# UK I.V.A. Vs. UK Bankruptcy



## Reacher (5 Aug 2013)

Planning on moving to the UK to discharge of just over €1M in personal debts, mainly property related. I sought advice about UK Bankruptcy and was advised to go the I.V.A ( Individual Voluntary Arrangement ) route first as according to my advice it's a better option than bankruptcy and can be sorted out in 3 or 4 months.  - Has anyone any experience of this? I have read elsewhere that an IVA can last 3, 5 or even 7 years!


----------



## Steve Thatcher (5 Aug 2013)

Reacher said:


> Planning on moving to the UK to discharge of just over €1M in personal debts, mainly property related. I sought advice about UK Bankruptcy and was advised to go the I.V.A ( Individual Voluntary Arrangement ) route first as according to my advice it's a better option than bankruptcy and can be sorted out in 3 or 4 months.  - Has anyone any experience of this? I have read elsewhere that an IVA can last 3, 5 or even 7 years!



If you could tell me who you spoke to I cab tell you if they have an interest in selling you an IVA.
First how long will you be in the UK
Second, the IVA will last 5 years.
Third it will mean payments of all your disposable income.
Fourth, I know a few of these which have been proposed. Creditors in Ireland need to agree the terms and from what I can gather, they are not generally approved.

It is only better if you are desperate to avoid bankruptcy. I have to say that for €1m what ever you offer as a payment will achieve almost no dividend for your creditors and what you pay will probably all be taken as fees by those handling your arrangement. Perhaps this was why you were advised to do it.

Steve Thatcher
www.stevethatcher.ie


----------



## Brendan Burgess (5 Aug 2013)

Hi Reacher

I have always wondered why people would go for a 5 year IVA, when they can go for bankruptcy and be out a year later. 

It's probably worth setting out your information in the Case Study format,Standard Format for unsustainable mortgage Case Studies

A PIA in Ireland could allow you to keep your home. However, if you are free to travel to the UK, you may well be better off going to the UK.


----------



## Cantalia (5 Aug 2013)

Why do you say an IVA lasts 5 years? From my own online research I have read that there is the option of paying a lump sum, if you had one??


----------



## Steve Thatcher (5 Aug 2013)

Cantalia said:


> Why do you say an IVA lasts 5 years? From my own online research I have read that there is the option of paying a lump sum, if you had one??




They are exceptionally rare. And in any case off the OP had a lump sum he would be better staying in Ireland and offering it. Coming to UK and doing an IVA on a lump sum simply takes a large chunk of the lump sum out as fees.
He could do a PIA in ireland with that sum in due course.

Steve Thatcher
www.stevethatcher.ie


----------



## Cantalia (5 Aug 2013)

But is a PIA longer in Ireland than an IVA in UK?


----------



## Steve Thatcher (5 Aug 2013)

Cantalia said:


> But is a PIA longer in Ireland than an IVA in UK?



Probably,if it is not a lump sum. You raised the lump sum point which is why I then raised the PIA at home. All of this begs the Q, that if you live in the Uk or can move why you engage in any other solution other than bankruptcy.

Steve Thatcher


----------



## Brendan Burgess (5 Aug 2013)

Cantalia

Who has this lump sum? Is it the debtor or is it a friend of the debtor willing to give it to him? 

If it's their own lump sum, they should be paying their creditors with it anyway. 

If it can be introduced as part of a deal, then maybe they would be better off trying for a voluntary arrangement in Ireland. They might be able to avoid a PIA, DSA or bankruptcy altogether.


----------



## Cantalia (6 Aug 2013)

Brendan from what I understand, and there is considerable info online via the UK courts services, lump sum IVAs whilst hard to get are preferable for many business people or self employed people who have to start again and get back in business of some sort to make a living. It seems it is usually a family member who will front up the lump sum, it is of course not the indebted. The main difference or advantage that I have discerned is that once the IVA is accepted and processed, maybe a month after COMI is established, then the matter is completely finished unlike bankruptcy where you wait out a subsequent 12 month period.
What is not clear to me is the extent to which an IVA affects your credit rating. Is it as extensive as a bankruptcy. But obviously if for the next decade you don't have to tick the "yes" box to the Have you ever been bankrupt? question, then life is a bit easier.
Does anyone else have any info or perspective on this?


----------



## Cantalia (6 Aug 2013)

Steve, what does OP stand for? I think Steve is right on the  basic point of why throw good money after bad and if you can do the COMI then go and get your bankruptcy order. But having read about it I can see the value for a certain type of debtor in getting an IVA. Also from what I have figured out, especially reading this website, Irish people will probably have spent four or five years being tortured over debt before actually measuring out the difference between the uk and here and then actually making the move to go. Once the decision is actually made for such drastic action  I think there is little appetite for giving the banks anymore of anyone's money. Nevertheless it's good to discuss the option.


----------



## Steve Thatcher (6 Aug 2013)

OP is original poster


----------



## Reacher (6 Aug 2013)

It's probably worth setting out your information in the Case Study format,Standard Format for unsustainable mortgage Case Studies[/URL]

 Thanks for the replies lads - This probably reads a bit different to some but here goes: 

Personal and income details
Net (i.e. after tax) Income self: 30,000 p.a PAYE
Net income partner/spouse: Spouse Self Employed – 60,000 nett approx
number of children: 0
Amount of child benefit received : 0
Amount of Mortgage Interest Supplement received: 0
Home loan
Lender: Irish Bank
Amount outstanding: 300,000
Value of home: 150,000
Interest rate: variable rate 
Monthly repayment: 1,300
Amount in arrears : 15,000

Summary of discussions and agreements with the bank – n/a

Investment property - 
Lender: Irish Bank
Amount outstanding: 650,000
Value of home:50,000
Interest rate: variable
Monthly repayment : 4,000
Amount in arrears 100,000
Monthly rent received : 0
Lender: Spanish Bank
Amount outstanding: 180,000
Value of home:75,000
Interest rate: variable
Monthly repayment : 900
Amount in arrears: 45,000 ( Incl. legal costs )
Monthly rent received : 0

Other loans and creditors - delete those which don't apply to you
Overdraft
Credit Card – € 7,000
Credit Union  Loan of €70,000 
Car loan e.g. 45,000
Personal Guarantees to business: €300,000

Other savings and investments : none


How important is retaining the family home to you? 
Which of the following best describes your situation?

