Your IVA seemed like the perfect solution when it began, but now it may be failing.
Will you be back to square one and have difficult creditors to deal with? Or could you even be made bankrupt?
First, there may be ways to rescue your IVA
An IVA failing may not be a disaster, for some people there are better options! That’s what the rest of this article looks at.
But don’t assume nothing can be done. Unless you want your IVA to fail, it is always best to talk to your IVA firm and ask what options there are.
When you just have a temporary problem, there can be ways to get through it and get you IVA back on track. Sometimes it may be possible to get the IVA completed without any more payments, so your debts are written off, not have it failed – this is more likely later in an IVA. Read Can’t afford your IVA payments? for more details.
If your IVA firm is saying you have broken some rules (the legal term they may use is “in breach of”) and you think this is wrong, unfair or you want to propose a solution, put in a complaint before your IVA is actually failed. Your local Citizens Advice may be able to help.
What happens when an IVA fails
When your IVA fails, your IVA firm will send you:
- a letter of termination and
- a failure report that lists your creditors, what you owed them at the start of the IVA and how much has been paid to them in your IVA. (If your IVA is failing in the first year, this may be little or even nothing as your first payments will have been taken to pay some of the IVA fees.)
Keep these! Even if you are fed up and want to forget about it, at some point you may decide to take action or you may be contacted by a creditor.
Your IVA firm will tell your creditors and the Insolvency Service that your IVA has failed. The Insolvency Service will mark your IVA on the Insolvency Register as having failed. After three months it will be deleted from the Register.
The IVA will remain on your credit record until six years from the date it started, so your credit score will not improve.
If you make any PPI claims, it is very likely that the refunds will be sent to your old IVA firm, not to you.
Will you be made bankrupt?
Most IVAs will have a clause that allows the IVA firm or one of your creditors to make you bankrupt if you break the IVA agreement.
It is rare for your IVA firm to do this as they will have to pay the fee to petition for your bankruptcy. Even if you have a house with a lot of equity, it is unusual. It may happen if you have had a large redundancy payout or an inheritance that you didn’t declare.
Most commercial creditors would not make you bankrupt unless you have a house with a lot of equity. This would have to be a lot more than your total debts as the costs of bankruptcy are very high (tens of thousands) and have to be paid first before creditors get anything. Sometimes HMRC will make someone bankrupt even if they won’t get any money from it.
Will you be hassled by creditors?
This rarely happens immediately but after a few months it may start.
These cases are all very individual – what happens depends on many things including why your IVA failed, whether you have a house with equity, how large a debt is, what sort of debt it is and who the creditor/debt collector is.
What you can do after your IVA has failed
You have five possible options when an IVA has failed:
- you can choose another form of insolvency – a Debt Relief Order or bankruptcy.
- you can do nothing and deal with any debts you are contacted about.
- you can set up payment arrangements (or a DMP) for all the debts in your IVA.
- you can try to settle some of the debts with full & final settlement offers if you have a lump sum of money.
- you can try to set up another IVA.
Looking at these in detail:
1. Choose bankruptcy or a DRO
This is top of the list because if you are renting it is very likely to be your best option.
A Debt Relief Order (DRO) or bankruptcy soon after the IVA failure resolve your debt problems finally. No hassle from creditors. No worry about old debts reappearing after a few years or court or bailiffs.
Some people should never have been sold an IVA in the first place – a DRO or bankruptcy would have been much better solutions instead of an IVA.
Forget everything your IVA firm said at the start about an IVA being better for you than a DRO or bankruptcy – they were wrong about the IVA and they may well have been wrong about DROs and bankruptcy!
And the rules for DROs changed in June 2021 and are changing again in 2024, so a lot more people can qualify for one. For example, the total of debts you are allowed is being increased to £50,000. If your debts are under this and you are renting and you have little spare income, a DRO may be a very good choice for you as you don’t have to make any monthly payments, with your debts being written off at the end of a year. And from April 2024, there won’t be any up front fee in a DRO at all.
2. Deal with debts as you are contacted about them
Here is what happened to one person:
My IVA failed half way through. After it ended one creditor got a CCJ and I arranged payments with another debt collector. I cleared both of those debts. My credit record was then clear after 6 years when the CCJ disappeared. I never heard from the smaller debts in my IVA.
The advantage of doing this is that some debts may never contact you.
Also if you are contacted by a debt collector about a loan, credit card or catalogue that you opened many years before, it is worth asking the debt collector to produce the CCA agreement – if they can’t, it is unenforceable in court and you do not need to pay it. See this National Debtline factsheet for details.
The huge disadvantage is that some creditors may leave it several years before contacting you. At that point your credit record may be back to looking good and you think it’s all gone away. The debts in your IVA cannot become statute barred until at least 6 years after your IVA has failed.
Going for this option may minimise what you repay but it is a stressful route not knowing when a creditor will contact you and it may also prolong the time until everything is finally sorted.
If you are contacted by some large debts after four or five years you may have to go bankrupt then. It would have been much better to have gritted your teeth and gone bankrupt straight away.
3. Set up payment arrangements for the IVA debts
You can contact the creditors individually and set up payment arrangements or go to a DMP firm such as StepChange and ask them to set up a DMP.
The advantage of doing this is you are taking control of the situation and it should reduce or eliminate any hassle from creditors.
The disadvantage is that you have to repay all the debts in full. If this is easy for you, then it would probably have been better to try to resolve your IVA problems and complete that. If it’s hard, or you are only making token payments so the debts will never be gone, you should look seriously at your insolvency options first, before deciding to do this.
4. Make full & final settlement offers on some or all of the IVA debts
Most people who have had an IVA fail don’t have much cash lying around to make settlement offers.
But if a relative could help you with some money, this could be an option. Read this Guide to F&Fs. Also if some of the accounts were loans, credit cards or catalogues that are quite old and which have been sold to a debt collector, read Ask for a CCA before making settlement offers.
5. Set up another IVA
Once bitten, twice shy?
If you have assets to protect and you can afford reasonable monthly payments to your debts, it may be worth talking to another IVA firm to see if they think a second IVA could work. Expect to be asked a lot of questions about why your first IVA failed! If you don’t have assets to protect, look at a DRO or bankruptcy instead – they are simpler and they don’t go wrong.
If you want to try this, talk to one of the smaller IVA firms where you will get more individual consideration.
Best to decide what to do, not delay
You may feel battered and bruised after your IVA has failed. The last thing you want is to do is talk to debt advisers or creditors. But it’s usually best to make your mind up what you will do, not just try to ignore the situation. Get some good debt advice as soon as possible and take back control.
Where to get good debt advice
Change from an IVA to a DRO?
Articles about DMPs
Michelle says
Hi, I have been with a DM company since September as I became unexpectedly ill and have to leave my new job. I was in an iva when i was working. I deliberately failed (didnt pay) my iva as I had to claim benefits and vouldnt afford the payments. My new Debt Management people have suggested Bankruptcy, but my criteria fits a DRO, however, I had an Advance at the beginning if my benefits claim and they also overpaid me, so I owe the DWP now aswell! This has taken me just over £20,000, so my DM Company has said I am not eligible for a DRO. However, the DWP have wrote to me saying I am due a higher benefit and backpay, of which they will deduct the Advance and overpayment. I am considering holding off Bankruptcy and waiting to see if that backpay cancels out the money owed to them. Do you think this is the best approach? I have also been awarded PIP now. I have received backpay for tjat from Sep to end if November 2018. It was for £800. Do I need to let the Debt Management company know and should I deduct a month out of it as I dont receive my next PIP payment until end of December. I have car repairs to pay and its Christmas! Thank you.
Sara (Debt Camel) says
I think waiting until your benefits and back pay is sorted is a good idea if this willl only be a couple of months.
No you don’t need to tell the DMP company about the backpay. Car repairs may be urgent? But you may want to keep some of the money for possible bankruptcy fees.
Michelle says
Thank you Sara.
Janet says
If your iva fails can you set up a payment plan with your creditors would they let you do that
Sara (Debt Camel) says
yes you can – that is described as one of your 4 options in the article above. But to be honest it isn’t usually a good option – if you can make good payments then why did your IVA fail? If it’s hard, or you are only making token payments £1 or £5 a month payments then your debts may never be gone. It’s better to look at your other options first.
Does it look as though your IVA will fail? How long has it been going? Are you buying or renting?
Patrick says
If I know my IVA is not working out and I can’t make future payments, can I ask the IP to make me bankrupt? Or will they just fail the IVA and then leave it to the creditor and myself to sort out?
Is there anyway I can have the IP make me bankrupt?
Sara (Debt Camel) says
It is very unusual for an IP to make you bankrupt as it costs them money! Unless they think you have a lot of assets they aren’t going to do this – my guess is if you want to be made bankrupt then you probably don’t have any assets…
If you think bankruptcy is the best option for you (have you talked to a debt adviser about this? that would be a good idea!) then let your IVA fail and stat saving up for those bankruptcy fees. See https://debtcamel.co.uk/help-with-bankruptcy-fees/ for some ideas to help with the fees.
