Took an IVA, Now stuck between a rock and a hard place

Savingmonkey_2

Hi All im new, Ill keep it sort i promise but id like some opinions on something.

I took out an IVA in 2008, No assets to declare, No house, no car, absolutely nothing to my name. I messed up big time when i was younger and for the last 5 years ive been trying to get my life back on track and until today it seemed to be going really well.

I came into some money through the sale of a product ( i wont say what it was if you dont mind ) . I then thought i would do the sensible thing and ask for a final value settlement to settle my IVA and really give my self a boost in finances, I phone the IVA people only for them to ask where the money came from and so i told them, they then said "well that sale is classed as an asset and therefore you could be made to put that towards your IVA but then still owe the same amount"

I didnt have this asset when the contracts were signed and if i had known they were going to do that then i wouldnt have declared it but being an honest person and someone that saw this as the fastest, easiest way out of debt i thought this was a great idea.

Im now in a situation that i could loose the lump sum and still have the normal monthly payments for the next year and a half that i cant really afford.

I thought by taking the IVA i would make myself feel better about repaying the money that i wasted instead if bankruptcy and instil some self respect in a funny kind of way. ( which it was )

Now however i feel if they come at me and say thats what they are going to do then im considering just throwing in the towel and instead of just giving them the money im considering just going bankrupt and using the money to pay the fee's.

As i said i have no assets and i live with a very generous girlfriend who has provided for me while things have been bad. paying off this IVA was so that we could start a family and i could then contribute towards the house properly.

What would you do ? Is what they are doing even right ?

FoggyBrain_2

Presumably they are treating this as an after acquired asset, which you are obligated to declare and pay into the IVA. This increases the dividend the creditors get, but does not shorten the term. This will be mentioned in your proposal. Different IP's do seem to treat these things differently.

As regards going BR, that is, indeed, an option. However, you will probably find yourself with a payment order to pay over all of your disposable income (if over £20 a month). I believe the allowances in BR are a bit stricter, so you could find you will be paying a little more than you pay now, for another three years. Your credit record will also be ruined for 6 years from the date of discharge.

At this stage of the IVA you are, indeed, between a rock and a hard place. If you get a payment order you will be worse off financially in the long run, the lump sum would be gone on fees anyway, and you will have added three years to your ruined credit record.

What you eventually decide is, of course, up to you. But, since you asked what would we do ..... I would hand the money over and finish the IVA as normal. Yes, you would have paid more off your debt than you originally planned, but I am guessing a lump will still be written off at the end, and you have been saved from paying Lord knows what in interest in the meantime.

Savingmonkey_2

Yeah i was wondering whether that was the case, The only other option i have is to forget this two an half grand lump sum ( which is really hurting me to forget that amount of money) and take the offer from a very good friend who's financially sound to gift me the remaining 4 grand whom i would repay in my own time. Thats assuming that if this friend gave me the money there isnt a magic rule to say the IVA people would then declare that in the IVA too ?

FoggyBrain_2

If your friend gifts you a lump sum your IP will probably need a letter from them stating that the money is being offered for the purposes of a full and final settlement only. It is important to state categorically that, if the offer isn't accepted then the money will be retained by the friend and will no longer be available. They cannot grab what you haven't got !