I don't care about keeping the family home. 



Any other relevant information –  I am willing to travel – spouse is jointly and severally involved in all of this but  would prefer not to travel and not to disrupt current business


What is your preferred realistic outcome? 
To maintain our Marriage, our Health and hopefully be debt free in 12 – 18 months


----------



## Reacher (6 Aug 2013)

@ Steve - thanks for the reply - sorry I should have clarified  - yes the proposal is for a white knight to make an offer of a lump sum IVA after establishing UK COMI for 3- 4 months  and the advice is that generally speaking no-one turns up at the creditors meeting except for a creditor who votes in favour and the other creditors have a 30 day period to appeal the decision but with the threat of bankruptcy the advise is that they accept it and the deal is done and if it's not then the fallback position is the bankruptcy and by that stage the COMI has already been established so you get two shots at the prize. As for naming the advisor  - I'd rather not publish that on this forum - but are you saying that there are insolvency practitioners who shop this idea as a way of getting bigger fees ?


----------



## Reacher (6 Aug 2013)

Cantalia said:


> Brendan from what I understand, and there is considerable info online via the UK courts services, lump sum IVAs whilst hard to get are preferable for many business people or self employed people who have to start again and get back in business of some sort to make a living. It seems it is usually a family member who will front up the lump sum, it is of course not the indebted. The main difference or advantage that I have discerned is that once the IVA is accepted and processed, maybe a month after COMI is established, then the matter is completely finished unlike bankruptcy where you wait out a subsequent 12 month period.



Cantalia - you're spot on there - that is exactly the set of circumstances we have and the advice that has been given to us - but it relies heavily on the current status quo which according to the advice we have is that the bulk of creditors ie. banks - don't know how / don't want to respond and the vote is passed by a creditor who favours the plan and who does turn up at the creditors meeting


----------



## Brendan Burgess (6 Aug 2013)

Reacher said:


> I This probably reads a bit different to some but here goes:
> 
> ...
> 
> ...



That is a bit different ok. 

Your wife's self-employment is a bit of a problem to travelling. 

What is the status of the foreign bank under Irish and UK bankruptcy laws? Presumably it's the same as any  other creditor.


----------



## Reacher (6 Aug 2013)

Steve Thatcher said:


> Probably,if it is not a lump sum. You raised the lump sum point which is why I then raised the PIA at home. All of this begs the Q, that if you live in the Uk or can move why you engage in any other solution other than bankruptcy.
> 
> Steve Thatcher



@ Steve - this lump sum IVA is being sold to us as a quick, clean alternative to bankruptcy with less disruption to our existing business, less time spent abroad, less scrutiny of all our assets ( past and present ) , less stigma/credit/commercial issues in the future and wit the insurance policy of having established a COMI that you can go straight to bankruptcy if unsuccesful

What's not clear to me is whether or not the whole thing is a fairytale as there seems be little info or discussion about it ?


----------



## Reacher (6 Aug 2013)

Brendan Burgess said:


> That is a bit different ok.
> 
> Your wife's self-employment is a bit of a problem to travelling.
> 
> What is the status of the foreign bank under Irish and UK bankruptcy laws? Presumably it's the same as any  other creditor.



Yes my wife has been advised to establish a company in ireland and get paid as an employee into a uk bank account and establish comi in uk - the foreign bank's debt i have been advised is treated as any other creditor thanks.


----------



## Cantalia (7 Aug 2013)

Reacher, can you accept private messages on this forum. I tried to send you one but it didn't allow it?


----------



## Cantalia (7 Aug 2013)

Also Reacher from what I can see online IVA's are routinely struck out. Shane Filan of west life being a well known example. Furthermore the conditions for applications state clearly that the COMI requirement is the exact same as for bankruptcy so I am a al loss as to where you get the idea you can apply after three or four months. That is simply incorrect.
If it sounds too simple it probably is. Never simply believe what you are told. Do your own preliminary research from source, the primary source as opposed to being sold a service. If there is one thing most of us on this site should have learned by now its not to be blindly sold a product (mortgage) or a service.


----------



## Reacher (7 Aug 2013)

Cantalia said:


> Reacher, can you accept private messages on this forum. I tried to send you one but it didn't allow it?



Cantalia - I have just recently joined and I don't seem to have a PM function - i keep getting this message in my user CP :

Reacher, you do not have permission to access this page. This could be due to one of several reasons:

Your user account may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation


----------



## Jim Stafford (15 Aug 2013)

Any competent UK Insolvency Practitioner will strongly consider advising a client to do an IVA.  We have had a number of clients who have been successful with UK IVA applications.  We have had clients who have done "lump sum" schemes and "income type" schemes. 

Having said the above, there is now much less reason for Irish people to travel to the UK to do IVA's given that the Personal Insolvency Act 2012 is finally effective, and that they may be able to do PIAs or DSAs.

Jim Stafford


----------