C Harris says
I thought PPI claims were going to IVA company and they weren’t chasing me for payment as they did to start with so I just left it. Then had an opportunity to work abroad did that for a couple of months but the company went into Administration and I am still waiting for a months money from them I had a couple of months out of work at which time IVA company advised me had not made payments for around 2 years and unless the outstanding balance was paid would fail the IVA even though it had gone over the 5 year period. I had no money so could not pay as I was awaiting outstanding pay and had living costs back in UK to pay for along with child maintenance costs etc. As I didn’t pay IVA any more they terminated IVA around Dec 18. I am now getting letters from creditors, I wish I had been able to carry it on as was only £150 per month now if I set up repayments to them likely to be more. Should I go for a DMP or new IVA ??
Sara (Debt Camel) says
That sounds like a mess – the fact PPI payments went to your IVA firm did not replace the payments you should have been making. You should have talked to your IVA firm, not just stopped making payments.
But you are where you are, so what to do now. There is no automatic answer about what is best, it depends on your case.
So could you say something about your situation…
How large are your debts? Including any you have accumulated after the IVA as well as the ones in the IVA.
Do you have a house with equity or any other assets?
How much do you think you could pay to your debts each month eg in an IVA or a DMP?
How old are the debts that were in your IVA – not when did you default, but for credit cards, catalogues and loans when did you open the account?
SG says
I entered into an IVA in January this year with Payplan.
I have debts around £23k ( one being HMRC).
I advised Payplan at the time that I would be changing job in March with the same salary.
My council tax has gone up by £23 a month ( £23 above the figure in my plan) and under new legislation I have to pay 5% of my salary to a pension.
I now have a negative balance of minus £53 a month on my income / expenditure
Payplan are now saying my IVA is not suitable but have offered no alternative solution or comments..
What can I do ?
Sara (Debt Camel) says
are you renting or buying?
S says
Hi
In renting at the moment
Thanks
Sara (Debt Camel) says
Then if Payplan say this IVA is no longer suitable, I think you should ask them if they think you should go bankrupt instead.
This is VERY early in an IVA to be in difficulty – the odds of you being able to get through the next 5 years are not good. over 30% of IVAs fail, and if yours is likely to be one of them it’s probably better to accept that and end it now.
You could choose to opt out of contributing to a pension to help afford the IVA. But if you go bankrupt, those pension contributions would be an allowable expense. It may be you don’t have to pay anything if you go bankrupt – just the high one fee of £680 at the start. If you tell Payplan you want your IVA to fail, you stop making any contributions and save up the bankruptcy fees.
This looks like a poor decision by Payplan to advise an IVA at the start. The pension rise was completely predictable. The council tax rise doesn’t sound large. You could consider putting in a complaint to Payplan and asking them for a refund of the IVA payments you have made so far – that could help towards the bankruptcy fees.
SG says
Hi
Update on this
Payplan asked me to reduce allowances on my expenditure to cover shortfall ( which was already pre agreed)
With my reduced salary, pension payments, increase in utility bills, Payplan are now saying my dispoasbale income has increased to more than the original proposal and live Iva.. ( reduced allowance for shopping, hobbies etc).
Also
They have factored in the child benefit which is in my wife’s name as household income.. my wife doesn’t work so that’s her only income.. my wife also has debts ( including council tax) to which we can not make any payments to because of the mess.
Not sure what is best for us and I don’t feel Payplan give neutral guidance and support
Lyndsey says
My husband and I are on the verge of applying for bankruptcy, but something is telling me to try f&f settlements with our creditors first (although we would only be able to offer around 15%).
We have around £25000 worth of debt between us, pretty evenly split, this comprises of; credit cards, catalogues, PPI claim company fee (I never received the payout but they still require their fee) and a mortgage shortfall of around £4500 (following voluntary repossession in August last year).
We have been in an IVA, but this failed in December last year (following advice not to pay it-as bankruptcy would be our only option after the voluntary repossession anyway).
My hesitation regarding bankruptcy mainly comes from the fact that on paper our joint earnings just about cover our monthly expenditure, however I do receive a student finance maintenance loan (as I am a fulltime student), which, on paper would provide around £700/month, although this isn’t really the case as there are costs involved with being a student-books, parking, travel etc and we find that we don’t really have any spare for ‘luxuries’ like holidays etc.
Ive read conflicting info regarding student finance and whether the OR counts it as income or not etc. I have even been advised not to tell them about it or the bank account that it is paid into, although this doesn’t seem right to me, surely they would need to know about it or would find out anyway….
Sara (Debt Camel) says
“I have even been advised not to tell them about it or the bank account that it is paid into, although this doesn’t seem right to me, surely they would need to know about it or would find out anyway….” I don’t know who said that but it was extremely poor advice and I hope it did not come from a debt adviser!
You have to declare all your bank accounts to the OR. Forgetting an old one you haven’t used for years with £15 in it would not be a big deal. Missing off an account you are using, where you have income coming in, is deliberate deception.
You can try F&Fs as the article above says.
Have you spoken to a debt adviser? They will be able to look at whether you might have to pay an IPA if you go bankrupt. Most students wouldn’t, but you need advice on your individual situation not generalities.
Lyndsey says
Hi Sara
Thank you for the reply.
I thought I had been speaking to a trusted ‘debt solutions advisor’ but it was him that said not to mention the bank account etc…. and we were paying for this kind of advice.
I will call national debt line tomorrow for some advice.
Enid says
Hi, I’ve moved abroad permanently, because I am originally from outside of the UK. I have paid consistently through half of my IVA and notice that what I’ve paid is now £10K over what I originally owed. If I continued paying I would actually be paying £25K over my original owed amount.
In my situation, I’m in a country where my credit is now fine, and I don’t believe that the IVA or credit score in the UK will affect my credit rating in my new country. When I arrived, my credit score was nil.
Therefore, I’m considering discontinuing my IVA payments, letting it fail, this will allow me and my family to buy a home in our new country of residence.
1. I don’t want my creditors or the IVA firm to contact my employer (still UK Based).
2. We are currently renting, and the IVA firm have my address at my rental home. I don’t want them harassing the owners, when/if I decide to fail my IVA.
3. I want to be sure that my new country of residence will not seek to find credit history from the UK for a mortgage in our new country.
Can you advise on these points?
Thank you
Sara (Debt Camel) says
“notice that what I’ve paid is now £10K over what I originally owed.” is that 10k over what your debts were in the IVA? does that include any PPI payments? how long until your IVA finishes?
andrea says
Hi,
If I may, did you end the IVA? Did you have any problems or creditors contacting you?
Thanks,
Andrea
Sara (Debt Camel) says
It’s unlikely she will see that you have asked her this question.
It might be better if you just talked about your own situation? How far into your IVA are you? Are the payments too high?
Enid says
Thank you for responding.
That is 10K over what my debts were. They were not able to collect any PPI. My IVA still has 3.5 years.
Initially I had a leased vehicle, which I needed for work, and they had asked me to give that up, for a six year IVA. They said if I kept the vehicle (which I had to do), an extra year would be added to my IVA. However, when my lease came to an end, my payments went up by over £300 a month, because my leased vehicle was no longer factored in. I asked if my term could be reduced to 6years, since I no longer have lease, and they said no. Additionally, now I’m paying a lot more per month on my IVA and that’s why, over the term my payback will be much greater than my original debts that were owed when I took the IVA.
Sara (Debt Camel) says
I think you should ask your IVA firm for an account showing how much more you have to pay. You can’t be asked to pay more than the original debts PLUS IVA fees PLUS (sometimes, it depends on your IVA terms) statutory interest at 8% on your debts.
When you know the answer to that, you will be better placed to decide what to do.
Enid says
OK I’ll ask for that thank you
Louise Bruce says
Hi,
MY IVA is about to fail (I’m about 4 years in to it roughly) – as it has been so long since I last directly dealt with my creditors I can’t remember who they are, how many there are or how much I now owe. Of course I’ve also no idea if they will slap interest and admin fees on me. I’m not sure what do to now. Bankruptcy has been mentioned and I just don’t know if that is the right option for me. I now don’t think the IVA was the right option for me in the first place because not only did they not do the budget sensibly but I told them at that point that my job back then was not stable (we had just been bought out by another company and risk of redundancy at this point). Anyway, it’s done now, and I don’t know what do to next
Sara (Debt Camel) says
So you haven’t been paying the IVA? For how long? Are you buying or renting?
Louise Bruce says
I have been paying it but not consistently for the entire time due to redundancy etc.. But each time things have changed I have always kept them up to date and informed. It’s about to fail now because I literally can’t afford the repayments having moved and my rent is more and redundancy and my new job is for less money. I rent
Sara (Debt Camel) says
Have you asked your IVA firm if they can ask your creditors to agree to a variation in your IVA saying that it should be treated as completed as you are no longer in a position to make any monthly payments?
Louise Bruce says
Yes, a meeting with them was planned for yesterday with a proposal stating exactly that and the entire meeting was rejected
John says
If you move overseas and never come back to the UK, what happens if you fail your IVA in the UK?
Sara (Debt Camel) says
If your IVA fails, you are left with the debts in it. Whether it is possible or likely your creditors will try to enforce those debts abroad depends on how large the debts are and where you move to. I can’t give advice on this.
