Advice needed please re debt missed from IVA

DrowingNotWaving

Hi

Please be kind. I need advice.

I have been in an IVA since October. It is in my name alone but I included a £360 joint overdraft that was in mine and husband's name. Or so I thought. It appears to have been missed off and stupidly I have not noticed until now.

I called my IP who said to send them a copy of the bank statement from October and they will include it. However husband will still be liable which explains the debt collection letter he received last week in his name only. It is demanding over £2300 which is the original £360 debt plus interest and charges since October.

What is our legal position on this? We would be happy to pay back the £360 in manageable installments but I feel sick at the thought of almost £2k in charges and interest.

Can anyone help? Please?

Charco_2

Love your name by the way!

"I was much further out than you thought
And not waving but drowning."

And speaking of being further out than you thought... £2,300 from £360 in five months?

Not so much an IVA question as a general "I'm being shafted" question... would be worth posting over on the Debt Free Wannabee board - but hopefully i'll be back with something more helpful shortly!

Charco_2

Your husband needs to go back to the company to ask for a break down of the charges on this account. Explain to them that you have a statment from October showing a balance of £360 and would like to know how they have arrived at a balance of £2,300 a matter of months later.

Threaten them with a complaint to the ombudsman (which i believe will result in a £500 charge for the bank whether the complaint is right or wrong).

Be proactive on it and don't simply accept what they tell you!

DrowingNotWaving

Thank you. I'll do that.

samace83

Hi
I really hope you manage to get this sorted - that's a big jump in money in 5 months!

Charco- what is the legal position on this? Can a debt be added to an IVA after it has been submitted to a court and the creditors? I ask as I thought an IVA agreed to pay back so many pennies in the £, so if you pay off one debt in full would the other creditors know this? This is something never fully explained I think....

Drowningnot waving- I hope you manage to find out where the bank has got that figure from. That's a heck of a lot of charges and interest!

Sam

DrowingNotWaving

Thanks Samace

Charco_2

Charco- what is the legal position on this? Can a debt be added to an IVA after it has been submitted to a court and the creditors? I ask as I thought an IVA agreed to pay back so many pennies in the £, so if you pay off one debt in full would the other creditors know this? This is something never fully explained I think....

Good question

Yes you certainly can include a debt after the creditors meeting SO LONG AS THE DEBT PRE-DATES THE DRAFTING OF THE STATEMENT OF AFFAIRS (as in, you didn't run up the debt AFTER your IVA started). Also, provided the new debt isn't more than 10% of the overall debt or doesn't decrease the dividend offered to creditors by 10% or more... If it is bigger than 10% then it would require a new vote and new creditors meeting and so on!

However in this circumstance the debt is JOINT with the husband who is not in an IVA so the debt must be repaid in full by him anyway! You still have to include the debt in the IVA and over the course of five years you will pay XXp in the £ but more than likely your husband will have paid the debt anyway so the IVA wont affect this new creditor (they wont get paid twice, as they'll have to submit a Proof of Debt for the dividend).

I am going to hazard a guess that this debt was a "buy-now-pay-later" debt that has gone passed it's repayment date and so all interest that wasn't previously included has now been included!

DrowingNotWaving

Hi Charco

Forgive me, I don't understand what the last sentence means. The £360 was the overdraft on our joint bank account. We stopped using it as we set up a new account with a different bank when I took out the IVA. They have since closed the account and applied almost £2k in interest in charges. Is that usual?

Charco_2

Oh hell no!

Sorry, i forgot that you'd already said it was an overdraft. The only way i could understand for it to have moved from £360 to £2300 in five months was if it had been a buy-now-pay-later deal (like for a sofa or a tv) and instead of you paying later they have applied all the interest accrued... sorry forget that, it's gibberish ha ha!

No, there's no reason why a £360 overdraft should now read £2,300 - have you had any indication of charges being applied over the last few months?
It was £360 in October so did they write to you in November to say it's now £600? Or December to say it was now £1,000? Or January informing you... you get the picture!

It was nice of them to close the overdraft account and move you onto their unique, for special customers only, 550% interest rate account!

DrowingNotWaving

I vaguely remember a letter saying they would apply a daily charge until the overdraft was repaid. This was before Christmas but I shredded the letter because I stupidly assumed it was all in hand. I have already complained to my IP that they did not mention that my husband would still be liable.

If we contact the bank and offer to repay the £360 but not the interest and charges, would they have to agree?

Also could I go directly to the bank? Debt collectors scare the hell out of me.

Charco_2

Ha ha Debt collectors are !!!!!cats! They buy the debts for a pitance and are happy to get anything back... the longer you ignore them the more desperate they get!

Doesn't mean you have to accept what the bank says though... you owed £360 and they closed your account so suppose the overdraft charges don't apply. Stick to your guns and don't just accept what anyone says is gospel... always report back here (or the debt free wannabbe board for advice)