Level of debt for IVA

edited 30 November -1 at 1:00AM in IVA & DRO
4 replies 925 views
Mrs_pbradley936Mrs_pbradley936 Forumite
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edited 30 November -1 at 1:00AM in IVA & DRO

Some of you may know that my son had and IVA which failed recently. He was paying £200 per month and it ran for almost 3 years. Does anyone know what his level of debt was likely to have been (is there a calculator for this?). Also what is likely to happen a) to the money already paid in and b) going forward.

I do want to help him but do not want to throw good money after bad plus whenever I have bailed him out in the past he does not mend his ways and as I have mentioned previously I am growing weary of it.

I have bought his house from him so it cannot be taken and am seriously thinking of leaving the house to my grandson (my son's son). Any advice would be welcome.



  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K Posts
    Hi Mrs P

    Fees for IVAs can vary significantly between different insolvency practitioners (IPs). Even within the same IP, fees may vary from one arrangement due to the next, depending on their complexity and the amount of work required.

    It ought to be possible to ask his IP for an itemised statement, showing where the payments have gone.

    Over almost three years @£200 a month, he will have paid approximately £7,000. I would guess that a good amount of this (if not the majority) will have been swallowed up in IP costs. The failure of the IVA itself usually entitles the IP to claim additional expenses for carrying out the administrative formalities.

    Anything over and above these costs should have been distributed to his creditors on a pro-rata basis. Bear in mind though that with the IVA having failed, the debts will now be recoverable in full once again and the reduced figures set out in the IVA will no longer apply.

    What will happen going forward? That is hard to say as I don't know the ins and outs of your son's situation. A lot of people whose IVAs fail end up going bankrupt as it is often the only route left available to them. Whether that is appropriate here would depend on a few things, among them:

    - Whether he has any assets at risk. If you bought him out of the property at market value, there should be no comebacks on that side of things. Any cash he received as a result could be claimed by the Official Receiver as an asset in bankruptcy.

    - Whether there is anything else endangered by bankruptcy, such as a job. His credit file would be heavily affected for six years but let us assume that by now he has ceased to worry about that.

    Are you (or he) in a position to post an up to date Statement of Affairs here, as it would give a fuller picture of his predicament and enable us to advise you in more detail. Link:


    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • mwarbymwarby Forumite
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    IVA payments don't work like that. The payments are designed to be all the money left over after essential expenses. For some IVAs all the dent is repaid, for others only 1%, the common factor being it's all the spare money for 5-6 years plus a share of any equity in your home.

    The money goes to cover IP(Insolvency Practitioner) fees first, then debts.

    The failed IVA allows creditors to add charges that would have been suppressed during the IVA. This may well mean the debt level is as high or higher than when he started. At the end of a successful IVA any debts remaining are written off

    IVAs are supposed to be an alteraltive to bankruptcy, so this maybe his only option. If the IVA hasn't formally failed you could try and keep it going, or propose a full and final if you want to bail him out(would need to be around monthly payment x payments left).

    If the IVA has failed you might be able to arrange a second, but this would be very difficult(as he couldn't complete first, and debts maybe higher)

    Hope this helps
  • mwarbymwarby Forumite
    2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    just to clarify, I was replying to OP, not national debt line (didn't see post till I had posted)
  • Mrs_pbradley936Mrs_pbradley936 Forumite
    14.4K Posts
    Part of the Furniture 10,000 Posts Combo Breaker
    Than you for the replies. Honesty is not a strongpoint with my son so I have never been able to sit him down and find out exactly what is owed and to whom. I fully agree with him that it is his business and not mine or his fathers but when I am called upon (in desperation I might add) then I want to get to the bottom line but all we ever have is a family row over him spending on what we never would.

    It is taking an emotional toll not just on us but on his partner too. I want a tool that will let me wash my hands of it all without guilt or worry!
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