Ray says
I was abroad for 2 months doing humanitarian work. My lva was only 4 months to finish. When l was abroad my debit card was cancelled by my bank after they suspected a fraudelant activities. When l came back l received a letter saying my lva was failed few days before l came back. I rang the lva agent and told me that as long as l pay it it will be live. I told him that my sister wanted to pay the lump sum and close it early. He agreed for me to pay it in a week. That was last Monday. We rang today asking for the bank account to pay it off. They refused saying they made a mistake to tell me its closed. They offered me to take another one with them. L said l am only left with £1400 which my sister is paying off before it’s end date which is in August. They are refusing. What can l do please help.
Sara (Debt Camel) says
Are you saying your IVA was failed in 2 months? Were you behind with any payments when you left the country? Who is the IVA firm?
Have you complained to the bank and got your account reopened?
RizWhip says
I have had an Iva for roughly 10 months with about £80k in debts. The Iva company failed to add a debt to it even though I repeatedly reminded them of this debt. My Iva has now failed as I failed to disclose a debt and they believe there was a transaction posted after my Iva signed. I cannot find the receipt to prove that the transaction was before the Iva signed so have no choice but to let my Iva fail.
The Iva people have told me they can repopose another for me but the money I have paid over the last 10 months is fundamentally lost as it went to their fees and of course a new Iva will mean a new set of fees. None of what I have paid in the last 10 months have went to any of my debts.
I’m considering bankruptcy. I am renting but am on a large salary (let’s say it’s not far off 6 figures). Do you think bankruptcy is a good option or should I repropose a new Iva? I feel rather annoyed that the money I’ve paid will just be swallowed up. Is this correct or am I entitled to have that money refunded or transferred over to the new Iva?
Sara (Debt Camel) says
Well I certainly wouldn’t suggest you use that IVA firm – they have already proved to be useless, why would you choose them again?
You could consider a complaint to the IVA firm if you have evidence (emails?) that you kept telling them about this debt.
I think you should talk to a good debt advisor, not from an IVA firm, about the two options. If you have no assets to protect, bankruptcy can be a much better option than an IVA, a high income by itself isn’t a reason to prefer an IVA. I suggest you talk to National Debtline on 0808 808 4000.
RizWhip says
Many thanks. I certainly will do that
angela says
hi sara we are just over 3 years into iva ,debt was 16,000 paid in just over 14,000 but fees have been taken out prob owe 5 to 6 k ,we were contacted 7 months ago by the dwp to contact prudential ,and found out I had a pension from 1989 ,to do with national insurance ,through my employer ,serps , because I did not know about this pension at the begining of the iva we have received a breach and we put in a early and final using the pension ,no money has been drawn down on it ,and we sent all the evidence to prove we did not know are have knowledge of the pension at the start of the iva ,our question the creditors meeting is in 4 weeks for the offer of early and final and the breach ,one of the debts is HMRC of which we owe about 600 ,we are worried that we may be kicked off the iva
Sara (Debt Camel) says
So they are saying this was a breach because you didn’t inform them about the pension when the IVA was set up? Or when you found out about it?
Paul says
Hi, I am currently in an IVA with Payplan and I have just completed my annual review. They have put my payments up from £215 pm to £478 pm.
They said this was because my wife’s commitments had increased but they hadn’t. On my IVA forms it states my partners commitments were £102 pm ( I wish that was the case) but they were actually £302. They are saying now because I signed (I never actually noticed the £102 in the documents I think i was just happy something was finally being done.) so apparently I haven’t got a leg to stand on.
I’m thinking I will have to let my IVA fail and contact creditors about payment plan.
I want to repay my debt as when I took loans and other stuff out I was in a position to pay back with original lenders but s**t happens and things change.
I have a mortgage and owe about £58000 the house is worth no more than £125000. I don’t want to be made bankrupt, that’s just not an option for me. I’m not in arrears with the mortgage so that’s good. How could I sort this without being made bankrupt. Would it even be worth trying to dispute some of the debt as they are with debt collectors so sending a CCA letter asking for original agreement etc or would it just be worth sending them an I&E and an offer of affordable payment.
Thanks.
Sara (Debt Camel) says
This is your first annual review?
“They said this was because my wife’s commitments had increased but they hadn’t.” I don’t follow this. What was the actual situation when the IVA started? What did the paperwork say? and how has her situation changed in the last year?
SG says
Having similar issues with Payplan
6 months in.. they wanted a review after increase in council tax and gas and electric bills.. my wages stayed the same, and Payplan saying I have to lose contingency funds in the plan for clothes and shopping to pay the IVA
Sara (Debt Camel) says
why are they doing a review after 6 months – did you ask for one because of increased expenses? Do you have a house with equity?
Paul says
Hi Sara, yes first annual review. I submitted payslips and noticed on my budget planner that my wife’s commitments were down as £102, I know that’s not what I put down when I had to submit a budget planner when first applying for the IVA, but because I’ve signed the proposal they are now saying it’s an increase but it’s the same as it was last year. I honestly didn’t notice when signing the proposal to enter the IVA.
Carol says
Hi,
I am a full time student and waiting for first my first payment of maintenance loan, around £4000. Can they take it from me when declaring bankruptcy? It’s my only income at the moment. I am not a homeowner. Thanks
Sara (Debt Camel) says
That isn’t at all likely. Talk through your situation with a good debt adviser, eg phone National Debtline on 0808 808 4000.
Joanne says
Hi and help !
I am currently in an IVA 2nd year and it’s going well and I can afford payments etc.
I have moved over to UC from tax credits as I was advised incorrectly I would be better off and my award has reduced from £125 every 4 weeks to £0, I took the advanced payment again they told me me I was entitled to it while they worked out my new award and now received a letter saying it’s owed back.
I’ve now also received a working tax credit overpayment as they have worked it out on my salary now which over the year works itself out to my annual salary (hope that makes sense)….so looks like my salary is inflated.
I’m worried now that I’ve lost my tax credits and have 2 overpayments and I’m so worried to contact my IP in case they try and fail my IVA….I never miss payments and I don’t want to made bankrupt :0(
Back to worrying about money again…..any advice ?
Many Thanks
Joanne
Sara (Debt Camel) says
How much are you currently suppose to pay to the IVA each month?
Are you buying or renting? Do you have any assets to protect?
S says
Hi
Been in my IVA since Janaury, but since the. Circumstances have changed to the point that the IVA is unsustainable.
I would like to fail the IVA and look at being made Bankrupt or DRO
Should I ask the IP to fail the IVA and ask to be made bankrupt?
Sara (Debt Camel) says
I’m sorry to hear things aren’t going well.
I suggest you talk to National Debtline on 0808 808 4000. They can look at your current situation eg whether you are likely to qualify for a DRO.
Your IP is VERY unlikely to make you bankrupt just because you can’t afford the payments. If bankruptcy is your best option, you will need to stop paying the IVA so it can fail and save the bankruptcy fee.
Joanne says
I pay £300 month, I’ve deferred 2 payments overall and paid 2 ppi claims in over £2k….I own my home owe approx £64k and house was valued at £100k for IVA purposes.
Sara (Debt Camel) says
OK, at £300 a month there is plenty of room to reduce your IVA payments now your income has dropped. this will need creditor approval – your IVA firm can only cut them by £45 a month (that’s 15%) without having to ask the creditors.
How large are your debts that went into the IVA?
Joanne says
I had about 44k spread over CC’s 2 of those over 5k the rest under. I had my payments reduced in my first review from £340 to £290 so it didn’t have to go in front of creditors because I had lost some CSA payments as he went self employed.
I’m worried about the overpayment from universal credit and now from tax credits…I’ve lost £125 from them and now owe them ironically because of the change over nationally…when I applied for UC initially they told me to take the advance which was £800 now they want it back which is fair enough but I’m worried about the impact of that
Thank you
Sara (Debt Camel) says
I think you should go to your local Citizens Advice and ask for a review of your benefits and whether all the overpayments are 9a) correct and (b) recoverable. what made you apply for UC???
But you also need to talk to your IVA firm. You clearly can’t manage the current repayments. There is room for them to be reduced.
Caro says
“need to stop paying the IVA so it can fail and save the bankruptcy fee.” Is that mean that I don’t have to pay the bancruptcy fee after I failed IVA? thanks
Sara (Debt Camel) says
No sorry, I wasn’t clear. After you stop paying the IVA, you can start to put aside some money so you save up the bankruptcy fee.
Joanne Patterson says
Someone told me about it and I looked on entitled to abd it said I would be better off and it advises you to change….it’s been the stupidest decision I’ve ever made ! I feel like now I’ve properly looked into the implications I wouldn’t have been moved off TC’s until 2020….I can’t go into see anyone because it’s all done online and in the process ive lost what I was entitled to £125 and now owe them not just TC but UC as well…very frustrating.
The advance wasn’t a loan it was part of the reward which would be reduced from the amount I would receive which is now £0…just feel it’s a mess and I’ve been doing so well on the IVA the IP wrote in my review that it would complete without any issues in his opinion.
Will the advance payment affect the IVA that’s also my worry
Sara (Debt Camel) says
You need to go and talk to your local Citizens Advice. It doesn’t matter that you made the decision and everything was done online, you need a good benefit adviser to look at your situation and whether the overpayments are recoverable.
