Is IVA suitable for me?

jillyflower

Hi, I've just read martins guide to IVA and he says it's an arrangemint to pay off money to banks and credit card companies. my question is that most of my debt is owed to small suppliers to my now closed business (sole trader). Therefore they are not currently charging me interest and if i could carry on paying them what i have already offered to pay them i could manage to pay my small c.c. debt £380 without any problems. Not sure if this is ethical or allowed. The arrangement I have at present with the suppliers is just what I have agreed with them unofficialy. All help advice would be greatfully recieved as i don't seem to be able to see the wood for the trees at the moment. Thanks Jill

robert71

Your suppliers don't want you to have an IVA or go bankrupt as they will get next to nothing. They should be happy to receive a small monthly amount. This should be paid on a pro-rata basis i.e. if you can afford to £200 a month, the creditor accounting for say 75% of the debt would get £150 a month. Make sure you write to them all explaining how much you can afford and what you propose to do in order to avoid bankruptcy or and IVA. Keep all conversations in writing. Keep up the payments on the CC and you should hopefully be OK.

jillyflower

Hi thanks for the info.

I have just had a letter from one of my suppliers thanking me for the 2nd installment but also saying that it wasn't enough and if I didn't pay more they would take legal action.

When I wrote to them in the first place I enclosed a copy of my income and expenditure, which shows that although they are owed the least just over £400
they are getting the same amount each month as people I owe more to ( I realise this is not what robert71, said to do but I had arranged this a couple of months ago).
My questions are: 1. What should I do now, how do I respond.
2. If they do take it further and it's proved that I really can't afford any more each month would I have a CCJ on my credit file.
Hope someone can help.

Thanks Jill

Gumption_Brash

Just been reading a small article on MSN uk about IVA.

The thing about an IVA is that although you try to come to an agreement, quite often, as has been hinted above in posts, the lender will try to set the terms, and the amount you pay back. Also other lenders tend to look unfavourably on an IVA, and some count it as bad as declaring bankruptcy. I would refer to a third, and impartial party, to negotiate. (you know, citizens advice, blah blah)

Also you need to read up on your rights, when it comes to paying back debt. Most lenders, in a dispute, use a lot of unsettling tactics to scare you into paying what they ask. - It's rubbish, arm yourself with information, and don't let them blind-side you. You will find that the amount you HAVE to pay back will be less than you fear.

The other side of it, is that your situation needs to be painted clearly to the lender. If you have confusing or contradictory information, it will make it more difficult to come to an arrangement. Lastly, if you can, speak to a supervisor (be firm about it) then do so. - Generally the first people you speak to are not trying to help you, they are trying to get as much money for the company as is possible. A supervisor is different (different pay scales), and much more able to deal with your situation/terms of your proposal.

Hope that help somewhat,

For what its worth...


Oooh, forgot to say, the lender cannot refuse a payment. Whether large or small, they are obligated to accept what you offer. They may take you to court if it's not enough/what the agreement was or whatever, but you'll find they are reluctant to take you to court (costs them loads). And in anycase the court would make an individual assessment of your means and order you to pay very little in comparison to what the lender asks....might not be relevant to what you want to know, but hey.....

jillyflower

Thanks GB, I don't think I've explained myself very well, so I'll try and be more clear.

The suppliers that I owe money to are only small local firms who don't have call centers etc., and they are not refusing payment just saying it is not enough although I have sent them a copy of my income and expediture and they can see from that the my husband pays all household bills and my only income is child benefit and JSA, which I have devided up between everyone I owe money to plus my car insurance, £10 prescription fee which I have to pay every month and £10 for my contact lenses. This is the only money I take out of income other than to pay debts.

Gumption_Brash

jillyflower wrote: »

Thanks GB, I don't think I've explained myself very well, so I'll try and be more clear.

The suppliers that I owe money to are only small local firms who don't have call centers etc., and they are not refusing payment just saying it is not enough although I have sent them a copy of my income and expediture and they can see from that the my husband pays all household bills and my only income is child benefit and JSA, which I have devided up between everyone I owe money to plus my car insurance, £10 prescription fee which I have to pay every month and £10 for my contact lenses. This is the only money I take out of income other than to pay debts.

- This is what annoys me with lenders. They want all these details, how much bills you pay, what you've got left over etc. Then they make a decision based on that. Trust me they don't care if you have enough to feed your family. Also they don't care about any other companies debt either.

-I would be wary of mentioning your husband's income, unless he is a part of the agreement. Lenders like to take joint finances into account....

This situation could very well become a stalemate. You will be unable to give them what they want, and they will be un-willing to accomodate your situation.

My GF is in a similar position. She owes two companies. Luckily one has accepted her terms, the other keeps on phoning her saying she has to 'up' her payments to meet a certain percentage, and they keep on asking her for details on her finances. Then the conversation is over and they send her a letter with all these additional charges due to 'unpaid fees'. So she phones them again and say she needs to fill in forms, then it gets sent off, and the next week it starts all over again.

My advice, like I tell my GF: 'You will be paying for these loans forever, unless you can increase the payments in someway you won't see the end of the debt. OR you can get someone to intercede on your behalf, at least get the interest to stop, and then pay what you can.'

I know what its like, and it can be really frustrating. Just try to remember that there are ways out of it. Talk to these people, go to their business addresses and talk to someone who can help. And if they won't get some real advice.

Good Luck.;)