightly more at fault for their own bankruptcy and ones that genuinely are not the fault of the bankrupt. at the moment you have do do something fairly bad get to where the BRO's kick in.
maybe a longer initial period of say 2 years, keeping ED for ones that are genuinly deserving. Don't think it will happen though. Although if we have a change of government with a different ethos, who knows |
|
|
|
Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 29 December 2009 : 16:05:55
|
My BR was my own fault - my tastes were much to expensive (and still are if I'm honest, I don't think that will ever change!) so I got into debt. I'm paying into an IPA and didn't get ED and it didn't hurt me to be BR for 12 months.
I can't say I will never get into debt again as who knows what's around the corner, but if I do it won't be my own fault again However I can't help feeling that with the way things are at the moment some people will think it's easy and won't learn a lesson.
I look on other forums, and it amazes me the amount of people who actually boast about how easy their BR was and how they are screwing the system.
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 29 December 2009 : 16:17:49
|
| of course the other side is the availability of credit. Ive seen cases where someone had 15 credit cards. There should be no way that someone is able to get 15 credit cards. They should have a rule where a person may only have 1 personal credit card at a time, ie if you want to go with a different bank you should have to transfer your balance over to the new one and the old one is deactivated automatically |
|
|
|
Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 29 December 2009 : 16:21:31
|
Good point. I'm trying to think how many I had and it was probably heading towards double figures (although only a few of them had balances on them) but I could easily have run them up. The stupid thing was I was always honest about what cards I had when I applied for new ones, and the same with the loans (I had 2), so the banks knew what I had.
I agree that you should be able to only have one credit card, and they need to cap the amount you can have on that as well - I remember applying for one and it came with a 10k limit, which was over half my salary at the time!
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 29 December 2009 : 16:27:10
|
| The reason i would go down that route is that the bank then truly check how much their customers owe. Then if the bank lets the customer get in a position where they cannot afford to repay, it is the banks own fault if they lose out by the customer going bankrupt |
|
|
|
Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 29 December 2009 : 16:34:05
|
Which is why they'll never do it - since when have the banks taken responsibility for anything?!?!
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 29 December 2009 : 16:36:14
|
| very true |
|
|
|
John
New Member
United Kingdom
73 Posts |
Posted - 29 December 2009 : 17:27:35
|
Just to continue with the theme of potentially unpopular opinions posted, and to demonstrate the democratic nature of the site.
May I respectfully suggest that on pretty much every issue including IVA v BR, ED, levels of apparent irresponsibility in respect of indebtedness and subsequent related terms of BR restriction I couldn't agree less.
I respect your opinions of course, and bow to both your knowledge and willingness to help those in difficulty. I post just to provide a balance for the many reading this thread. We have of course seen many such threads in the past which occasionally turn into personal debates which I'm sure none of us wishes to be drawn into.
So no further comment from me other than to say some may make light of the system and some may even gloat. For some people it's their way of coping with the fact that BR is never, ever an easy option.
John White
Independent Debt Consultant
Specialising in Bankruptcy |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 29 December 2009 : 17:33:37
|
| no prob john, all opinions welcome |
|
|
|
Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 29 December 2009 : 18:29:56
|
I agree with Debtinfo, all opinions welcome and no-one wants this to turn into a personal debate.
John, can I ask one question? You appear to be very anti IVA, have you had a bad experience of an IVA? As a debt consultant I presume that although you specialise in BR you would recommend an IVA if it was right for the person concerned. As I said I'm not trying to turn it into a personal debate, just being curious!
I've had experience of both an IVA and BR and I'm not for or against either, it's what suits a particular set of circumstances.