I’m sorry but it may be you made a very poor decision through what you read online and how you thought that would apply to you. Don’t make that worse by asking me or other people online to make guesses. Go and get proper benefits advice.
And tell your IVA firm what is happening and that it looks as though you will need your creditors to approve a reduction. I can’t think of any reason why you could be better off not telling your IVA firm now, and there are situations where you could be worse off if you don’t. be open, say you are trying to get your benefit situation improved.
Joanne Patterson says
Ok thank you for the advice…il ring both of these tomorrow and just hope it can be resolved without it affecting or breaching my IVA…I appreciate your help.
Joanne
Joanne Patterson says
Hi….can I just say thank you so much for taking the time to reply to me yesterday! I’ve rang the IP and they have been brilliant he isn’t going to issue a breach and will defer payments so I can repay the DWP as I have been badly advised on this occasion.
I’ve also rang tax credits and asked them to look at my award and final assessment be done at year end when my P60 is available hopefully they can do this
I think I must have just ignored this through fear and not rang anyone so thank you again.
Joanne
Una says
Hi!!!
I am in IVA nearly a year but have just realised that I wasn’t supposed to borrow money more than £500 wich i have done due to different reasons but they are payed back… i did let know my company about my error and explain that I didn’t know i could breach my iva by doing this…
How big chances are that they will try to fail my plan cuz obviously all them transactions will be in my bank statements!? I have not missed any of my payments in IVA
Sara (Debt Camel) says
So you have done the right thing by telling your IVA firm. If all the debts have been repaid and your payments were made on time I hope it will be ok.
Frances says
Hi, my IVA failed due to them increasing the monthly outgoing but I couldn’t afford it. I’ve now heard from two of my creditors totally just over 17k. I cannot afford bankruptcy but I think we may have over £50 per month spare for the DRO plus I’m going to uni next year so my loan will make me look better off so I’m concerned what would happen after the 12 months. What are my options please?
Thanks, Fran
Sara (Debt Camel) says
how many debts were in your IVA and what did they add up to?
have you acquired any other debts or arrears since your IVA ended?
when did your IVA fail?
Frances says
Hi,
It was loan, credit card, my husband credit card, council tax (even though I asked then not to include it)
IVA failed in October.
I have a credit card with 1000 on it. No arrears.
Thank you
Frances says
Sorry forgot to add it was around 16k originally but I’ve had max recovery write asking for 17k and another one for 2.5k both apparently from tesco. My loan and credit d card were originally with tesco but never for these amounts. Loan was 13k and CC 1.5k
Sara (Debt Camel) says
So your total debts at the moment appear to be over 20k?
Have you asked MR to provide a statement of account for the debts as you think the balances look too high?
How long ago was the loan taken out – not defaulted, taken out? Same question for the credit card in the IVA.
Frances says
Loan was January 2017
Credit card August 2016
Yes just over the 20k
No I’ve had no contact with MR, do I call or write to them? Thanks
Sara (Debt Camel) says
You can carry on trying to ignore them, but if you want a DRO you have to get proof your debts are under 20k. All of your debts, not just the ones you would like to get rid of.
The problem with contacting them is they may then be more pushy…
An alternative would be to set about saving up the bankruptcy fee – if you think you are over £50 a month spare income, then save up £70 or whatever ever month. You can start a bankruptcy application just to put the money aside where you won’t be tempted to dip into it, see https://debtcamel.co.uk/pay-bankruptcy-fees/.
When you get close to the fees being saved, you can then ask MR for a statement of account. If you are under the DRO 20k limit, you can then just ask for the saved up money towards bankruptcy fees back – you are allowed to have some savings in a DRO. If you are over, well you are nearly ready to go bankrupt.
Frances says
Thank you for your help, it’s really appreciated
Sara (Debt Camel) says
I should have added, look out for a Letter before Claim/Action if you do try to ignore MR while you save up… it’s the precursor to a court case, better to reconsider your options if you get one, see https://debtcamel.co.uk/letter-before-claim-ccj/ for what a letter looks like.
Keri-Christina says
I have paid 6 years of Iva and it finished in oct this year. They advised me to cancel my direct debit and that was it. We were advised by a mortgage advisor to take out a credit builder, credit cards which we did. I informed the Iva today as they wrote and said they needed a further 6 months to review for what reason I don’t know. We have Never missed a payment and followed the rules until I thought it was over, they now say I’ve breached as it isn’t over until you receive a letter of completion. They say it may fail but they never told me not to take out credit I assumed it was finished in October. Now in total panic that I might have to go bankrupt
Sara (Debt Camel) says
Is this the only issue? Or do they say you need to make any further payments?
How large was the credit limit on your credit card? Have you been repaying this in full each month?
Keri-Christina says
Hi thank you for replying. It is the only issue we have never had a payment break and always paid on time. Paid all payments and paid last one on Oct. the 2 credit cards were £500 each and we paid the minimum
Payment on them we are due to pay them off as we were waiting till after Xmas they will be paid off this month in full. Vansguard seemed rather pleased when they told us we’d breached. It doesn’t say in any of my paper work and they never told me on the phone that the Iva is not over until a completion letter is received. I was informed it was finished over the phone in October x
Sara (Debt Camel) says
You took these cards out after your last payment?
Do you have your original IVA documentation?
Keri-Christina says
Yes it doesn’t say anything about what happens when the Iva finishes. Only 72 payments
Sara (Debt Camel) says
And you took these cards out after your last payment?
Keri-Christina says
Yes it was after but they said it doesn’t matter as I haven’t had my completion certificate
Sara (Debt Camel) says
Yes, I am just trying to get the full picture.
Can you look through your IVA documentation for the clause saying you should not borrow when in the IVA. This is typical wording, but yours may be different:
“8(6) You must not obtain any further credit greater than £500 without the prior written approval of your supervisor, except for public utilities and to refinance any balloon 11payment at the end of a vehicle Hire Purchase Agreement. If you do obtain credit of more than £500 without the consent of your supervisor, this will constitute a breach of your arrangement. “
If your looks like that, then it says you can’t borrow more than £500 … neither of you has, you have a credit card with a limit of £500… That is not MORE then £500 and on that wording you have not breached your agreement. Remember each of you has a separate IVA agreement, you do not have a joint one.
If that is the case, I suggest you go back to your IVA firm and point this out.
If it doesn’t say that, come back here.
Marie says
Hi
I entered an Iva back in 2017.
I owe in the region of £31k, 17k of which is Hmrc (don’t ask)!!
I have fallen behind on my Iva payments and now might be facing Iva failure.
I own my own home which has around £40k equity in it so I was thinking, could I let my Iva fail then sell my house and offer f&f to my creditors? The main one being Hmrc—-do they accept f&f settlement or is the amount you owe what they want? (They aren’t set to get much under the Iva anyway).
Obviously renting will be a problem so I would have to take at least 6 months worth of rent payments from my equity and also moving costs and solicitors fees.
I wish I’d just sold my house at the start and never entered into an IVA, I’m a single mum to 3 kids and had not long had a baby, my situation has now completely changed (my eldest went to live with her dad so now am around £1k a month worse off due to tax credits and no maintenance payments).
What can I do? What are my options?
I’m not overly bothered about moving house, just scared that I won’t afford the rent as it’s about £200 more a month than my current mortgage.
Help please
Sara (Debt Camel) says
Can I ask who your IVA is with?
Any chance of getting a lodger if you now have a spare room?
Marie says
It’s with aperture (now Jarvis)
No I do not want a lodger, I have 2 children living here and I wouldn’t want to disrupt their ‘safe’ place and I wouldn’t trust a stranger to be in the house with my kids.
Thanks for Your suggestion though, it was something I’d looked into but decided against.
Sara (Debt Camel) says
So what has happened since February – is your IVA still going?
Marie says
Not a lot, it’s still going although I am behind on my payments
Sara (Debt Camel) says
You could talk to your IVA company and ask for your payments to be reduced. If you are going to do this, the sooner the better. If they say yes, good. If they say no, then I think you should go to your local Citizens Advice and let them look at all the option with you.
Dan says
HI,
An IVA was missold to me back in Sept 2014 (for £6000 of Debt which half of it was for council tax )and failed in August 2016. I was then provided with a Termination Report and Certification letter. I took matters into my own hands as i was fornuate with a new job and managed paying all my creditors by Jan 2018.
Since, I have been registered and monitoring my credit report on various sites. I event took a credit Card to build my credit report as my credit stated “Very poor” at one point back in 2018. Taking the credit card has help boosting my credit
One of the site it shows in the public information IVA completed and credit report states fair. On the other site it shows Excellent and doens’t show any info regarding my IVA.
Questions i want to ask are as follow:
Would the IVA info be remove from my credit report this Sept as it will be 6 yrs?
Also would i be able to remortgage properprty straight or event buy a property ?
Finally, is there a way i can get rid off the IVA on my credit file?
Sara (Debt Camel) says
The IVA will drop off in September and you can’t speed this up. It’s almost impossible to buy a house at the moment anyway!
