Debtor with IVA - how do we escalate?

TechnoBoy

Hi Folks,

The charity that I volunteer for are owed a few thousand pounds by someone who we have subsequently discovered through our own investigations has an IVA in place due to their debts with other establishments.

The debtor is ignoring our letters, and the debt-collection agency we've used has been useless.

We've written to the company that is managing the IVA, they are ignoring us.

Any tips please on how we can escalate this?

Thanks!

bris

It's possible you are being ignored because you are a debt that has not been included in the IVA process. It needs every one to agree for an IVA to work. You could write to the company managing the IVA again and explain that unless a suitable out come is agreed between you then you will be looking to petition the court to make them bankrupt. The company will not like that because they will miss out on the fees they collect for dealing with the IVA. The downside is though that this would mean you will get almost nothing if the debtor has nothing to give, the threat mighht work though so you might get some thing back.

TechnoBoy

Thank you bris.

The IVA was put in place in 2008 but the additional debt was run up with us in 2010.

I am not sure why this person decided to run up another debt?

What makes it worse is and we're paying interest on our overdraft on the money that this debtor owes us :mad:

bris

In that case a credit check would have shown the debtor to be a bad risk, this may be a expensive lesson on who you give credit too.
Best of luck though.

TechnoBoy

Hindsight is a wonderful thing!

The bad debt policies have been tightened up and we tried to help the person in question - it won't happen again!

Savvy_Sue

If the debtor has no means of paying, you don't want to spend too much money on chasing them.

So you may end up writing off the debt, at least in your accounts.

And you say that you've tightened up the bad debt policies, however you also need to have this person 'flagged' in some way so that even if they're no longer showing as a debtor (because written off) you don't lend them any more.

We lend bus fares to our clients, which I know is on a different scale, however they sign a sheet to say they've had a bus fare loan, and they don't get another unless they repay the first one! They are quite good at 'forgetting'.

TechnoBoy

We know the person has some money to repay over time ... it's a case of finding the right mechanism to get them to cough up!