IVA new debt discovered - HELP

Venus1981

Hi all

We recently signed into an IVA with Payplan and our first payment will be due on the 1st September and last for 7 years then equity release. Today my partner found out that HMRC didn't take enough tax last year (even though he's PAYE so we did not see this coming) and owes £1400 which they are recovering at £130 per month. We rang Payplan hoping they could write this debt into our IVA or reduce our payments but they said we will just have to continue paying it and make some cut backs in our budget but we honestly didn't over estimate in our budget and there is no way we can save £130 per month (that's actually equal to our monthly repayments).

Is there anything we can do or anyone we can complain to as we realise the IVA is legally binding?

Thanks in advance

foxy-stoat

If you are paying £130 a month for your IVA and if you knew about the debt prior to starting then the IVA was un-affordable and would not of been allowed.

7 years is a long time if you have to equity release as well - how much equity do you have in your property and how much is the total debt you have?

Venus1981

Hi foxy-stoat, thanks for replying

We found out about the debt today so a month after the IVA was set up (not enough tax was taken last year), when my partner got his wage slip and rang HMRC. The IVA was set up on 23rd July 2018 and the creditors condition was to extend the IVA to 7 years and then release equity (we currently stand at £15000 negative so highly unlikely we will need to do that) debt is £50000 between us.

As I am self employed my tax has been written into the IVA so we thought this could be too?

National_Debtline

Hi Venus1981,


Unfortunately, you cannot normally add a debt into an IVA once the creditors meeting has taken place. I appreciate you weren't aware of this debt at that time, and this is just a very unfortunate situation. You need to check the terms and conditions of the IVA carefully, because a debt being outside of the IVA could potentially be a cause for it failing. When an IVA fails there is a risk of bankruptcy. Bankruptcy can risk your assets, but if the property is in negative equity that will be more complicated. It may not be affected by bankruptcy but realistically, you will need more personalised advice about this.


You can raise a complaint with Payplan about the fact that you weren't made aware the IVA was legally binding, but unfortunately, as you would've needed to sign the agreement, it would've been explained within the terms and conditions that this was a legal agreement. You could ask Payplan if they could give you a payment break from the IVA, whilst you clear the tax debt, but even if they are following the IVA protocol you would normally only get a 9 month payment break, and they may be reluctant to agree to this before the first payment is due.


Can you post your SOA and we can try and offer more help?


Laura
@natdebtline