After September you will always have to say Yes if you are asked if you have ever had an IVA or ever been insolvent. But you should Be able to get a mortgage at an AoK rate from a high street lender, just go through a broker, don’t apply direct and find you have picked a lender that will say No.
Dan says
So After September it will disappear from my Credit file ?
what’s an AoK Rate ? did you mean OK rate ?
Sara (Debt Camel) says
yes it should.
that was a typo for An OK rate
Anisa says
Hello I need some help and advice
My IVA was due to end September 2020. At that point I was told if I had equity in my house that I own -IVA could be extended for another year . I do have equity in my house . I wanted to finish the IVA early by paying a lump sum. My mum agreed to give me some money to clear and finish my IVA
The final amount was around £2000
When this was put forward to Creditots it was rejected
I pay mortgage on the house that I own and pay rent for living with mum – she is ill and needs looking after.
Couple of years ago I started to rent the property I own receiving rental income which does not cover the mortgage I was not making any profit I did not know I had to declare this – I was not aware I had to do a self assessment either.
Now my IVA company are threatening me with Bankruptcy. And said it’s a breach to the contract I have told them I did not know I had to tell them – I suffer from mental health issues depression anxiety and panic attacks.
I am worried now what will the IVA Company decide to do. I don’t want my IVA to fail. I don’t want to made bankrupt.
Sara (Debt Camel) says
The final amount was around £2000
that was the total of repayments for the rest of the IVA plus the extra year?
Did the IVA firm recommend this should be accepted?
Why was this rejected?
I pay mortgage on the house that I own and pay rent for living with mum
Are both of them on the income & expenditure that your IVA firm had? Or was just your mortgage there as the IVA firm hadn’t been told you had moved?
How much equity is there in the house?
Anisa says
Hello the final amount was £2000 including the extra year
IVA company put this forward to the credits
It was rejected because of breach to the IVA contract – I did not declare the rental income I get from the property I own – it makes no profit
The IVA did not ask me about rent income either
IVA company knew I owned a house and that I live with my mum
I bought the house for £100,000 and I have got £55,000 left
The IVA company have requested the self assessment tax return to confirm rental income received – I have not done this I did not know I had to.
Sara (Debt Camel) says
does your mortgage company know you are letting the house out?
Sara (Debt Camel) says
So can I be clear, is all of the following correct?
when you started the IVA you were livign in your house.
Then after a while you moved in to look after your mum and let your house.
Your IVA company knew you were living with your mum as you started putting that rent down on your I&E. Which still had the mortgage amount on it.
But you never told your IVA firm you were letting out your house and they didn’t ask.
Did they see your bank statements each year? would they not show the letting income?
Sara (Debt Camel) says
So you may have a problem hear as you appear to have told your IVA firm about all your exopenses – the mortgage, the rent you are paying – but not about all your income from letting the house.
And you may also have a problem as you haven’t declared your letting income to the taxman. But I have no idea if you will actually owe much tax.
You need to send your IVA firm info on the letting eg your bank statements showing the receipts.
And I think you should talk to a debt adviser about what an accurate income & expenditure sheet for you looks like at the moment. If that is quite close to the figure the IVA firms has, then you may be able to argue that although technically you didn’t tell them about the letting income in prcatice it has made little difference. but an I&E from a debt advise will help assess this.
I suggest you talk to national Debtline on 0808 808 4000.
Anisa says
The IVA company have requested the self assessment tax return to confirm rental income received – I have not done this I did not know I had to.
Sara (Debt Camel) says
yes the income should have been declared for tax. But you are allowed to offset some costs, I can’t say anything about this, you need to find a tax forum to ask about this.
Your bank statements presumably show the income, you can show that to your IVA company?
Can you check the summary I wrote above – is it all correct?
Anisa says
Yes summary is correct
Tom Gaffney says
I entered in to an IVA around 2005/6 I paid £330 per month in to it for three and a half years but unfortunately I was made redundant and so the IVA failed in about 2009. The debt was a combined debt of myself and my then wife totalling about £29000. The company that set it up has since been taken over a few of times and so it’s difficult to get any further information. I have recently been successful in the claiming of PPI however the ‘new’ IVA company that took over the debt has claimed it even though it failed over ten years ago. Is it right for them to make a claim on the PPI? Also, I am unaware that any of the monies I paid into the IVA for three and a half years was ever distributed to my creditors..How do I find out this information?
Sara (Debt Camel) says
who is the new IVA company?
Tom Gaffney says
HI, the new company is Aperture Debt Solutions in Belfast.
Sara (Debt Camel) says
So the question is, do Aperture have your old IVA details? That one is very old and would have been old when Aperture bought a lot of the IVAs from the last company that owned it.
If they don’t, the PPI has to come back to you.
Sara (Debt Camel) says
“Also, I am unaware that any of the monies I paid into the IVA for three and a half years was ever distributed to my creditors..How do I find out this information?”
why do you care?
what happened to the debts in your failed IVA?
Tom Gaffney says
Firstly, thank you for answering my questions.
I don’t know what has happened to the debts in the failed IVA. I have never been told and the debtors have not chased me for them. I agree that I shouldn’t care but I would just like to know where the near £10,000 I paid in went if not to my debtors. Once I get the information from Aperture and if they do have old information how do I go about claiming the PPI back? Also, what would you class as old information as I have moved house, split up from my then wife (who’s debts formed part of the IVA)?
To be honest I thought it was the bank trying to pull a fast one and not paying the PPI!! They say they have been waiting since March 2020 for Aperture to get back to them as they have said they have a claim. If when I contact Aperture they try to say I owe money what do I do? Is there a Statute of Limitations as I acknowledged I had the debt and so entered into the IVA?
Sara (Debt Camel) says
I agree that I shouldn’t care but I would just like to know where the near £10,000 I paid in went if not to my debtors.
If Aperture have the info on your IVA, they may be able to say what was distributed to your creditors.
if they don’t, then I suggest you stop thinking about this as it will probably be impossible to work out.
if they do have old information…
I suggest you cross that bridge when you come to it. For now, asking Aperture to find the info about your old IVA is the best thing you can do.
Is there a Statute of Limitations
yes, 6 years from the date your IVA failed. but the debts still legally exist even if they are statute barred so if Aperture can find the details of them, they may be able to claim the PPI and distribute it.
Tom Gaffney says
Thank you for your reply.
“yes, 6 years from the date your IVA failed. but the debts still legally exist even if they are statute barred so if Aperture can find the details of them, they may be able to claim the PPI and distribute it”….
When I contact Aperture for the information and as you say the debt still exists, could they ask me to set up a payment method for any outstanding debt even though the IVA failed or is that now spent as the IVA failed?
Sara (Debt Camel) says
No they won’t do that. The only thing to worry about is whether aperture keep the PPI and send it to the creditors or whether you get it back. Aperture are not going to try to set up a payment arrangement for the old debts!
Anna says
I have been in my IVA 8 years as my circumstances changed an payplan kept extending the term. I now have inheritance as I’ve lost my dad so asked for a full an final settlement figure. My original debt was £13,000 an I have paid £10,000 in over the 8 years. They want another £20,000 to complete! So for a 13,000 debt they want a total payment of £30,000!!
So it’s £13,000 debt
£7,000 in interest AND
£10,000 for payplan. They want 76% of my original debt in there fees an charges. I’m disgusted to be honest that they are allowed to charge thay.
Although my IVA is due to complete next month I am considering failing it as I feel I would financially better of paying my creditors in full now. As I owed £13,000 an £4,000 of the £10,000 paid in has gone to them so I owe £9,000 plus interest they might charge put payplan want £20,000 to complete.
Am I legally allowed to let it fail to avoid paying them any more ?
Sara (Debt Camel) says
if you let an IVA fail by not co-operating when you have had an inheritance, the IVA firm may decide to make you bankrupt instead.
Sara (Debt Camel) says
I have sent you an email about this.
Tom Gaffney says
Having sent my request, they finally got back to me with this reply:
Dear Mr. Gaffney,
Your Individual Voluntary Arrangement (IVA) – Subject Access Request
Thank you for your recent Subject Access Request (“SAR”).
Under Article 12(3) of the General Data Protection Regulations (“GDPR”), we are required to respond to your SAR within one month of receiving it, however, if the information we hold is substantial and complex, we have the opportunity to extend the timescale for response for up to two months in certain situations.
I have logged your request currently for all documentation held on you and your IVA.
In order to provide you with the information you require in as timely a manner as possible, please let us know if you require only certain information (for example; information held during a certain time period, or only details relating to you and your creditors, etc). Please reply to this email with the specific details.
In the event you require access to all your records, and should we need to extend the period for response, we will let you know that this is the case as soon as possible and within the original one-month timeframe.
I trust this is satisfactory, however should you have any further queries please do not hesitate to contact customer services on 0333 939 7920 or by email at ivacustomerservices@aperture.uk.com
So I suppose it’s just a waiting game now!!!
Tom Gaffney says
Hi
I have just had all the paperwork for my IVA that failed over 10 years ago and it looks like they are going to keep all the PPI that I has been awarded to me. Oh well…they say you never miss what you’ve never had!!
Thanks for all your advice and comments.