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
Edited by - Skippy on 29 December 2009 18:31:11 |
|
|
|
John
New Member
United Kingdom
73 Posts |
Posted - 30 December 2009 : 11:54:21
|
Hi Skippy
I believe wholeheartedly that there is a place for IVA. As you know they have been around for over 20 years but have only come to prevelance in more recent years. When they were introduced for many it was the right way to go as the option of Bankruptcy under the old rules (pre 01/04/2004) was a very, very bitter pill to swallow. A life sentence effectively and one which had a dire impact on unemployment. It has long been a fact that over 25% of new businesses fail in their first year and a similar number fail eventually. When the entrepenuers that took the risk are now disqualified for life from ever trying again the economy suffers and the unemployment figures stay high. Hence the 2002 Enterprise Act.
Where I think the Insolvency Service missed an opportunity is the IVA guide lines should have been revised simultaneously. Expenditure allowances in IVA, and the percentage disposable incomes retained by the insolvent should have been brought in line with the new Bankruptcy guide lines.
In this way there is a real option for everyone to choose their preferred path on a level playing field. As it stands, and in my opinion, bankruptcy will be the preferred option most of the time for what I believe are strong and valid reasons and, fundamentally, for me, it boils down to this....
BEAR WITH IT!!! BUT HERE GOES....
Two families, situations are identical and the father's debt in both cases is £50K and the incomes are the same.
Father 1 enters into an IVA, thus has a lower allowance of expenditure than father 2 who chooses bankruptcy. Likewise father 1 is allowed no disposable income and this situation will remain for 5 years(normally - the foremost reason for IVA failure).
Father 1 will pay £20K (40p in th £) or more over the next 5 years plus IP fees of around £5K.
Father 2 has a higher expenditure allowance in bankruptcy, a potential IPA period of 3 years max (not 5 years), and a minimum 30% of his disposable income retained in the household for that 3 years.
Father 1 has paid £416 per month.
Total cost to father 1 = £25,000.
Father 2 has the same income but, in bankruptcy has a higher expenditure allowance of, let's say, £150 per month. So his DI is deemed to be £256 per month of which 50% (£128) will be claimed in a 3 year IPA.
Cost to father 2 then = £4,608.
Father 1, over 5 years, has, by comparison paid £20,392 more than father 2.
PHEW! GOT THERE IN THE END!!!
And the point is this....
Who has really paid that £20,392?
The father?
Or the wife and children who have suffered the consequences of that choice when entirely without fault?
Or all the family?
The wife chooses her husband, the children do not so why should their lives be any different to the lives of father 2's children?
We are all different and view life differently, thank the Lord. But my advice, unless BR threatens a career, then opt for it every time. Not for your own sake, but for the sake of those around you.
John White
Independent Debt Consultant
Specialising in Bankruptcy |
|
|
|
Skippy
forum expert
United Kingdom
3290 Posts |
Posted - 30 December 2009 : 12:40:46
|
What if they have a house? Surely Father 2 would also then have to consider an IVA? If it was my OH I would rather we struggled for 5 years in an IVA if it meant we could keep our home.
I'm not being deliberately argumentative, just playing devil's advocate!
Tomorrow is a mystery, yesterday is history, today is the present, a gift to make the most of.
View my blog at http://skippy13.blogs.bankruptcyhelp.org.uk/
30 IPA payments made, 6 to go - the end is in sight! |
|
|
|
debtinfo
forum expert
2826 Posts |
Posted - 30 December 2009 : 13:00:06
|
I think it is worth pointing out for people who think that people are jumping for bankruptcy because they say it is a lot easier than IVA's that the last 3 years has been the highest percentage of insolvencies for IVA's at 35-40%. In the early 2000's it was about 25% and in the 90's 15-20%
so apart from last year (with a slight dip, probably because of low property prices) since the enterprise act came in there has been more people choosing IVA's rather than bankruptcy
here is the link to the stats
http://www.insolvency.gov.uk/otherinformation/statistics/historicdata/IndividualInsolvencies.xls |
Edited by - debtinfo on 30 December 2009 13:01:09 |
|
|
|
Topic |
|
How much should I tell the OR?
