Originally Posted by amikolaichek:
“I think it means that, if, say, she owes a creditor £100 for example, she has to pay back the poor devil 100 x 24.83 pence, which means £24.83. If it's an IVA it lasts five years and there'll be a payment plan as to how she pays it - either monthly from her earnings, or in lump sum when she sells her house. So in essence, her creditors will get back (hopefully) a little less than a quarter of what she actually owes. THIS, so far as I know, is how an IVA works. An 'insolvency practitioner' will be involved and keep a very beady eye on all her finances.
If she's bankrupt, then I don't really know how that works - my knowledge of IVAs comes from a close friend who was subject to one. In an IVA, 75 per cent of the creditors have to agree to the arrangement, and the remaining 25 per cent who don't agree - well, tough, they have to go along with it. BUT, knowing HMRC, I'm not sure how they fit in with this - in my experience, they want back ever single £ of back, unpaid tax.
I imagine that other DSs here will be far more knowledgeable. So far as I remember, way back on this thread someone posted a link to details of Jones and her insolvency hearing or something, from official records, and it did look like an IVA, but I may be incorrect.”
If you are declared bankrupt you are required to do a statement of your income/expenditure for the official receiver. You can 'keep' money that will go towards paying for essentials like rent, utilities, travel to work, etc. Any surplus you have will then go towards paying your creditors for a fixed amount of time but is set on a sliding scale. So if you earn £1000 a month and spend £800 on essentials the OR might rule that you then have to pay 50% of your surplus for a period of 3 yrs. Of course if you take home £10k a month and your essential outgoings are £1k the OR would take 90% of the surplus.
This is why rich people still seem to have flashy lives after bankruptcy - even when the OR has taken their cut they still have a couple of thousand left each month!
If you have assets like a car it would depend on your need for them and the worth. If you have an old banger that you need to get to work then you would probably be allowed to keep it, but if you have a flashy top of the range car and work from home then its likely to be taken.