Tom
Georgina says
Hi,
After a year of seeking advice ref debt I entered into an IVA in Jan 2020…with Hanover insolvency. i am self employed. I was relieved to get my finances on track. As a result of Covid-19 I asked Hanover if I could have a 3 month break from the £135 monthly payment. ( I had made 3 payments) I was asked to submit a bank statement so they could review. I was in an overdraft which was shown at the beginning of the IVA… I was never told by Hanover that I was not able to have this facility even when I submitted my bank statements when setting up IVA. I was told over the phone I was in breach of the IVA and it was terminated. I received nothing else from them as to what my options were or written confirmation of the termination.My creditors have started to contact me. I’m still self employed. My dad died last year so I moved in with my mum as she has been very ill. My mum now needs to move into a OAP bungalow. I have been refused 5 time’s to rent a property because of the IVA, . even though I have a good income and references stating that iv always paid rent. I have no where to go and I’m terrified of being made homeless and losing the business iv worked hard for. My debt is 28k. Please can you help.
Sara (Debt Camel) says
You should ask Hanover for the letter of termination and the failure report mentioned in the article above.
Have you looked on the Insolvency Register to see if your IVA has dropped off that?
As you are self employed, I suggest you talk to Business Debtline https://www.businessdebtline.org/ about your options for your debts and how that may affect your business.
The problem you have renting would probably have occurred even if your IVA was continuing. Is there anyone in your family that could act as a guarantor for you?
Georgina says
Hi Sara,
Thank you for your reply.
I have checked the register and my name is still on it. The last correspondence I had with Hanover was 10th April 2020. Thank you for the information ref business debt line I will contact them also.
The last correspondence I had with Hanover was when they informed me over the phone that I had been given incorrect information ref overdraft..(as I was in my overdraft when I applied for the IVA and it was evident on the bank statements I submitted) that I was in breach of the contract as a result. I was offered no advice simply just to contact all my creditors
Also, when I shared my concerns about renting given my circumstances I was informed that most landlords accept tenant’s with IVAs. Once I was in the IVA and became aware that hardly any letting agents/landlords would accept me with a IVA , I was then informed that if I wanted to save any money if business improved, and in order to offer a potential landlord an upfront rent payment, to help secure a property it would be taken off me to pay towards the IVA.
I am now so sceptical of an IVA I am considering contacting all of the creditors and making independent arrangements as I feel I have absolutely no where to turn and my credit rating will remain bad for 6 years what ever I do and still reports I’m in an IVA.
Kind regards
Georgina
Sara (Debt Camel) says
I was informed that most landlords accept tenant’s with IVAs
do you mean that before you started the IVA you knew you would have to move and they told you that then?
Georgina says
Yes, my dad died a few months earlier and my mother had became ill and was due to have major surgery..I knew at some point I would have to give up my rental property and stay with her whilst she was recovering. I was concerned that after this period I would need to find another rental property.
Sara (Debt Camel) says
then that was shockingly bad advice from Hanover. People in IVAs usually have problems getting a new tenancy unless they have a guarantor.
You could send them a formal complaint saying:
1) you consider you were mis-sold the IVA as you discussed the fact you would need to move because of your mum’s health and they said incorrectly that most landlords will accept tenants with IVAs
2) they have agreed they mis-informed you about keeping the overdraft
3) they knew you were vulnerable as you had asked them for a payment break because of Covid-19 but they just decided to fail your IVA without discussing any alternatives with you.
Ask for compensation. I don’t know what you think would be acceptable?
Winning these complaints isn’t easy but if no-one complains IVA firms just get away with this very poor behaviour.
Also send Nicola.whitham@hanoverinsolvency.co.uk an email headed Subject Access Request. Say you want a copy of all your personal information including recording of phone calls. That may take some time, so don’t delay sending in the complaint waiting for it.
Georgina says
Thank you Sara,
That is really helpful, you are the first person to have understood how I am struggling with this and finding it difficult to move forward. I am fully aware the debt issues is my doing. I am committed to paying back what I can. I want to be able to get back on track personally and professionally with honest advice and guidance…which you have provided so far….thank you….!!
I will contact Hanover request the information and place the complaint. I’m not sure about compensation as I’m not sure how that will work considering I’m in debt already. I just want my name to be off the register and access help with the debt from a reputable organisation at least then I may be able to see light at the end of the tunnel, even if it takes 6 years. Without an IVA initially I might be able to save enough money for a 6 month deposit to offer a potential landlord.
Thank you.
Sara (Debt Camel) says
Unfortunately there is no way they can remove the IVA from your credit record.
I suggest you ask Hanover for enough money for a 6 month deposit.
Georgina says
Hi Sara,
Thank you, I might suggest that to Hanover.
Can I ask if once my IVA is off the register can they still take money from me? I’m worried that if my business starts to pick up again and I start to earn more money or even manage to save money over time… will they be able to take this from me even if I am paying my creditors on an independent arrangement?
Many thanks
Sara (Debt Camel) says
Not if the IVA has been failed. But talk to National debtline about this.
Darren Smith says
Hi, Looking for advice really… Started a iva back in December last year… All is fine and I haven’t missed a payment.. However my landlord is very ill and I may need to seek alternative accommodation I’ve not long seperated and I have 3 children who I don’t have full time but I have them stay with me just under the 50/50 threshold… I can’t save for a deposit as most of my disposable income pays towards my iva. Would they object to me taking a payment break so I can afford to save up a deposit so I can move somewhere else I don’t not want to pay my iva but I could be homeless in weeks or months maybe even days… Any advice on what I should do my council won’t help me as I apprently made myself voluntary homeless by putting my children’s needs before mine… I don’t really know what I can an can’t do with a iva as it was a totally rash decision an one I regret but I had to do it at the time…
Sara (Debt Camel) says
How large are your IVA payments? How large are the debts in your IVA?
Hayden says
Hi all,
I started my IVA with payplan this year (January 2020) and they advised me a IVA was my best course of action as I have a car which is worth over £1000. I dont own my own home i am renting. The debt is roughly £15,000, so after reading all the comments on here I am wondering if I shouldn’t of been given the IVA option and gone for a DRO or bankruptcy, as the monthly payments are £105 and leave me with next to nothing left. Can i go for a DRO now or is my only option bankruptcy.
Sara (Debt Camel) says
How much is your car worth?
Are you struggling a lot to make the 105 payments?
Have your finances been affected by Coronavirus?
Stephen says
My IVA has been terminated after just a few months this is due to 1 creditor not accepting the IVA, where do I go from here? as I feel the company that I used to set the IVA up has just left me stranded
Sara (Debt Camel) says
was your IVA approved bt the correct majority of your creditors? or did it never actually start?
Stephen says
Hi yes my Iva was approved
Sara (Debt Camel) says
Then who is this creditor that is not accepting the IVA and why?
were they missed off the list of debts in the IVA?
And can you say some more about your situation – how large are the debts in your IVA? how much were you supposed to pay each month? do you have a mortgage or are you renting?
Janet says
My iva review has come up my pay has been half What i had been getting when I first started the iva but i still am making the same payments with help from my son who gaves me some money every month but its still not up too what i did have i cut alot down what i was spending on with this virus i have been in isolated and just transferred money into his and he was paying the rest i have over 600 pound less a month now
Sara (Debt Camel) says
Is this your first IVA review?
Do you have a house with equity?
Is your pay cut due to coronavirus? Do you expect your pay to increase soon?
Janet says
Im on iva when I started it i was in full time work now im off sick i dont get half what i had i still pay my iva havent missed a payment since I started my question is my son is helping me to pay my bills what he gaves aswell as my pay still doesn’t make up for when i started iva i have cut down on alot off things now on my bank account it shows that i transfer Money into his account he pays everything out for me so i put into his i still have half off rent to pay and with everything else we payout my pay in a month is 408 pound is all i get and he pays out the rest which can be around 500 sometimes a bit less will the iva question it its still less than I started i had been getting 1200 month when I started the iva
Sara (Debt Camel) says
Hi Janet,
is the end of your first year?
Without knowing the details, it seems likely that your options are
1) to ask your IVA firm to reduce your payments a lot,eg to £60 a month – but could you really afford this? It’s fine for your son to help with the bills if he lives with you but he shouldn’t be having to pay your debts!
2) to ask your IVA firm for a 6 month payment break until you get better and back to work – this could be a good option if you are likely to get better soon and be able to go back to your old job.
3) to let your IVA fil by stopping paying and thenget a Debt Relief Order (DRO) instead.
I think you should talk to National Debtline on 0808 808 4000. They can explain about a DRO and look at whether you will qualify for one. If you do, it could be a good option for you.
Janet says
Im in my 2nd year off iva i still can afford to the iva its just my review is up now and its just my bank statements that it shows i transfer money into his account i pay my own debts it he helps with food elc Internet phone i put money into his account and he pays all out for me
Sara (Debt Camel) says
Your IVA company won’t mind if you pay your son and he pays the bills.
But if your income has dropped so much, is the IVA really affordable? Do yourself a big favour and talk to National Debtline about a DRO. If they say you wouldn’t qualify, fine, you know where you are. But if they say you do, then that could be a good and stress free option for you – you don’t have to make ANY monthly payments in a DRO and your debts are wiped out after a year.
