Failed IVA advice

gg493

need some advice for my brother, situation is as follows:

he went into an IVA in Dec 2006, at an agreed sum of 21K, payments going through ok until the CSA made against him for his daughter from a previous relationship, so IP was informed and they immediately told him that it would drop his payment to 50% of the agreed, so he had failed his IVA and should stop his direct debit immediately, this was Jan 2008. depsite numerous calls the IP did not contact again until JAN 2009 saying that as he hadnt kept up payments he had failed his IVA. The final statement finally received showing the 4K paid off had only gone to the IP (as suspected) and more surprisingly that the majority of the debt had now been transferred to MAX Recovery Limited. April 2009 he has recieved 5 letters from Eversheds on behalf of Max Recovery demanding payment in Full totalling 44K of the original debt amount. would appreciate advice as to whether Bankruptcy is the best option or attempt to go into another IVA and have to again go through what was a very stressful time again

fermi

It is not unusual for Max Recovery to buy up debts that have been included in an IVA/bankruptcy. That is their core business.

How much can he now afford monthly?

Why did he go with an IVA rather than bankruptcy in the first place?

Was there property to protect? Does he have equity in a property?

Sorry for more questions than answers, but we need more info before we can comment more.

Also bear in mind that if he should be considering bankruptcy then he needs to get some free impartial advice on this. The court/judge may refuse a bankruptcy if you don't.

See here: Bankruptcy Help: Important topics, factsheets and links

fermi wrote: »

Advice on bankruptcy.

The court/judge will normally ask whether you have taken professional advice that bankruptcy is in your best interest. If they believe you have not taken proper or sufficient advice then your bankruptcy may be refused. There are many places and organisations that you can get advice from, but the ones that people on this board have found most useful are listed below:

Main recommended sources of help:

• Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111
• National Debtline - Website: National Debtline Telephone: 0808 808 4000
• Citizens Advice Bureau - Website: Citizens Advice or visit your local CAB centre (find nearest)

Others:

• Business Debtline - Website: Business Debtline Telephone: 0800 197 6026
• Christians Against Poverty
• PayPlan
• TaxAid - Help with tax debts.

For general queries about bankruptcy you can contact:

The Insolvency Service Enquiry Line - Tel: 0845 602 9848 - Email: [EMAIL="insolvency.enquiryline@insolvency.gsi.gov.uk"]insolvency.enquiryline@insolvency.gsi.gov.uk[/EMAIL]

(Please be aware that the enquiry line cannot give debt advice or counselling or advise you whether you should go bankrupt. They can only answer general/technical questions on bankruptcy)

gg493

thanks Fermi, originally the IVA was the recommended option from the debt advice company he went to, the CSA was not part of the picture and payments were affordable. initial payments to the CSA were at a high level to cover backdated payments, which caused the initial problem. there is no property to protect, he is in a council house which is in his partners name. affordable payments now, with the change of circumstances, would probably be around £250 per month, which is probably around 60% of the original IVA figure.

he has taken advice from CAB over the non-communication of the IP administering his case, and also the relevent government agency, they supplied forms for bankruptcy in the event that the companies concerned eventually contacted him, which they now have. both advisory agencies expressed some concern over the fact that the IP instructed him to cancel the direct debits before any creditors were approached over the change of circumstances and the fact that it took a year for the IP to send the letter regarding default, a year where at least some payments could have been made to reduce the debt, the CAB advised him to wait for the creditors to make a move - they could then revisit the situation.