Debt Management + IVA

Treeen

Hello all from a newbie... I sought out this forum as I am worried about my Mum's situation..

My mum went to a Debt Management company about 5 years ago after racking up debts of around 35k .. The amount owed now is 27k. She was asked if she wanted to do it the IVA way instead (I think she was telephoned out of the blue by the company) .. The way the guy explained it to my mum did indeed sound the better option to become debt free quicker.. But.. As said the debts are now down to 27k but the guy on the phone said it was 37k .. my mum obviously has proof this is not the case. When asked about savings etc.. My mum admitted she had 10k in the bank that her late husband left for the dogs medical expenses (step-dad passed away 2 years ago).. The dog was jointly my stepdad's and step Brother's.. so really the money kind of belongs to my step brother now for the dog.
Anyways.. The guy on the phone said my Mum can only 'have' the IVA if she hands over the 10k and said this was the only reason she was allowed to 'have it'
It just all seems a but funny to me that in the first place they are saying she owes 10k more than she does.. and are now asking her to transfer the dog's 10k to them.. taking the debt down to 27k.. which is what she owes anyway. I have told her in no way should she transfer that money over until she has sought advice. I can't see my stepbrother letting it go anyway as he knows it was his dad's express wish for it to help with medical costs for his pride and joy.

Any advice would be so gratefully recieved as I know if my Mum hadn't have spoken to me about it... she would have just signed it away.

Thank you for reading.

Treen

Charco_2

HINT: There's more than one IVA company out there...

And there are also IVA companies that wont greedily search out any quick value to be had in money that may or may not belong to your mother.

I do think she should consider looking into an IVA - if she had entered one five years ago she would have dealt with her debts by now. Instead how much money has she spent on a DMP now?

Definitely dont rush into giving away the dog money, however, she should really consider the manner in which that money is stored. If is currently in her name then the money legally belongs to her - although if she can show where it came from she may be able to argue in an IVA that it does not belong to her.

Treeen

Thank you so much for your reply Charco.

If I remember rightly my Mum did ask about an IVA 5 years ago but was advised she couldn't proceed with it because of her income. My step dad was alive at the time, so maybe that was something to do with it, I really can't remember the full details. She's paid approx 7k off her debts since then.

Do you think she should maybe apply with another IVA company?

She does worry me, she's a pensioner, not very savvy in.. well anything really and I can see her getting badly burnt by being led to believe everything is done in her best interest.

I think she'd be better off giving the 'dog money' to my step brother as he is the one with the main responsibility for him now, and she has no written proof that the money was left for that purpose.

Thanks again for your reply.

Treen

Charco_2

Could get tricky with the dog money then... old dogs and new tricks doesn't sound good to me! She should stand her ground though (on all instances) if she genuinely thinks she is in the right - she may eventually have to concede something though.

I don't like the sound of her being told she couldn't do an IVA back then but things are so different now... if she could contribute to a DMP she could easily have offered an IVA - it's up to the creditors to accept or reject it, not her "advisors"! (That's just my feelings on it, I'm not in a position to judge her company though!)

I think she should perhaps have a look around and you do right to look out for her - she may not be savvy but at least you're in her corner too!

If she is a pensioner then perhaps an IVA wouldn't be her best option now either (it might be, so certainly look into it but just make sure you know what you're taking on - there might be more to consider than simply what is affordable!)

dancingfairy

I would get your mum - to get a full breakdown from the company she has dealt with - what (if any money they have kept as their fees), what has been paid to creditors and when , whether any agreements were ever set up with the creditors as to whether interest and charges have been stopped etc.
From there I would then get her to seek independent advice on the way forward from - National Debtline ,CCCS (consumer credit counselling service) or her local CAB - or more than 1. IF an IVA is recommended she should then shop around and use info on here to help her make her choice. However there may be other alternatives that suit her better so she needs to do her budget up first and get advice from a free, impartial source first.
df

Treeen

Thank you both for your replies..

I spoke to her about it yesterday.. She then informs me that she's already set it up and has been paying since November (see what I mean about her being forgetful and not really comprehending all the facts??? Grrrr)
She does have statements from the DMC which clearly state the debt was down to 27k. I will get her to ask for the same from the IVA company. She said that she'd had letters from 2 of her creditors to say they hadn't recieved any payment for December and January.. so although she's been paying since Novemember.. it doesn't look like they've been paying the creditors.. hopefully it's just the time it's taking them to sort the paperwork or something.

I too think it's strange she was advised against and IVA 5 years ago.. She was paying the DMC £200 a month.. whereas she's now paying £120 a month.

As for the dog money.. I did say maybe she should give it to my step brother.. She said she was thinking of offering them half of it.

It's getting abit complicated now.. especially with my Mum not really understanding it all, so I think I will get her to get all the paperwork together so I can look through it and seek advice.. just to make sure it's all being done correctly.

Treen