Janet says
Thank you so much for that very much appreciate
Emily says
Hi
I’m currently a year and half in to my IVA. I was furloughed during lockdown so asked for payment breaks but then I unfortunately lost my job. I’ve since found a new job but my wage is £200 down a month to what it was in my previous job I am looking for a better paid job but obviously in current climate that’s not so easy. I am struggling to pay my IVA payment due to the decrease in my salary – I was paying £100 a month the only alternative they have given me is £85 a month instead but I don’t think that’s doable currently. I don’t want to go for bankruptcy but was debating a DRO?
Sara (Debt Camel) says
How large were the debts that went into your IVA? Are you renting? Do you own a car?
Emily Kelly says
They were roughly £10,000. I live with my parents but help out a fair bit. I don’t own a car
Sara (Debt Camel) says
Read https://debtcamel.co.uk/end-iva-change-to-dro/ and talk to National Debtline about whether you will qualify for a DRO.
If you do, the only downside to a DRO is if you do get a better job within a year – then your DRO may fail. Bankruptcy wouldn’t fail. Bankruptcy isn’t worse than an IVA or a DRO on your credit record – they are all much the same.
Emily says
Would bankruptcy effect my parents house? Also read online you have to give in your bank cards etc is this true?
I’ll ring National debtline tomorrow to thanks for your replies
Sara (Debt Camel) says
Would bankruptcy effect my parents house?
No. Not unless you own a part of it, which I guess you don’t.
Also read online you have to give in your bank cards etc is this true?
You may need to change your bank account to a basic bank account. But these basic bank accounts are great and there is a lot of choice, see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/.
Emily says
I already have a basic bank account as was advised this with my Iva anyway but still have a Halifax current account they said this would be fine but to make my payments from a different account. It would a lot of hassle to move everything from my current account if they said to cancel it though do you think I could keep it still?
I’ll ring up for advice this week and see what they say thanks 😀
Sara (Debt Camel) says
Moving payments between bank accounts isn’t a real hassle compared to making the right choice between the different sorts of insolvency!
If you have been allowed to keep the Halifax current account in an IVA, I am surprised, so I caon’t guess if you can keep it in a DRO or bankruptcy.
Skelly says
Hi I entered an Iva in 2018 but I didn’t tell them I was already on a dmp I have been paying both , but my dmp has found out I’m in an Iva and they said unless I sort this out they will cancel my Iva can you give me any advice what to do I’m worried sick
Sara (Debt Camel) says
Sorry but can you say some more about this – why did you do this? how large are the debts in your DMP now? In your IVA? do you have a house with equity?
Trix says
Hi, I advised my IVA company at the very beginning that I couldn’t remember some of the companies I owed money to. They said not to worry because they would do a full search & locate anything outstanding. After entering into the IVA I started receiving letters/calls/emails from companies that weren’t named on the IVA & my IVA advisor said just to ignore them. I’m still receiving contact nearly 2 years later. I started an IVA to clear my debts completely but now I’m worried I’m still going to have outstanding debts once the IVA completes. Could you offer any advice on this please.
Sara (Debt Camel) says
How large are the debts in your IVA?
How much are you paying a month?
Are you buying or renting?
How large are these new debts that have emerged?
What sort of debts are they, credit cards, loans or something else?
Are they pretty old?
Trix says
Hi, the debts total around £20,000. Payments are £110 per month. I am renting. New debts that have emerged are fairly small, anything up to £400 each & are things like catalogues, one is a £300 loan & they are all old debts from years ago. Thanks.
no payments have been made to these debts in the last 6 years. There’s maybe 4 or 5 debts totalling less than £2000. Thanks.
Sara (Debt Camel) says
You have several options:
1) stop paying your IVA and go bankrupt instead. Bankruptcy covers all debts even if they are not listed. If you had gone bankrupt instead 2 years ago, this would all be over by now! At this point in time you may prefer to battle on with the IVA, but if you think there could be a lot more debts to pop up, then carrying on with the IVA could be very stressful.
2) tell your IVA firm you want the debts included in your IVA. This can be done but it is a hassle, which is probably why the iVA firm doesn’t much want to do it. It may also lead to your IVA being extended by 6 months or a year because of the extra debts. Your IVA firm isn’t going to want to do this several times, so how confident are you that all the old debts have now emerged?
3) ignore them and hope they go away, if they don’t offer them a small monthly payment. You are getting most of your debts sorted out in the IVA, just a few left to deal with.
4) challenge the debts as they pop up. If you haven’t made a payment for 6 years they may well be “statute barred” but this can be hard to be sure about (see https://debtcamel.co.uk/statute-barred-debt/). Also the creditor may not be able to produce the right documentation so they are unenforceable in court so you don’t need to pay them. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/ for why the CCA agreement matters and how to ask for one.
National Debtline on 0808 808 4000 can help you decide which of these options is best and explain the implications of each.
Trix says
Hi, thanks very much for your help & advice.
Sue says
I had an IVA, originally with Cleardebt, then taken over by Aperture and now with Jarvis. It was for 72 months and I have 12 months left. The total debt was about 23k and I have been paying £71 a month . I have missed 2 payments throughout this time. I never had a request for annual reviews from Aperture and I stupidly did not contact them. Jarvis have now written and said that I am in breach and it is likely the IVA will be terminated. Looking at their report I am shocked to see that of the £4118 I have paid over the past 5 years, only £276 had gone to creditors. The rest has all gone on fees and expenses! I don’t want this to fail now but would just like it finished. A friend has offered to give me £1200 to make a full and final settlement offer. Do you think this is likely to be accepted. I’m beginning to think I was given the wrong advice by Cleardebt in the first place!
Sara (Debt Camel) says
Jarvis have now written and said that I am in breach and it is likely the IVA will be terminated.
It’s hardly your fault Aperture did not do annual reviews.
Have Jarvis said how much you owe?
Sue says
The last annual review I completed for Aperture was at the end of 2017 and I received nothing from them after that. Jarvis have not given an amount owing figure but do you mean total debt outstanding (which would still be pretty much what it started at), or missed payments which is £142.
Sara (Debt Camel) says
why are Jarvis saying you are in breach – just because of two missed payments?
Sue says
It doesn’t really say. It’s a pdf so I can’t cut and paste but basically they’ve sent an annual report to creditors saying that they haven’t received documents for review and therefore a notice of breach has been issued and the IVA will likely be terminated. I only got an email from Jarvis in October saying they had taken over from Aperture and they have not asked me for any information.
I just want this whole thing finished.
Sara (Debt Camel) says
Go back to Jarvis and tell them that Aperture never asked you to provide anything so you don’t understand how you can be in breach.
Sue says
Hi Sara
OK. I’ll give that a go.
Thanks.
Sarah Owen says
Hi I have been in an iva for 2 years and they have just tripled my payments, meaning I’ll be paying back over double my original debt! My debt was around 6500 to begin with, and in my current situation I feel I’d be better off on a dmp and just pay back my debt instead of the iva fees too. I rent at the minute. Would this be an option for me do you think?
Sara (Debt Camel) says
are the new higher payments affordable? do you have any extra expenses they haven’t taken into account? why have they gone up so much?
Sarah says
I could just about afford them if I cut back on food shopping and stopped buying anything for the kids. My point is though if I can just about make them payments, wouldn’t I be better off paying my creditors either direct or through dmp and not paying the extra £8000?
Sara (Debt Camel) says
You can’t easily opt out of an IVA, you have signed a binding contract.
That doesn’t sound to be as though the new higher payments are affordable for the next 3 years. It may be a lot better to try to get them reduced, rather than fail an IVA and then find it will take longer to pay off the debts than you think. Also most of the IVA fees will already have been taken by the firm.
Sarah says
That’s really strange. I have another 12k still to pay so if they have already taken their fees that means my debt has doubled for no reason?
Sara (Debt Camel) says
Have they said you have another 12k to pay? It is possible that if you carry on paying at the current rate, your IVA will end early.
Sarah says
It says on my app I’ve paid 1890 out of 13,910.
Sara (Debt Camel) says
I suggest you talk to your IVA firm and ask why it is so large. And if the new [payments aren’t affordable, tell them this as well.
Meadow smith says
Hi
I am of the view that I was miss-sold an IVA back in 2017. I had to leave my job with immediate effect due to workplace bullying and subsequently fell behind on my loan / credit card payments (up until which point where always paid on time).
Already in a dark place of crippling anxiety and depression – I was then in a place where I was trying to look for work and support my son (single parent) whilst trying to navigate the benefits system.
I total I was out of work for about 12 weeks and along the way was advised into an IVA. I owed about 17k in total and pay back roughly £300 pm. (Which will total more or less 100% of the debt I owed). I’ve made every payment to date but noticed following a statement from max recovery (who the main proportion of debts have been sold to) that my debt is hardly coming down.
An Iva was never the right option for me. I rent my home and have a car on lease – now in a much more stable place mentally I can see that I would have been better just dealing with the companies I owed money to myself.
Can I fail my Iva and still do this with a view to paying off the debt sooner.
In staying in the IVA any pay increases I receive will fall into this bottomless pit that I should never have been advised into.
What shall I do?
Sara (Debt Camel) says
3 years into an IVA it is normally better to carry on if you can afford it. It may well have been a bad decision when you started, but where you are now, why not just carry on? It isn’t a bottomless pit, it’s just another 2 years.
Meadow smith says
Thank you for coming back to me so soon I feel so relieved.
I am looking at a job promotion before April and any increase in salary will go straight into the IVA.
This would mean I can finally save for a mortgage for me and my son – but not if I stay in the IVA as any incremental increase will go to what feels like the bottomless pit.
If the Iva fails can I not work with the creditors personally to continue to pay off the debt that way?
Sara (Debt Camel) says
Normally an IVA fails because someone can’t afford the payments. If you deliberately stop paying to fail the IVA that is going to upset your IVA firm whol will tell your creditors. They may then expect you to pay them as much as you can afford. There really isn’t a route here that will let you pay your creditors less and save a house deposit.
In theory also your IVA can make you bankrupt, that is pretty unusual but it is possible.
lou says
I’d be really grateful for any advice please. I am in an IVA but have not made payments for several months due to a number of reasons. I am in the process of selling a rental property to make a f&F offer to settle the IVA. However, the company is so unsupportive, rarely answer questions or emails and I feel deserted. I am worrying so much as the sale to make the offer won’t go through for another two months and then it may not even be accepted (have had no guidance on what to offer either). I am wondering if I should just let the IVA fail and contact all of my creditors and ask if they would be willing to put me on a DMP. I do not want / cannot go bankrupt so a DMP is the only option. Live in a property with some equity (with husband) and my IVA is for debts approx 60k. Please can you advise what you feel is the best option? I am trapped in an IVA which is likely to fail anyway so I may as well keep my equity and contact creditors direct to set up a DMP? At least then I am free of this IVA company and not wondering everyday what’s going to happen. Thank you.
Sara (Debt Camel) says
can you ask the IVA firm to put your IVA on hold while you sell the BTL?
Lou says
I have asked them several times for advice and what opinions are but not getting any response. I had a breach notice several
Months ago and I did contact them several times to say I’m trying to resolve but they don’t reply. I have contacted a couple of creditors to ask the question re a DMP and they said it would be feasible. I just think this might be the better option – being free of IVA – but do t want to make another wrong decision. I shouldn’t have taken the Iva to start with but hindsight a wonderful thing!
Sara (Debt Camel) says
deliberately choosing to fail an IVA in this situation may be a risky move – your IVA probably contains a term saying the IVA can make you bankrupt if you don’t pay. That is rare, but it is possible where the IVA firm knows you have assets so it can’t be ruled out.
Who is the IVA firm?
When did the BTL go on the market
Lou says
The BTL has been on the market all year. I found out yesterday my buyer has pulled out so back to square one. The reason I haven’t been able to pay is that my husband and I are separating and financially things are very difficult for me. He refuses to sell our main house. I am now thinking to go and live in My BTL house to get away. So that’s why the Iva is proving difficult and I am struggling both financially and mentally.
Sara (Debt Camel) says
If you go and live in the BTL, what will your finances then look like?
Have you spoken to a solicitor about separating from your husband?
Rhi says
Hello, I don’t know if anyone can give me any advice. I’m currently applying for a joint IVA with my husband (debts of £27000) and its not looking good. I have failed an IVA in Jan 2020 (just me) and it looks like that is why. If they don’t accept it, I don’t know what to do because we owe too much for a DRO, we can barely afford groceries, let alone the bankruptcy fee, and we’ve tried to negotiate with each company but half of them don’t reply or won’t accept talking to me on my husbands behalf (he has PTSD and is currently unfit for work bc he can’t get treatment bc of covid). On top of that, we survive on Universal Credit, have a child under ten, and I am disabled and self-employed but I only bring in about £400 or less a month.
At this point, I don’t see a way out. We have no assets, no vehicles, nothing to sell. Can anyone advise us? I haven’t found any other option online that would be applicable to us.
Sara (Debt Camel) says
How large are your own debts? How large are your husband’s own debts? how large are the joint debts?
Rhi says
My debts are around £12,000, his are around £14,000 and we have one joint debt for council tax at about £2,000 that we have been keeping up repayments on. My debt stemmed from the breakdown of my first marriage and his was incurred after he was injured in a motorcycle accident and had to leave his job. Our income is about £2k a month. We’ve been told if we apply for a DRO individually, we have too much spare income but not enough to actually pay everything back. And we’ve been told they really scrutinise your income, like just having things like Netflix is frowned upon, though we use it for entertainment as we can’t afford days out, cinemas, or anything really. I haven’t left the house properly for 18 months and can’t even afford to visit my mum. We literally have nothing and anything spare we do have goes on our daughter’s school uniform and other needs.
I’ve also just been notified they’ve denied the IVA.
Sara (Debt Camel) says
So both of you have debts below the 20k DRO limit – which in any case is increasing to 30k from the end of June.
We’ve been told if we apply for a DRO individually, we have too much spare income but not enough to actually pay everything back. And we’ve been told they really scrutinise your income
Who said this, your IVA firm? Which firm?
Do you have any disability benefits?
Sara (Debt Camel) says
Also how much was it proposed you would pay a month in this rejected IVA?
Rhi says
We proposed £100 a month as it’s all we can realistically afford every single month. We applied through New Leaf (apparently the IVA company I used last time went bust). I’m currently applying for PIP as I have a long term mental health illness, a lung condition and an autoimmune disorder, but it’s a long wait to get anywhere. I didn’t know the limit was increasing but I think we still have more than £50 a month disposable, just not more than £100.
Sara (Debt Camel) says
It sounds as though your creditors may have done you a favour by rejecting this joint IVA.
You don’t get a joint DRO, you each get one.
The DRO criteria are changing from the end of this month, from then you can each have £75 a month spare income in a DRO. From what you have said it sounds pretty likely to me that you will both qualify for a DRO.
And with a DRO, if you get PIP awarded, then you will also be allowed additional expenses for your disability – in an IVA it would all have to be paid to the IVA.
SO you both need to talk to someone who actually knows about DROs, rather than someone who is just try to sell you an IVA… phone National Debtline on 0808 808 4000.
Rhi says
I will do that, thank you. This company did push for the IVA and kept asking us to pay more but we simply can’t. I’ll speak to the National Debtline and go from there. Thank you again.
Sara (Debt Camel) says
I would be interested to know how it goes.
Gray says
I’m just under 4 years into my iva, I’ve kept up consistently with payments. I have a sharesave scheme through my work that matured during the iva, it was factored into being paid to te debtors upon Maturity. We had alot of car problems with partners car, we used the money to repair her car (she needs for work and kids school). Payplan are saying despite seeing all the car repair bills they still want the money and are putting on an extra 20 payments on the end of my iva.
Also they are saying I had a savings account (through work) that had money in it which it did not, and I’ve no way of proving it as it was closed years ago (there was a loan taken through the savings plan that went into the iva) so I think any amount that was in that account went into the money I owed them.
Bankruptcy is looking appealing after I was finally seeing a light at the end of the tunnel then this has got thrown in.
Sara (Debt Camel) says
We had a lot of car problems with partners car, we used the money to repair her car (she needs for work and kids school)
How much money was involved? It would have been a lot better if you had cleared this with your IVA firm before spending the money like this.
they are saying I had a savings account (through work) that had money in it which it did not, and I’ve no way of proving it as it was closed years ago
You should be able to get back statements going back 6 years even for closed accounts.
Bankruptcy is looking appealing after I was finally seeing a light at the end of the tunnel then this has got thrown in.
You are renting? Do you own a car? How large were the debts going into the IVA and how much have you been paying a month?
Gray says
Thanks for your reply Sara.
So the sharesave scheme was about 1.4k, and car repairs totaled about 2.5k (with proof).
I’ve contacted the credit union about the savings and waiting on a reply.
We rent (housing assoc). We own 2 cars. Debt for iva was about 22k, im paying just under 300 a month.
Thanks for any help.
Gray
P M says
My husband has left and my IVA wants equity release. They want £15k of the equity when my original debt was £18k. I have never missed a payment and everytime my monthly payment increased paid it. Upto date I have paid £10k put IVA runs to August this year. My husband will not remortgage for me to get equity as he no longer lives in the house. My mortgage finishes in 16months but would have to extend a further 16 months to release equity. He said he is only willing to pay his half of what the mortgage is now for the next 16 months. Will the IVA fail or will they extend it.
Sara (Debt Camel) says
Now he has left, will you be able to afford the rest of the IVA payments?
Scott howes says
Hi, we entered a IVA with 9yrs ago, and through no fault of our own, it failed 4yrs into it. At the time we were with Ebengate insolvency ( I think that’s what they were called), which then transferred to vanguard.
Via vanguard we were forced into entering a further IVA, through scare mongering and tactics, and probably stupidity on our part we agreed to it, and this time around it was extended to a 6yr IVA
So basically we’ve been on a IVA for around 9yrs now, and I feel that we have been done a injustice, by the IVA, company
Do you have any advice on what we can do.
Sara (Debt Camel) says
Do you have any assets to protect?