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IVA trouble?!
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StartingLine
Posts: 2 Newbie
in IVA & DRO
Long time reader, first time poster.
Worried for my brother. Seriously worried after google searching.
In year 2 of IVA - total debt was £60,000 (I believe-around that) He just got cash inheritance of £90,000. He said he rang IVA and told them he was getting it. They never called back and he didn’t either. In 4 months he has blown nearly £85k.
I had no idea he had an IVA let alone the shock of all the money gone.
After googling it, I read it could be a prison sentence?! Now I’m worried. He doesn’t seem to bothered.
Would the IVA find out if he never says anything? Should he be honest and call them to help himself out?
Worried for my brother. Seriously worried after google searching.
In year 2 of IVA - total debt was £60,000 (I believe-around that) He just got cash inheritance of £90,000. He said he rang IVA and told them he was getting it. They never called back and he didn’t either. In 4 months he has blown nearly £85k.
I had no idea he had an IVA let alone the shock of all the money gone.
After googling it, I read it could be a prison sentence?! Now I’m worried. He doesn’t seem to bothered.
Would the IVA find out if he never says anything? Should he be honest and call them to help himself out?
0
Comments
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Hi,
Ouch, he`s blown 85k already, err, I don`t know what to say about that, I think the worst that can happen is the IVA would be revoked, and he could be made bankrupt.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
Jeez what on earth has he spent 85k on in that time?
He needs to fess up and be remorseful. He will need to explain where the 85k has gone and offer something to his creditors to compensate (e.g. 12 month extension of the IVA). Best case scenario the variation is accepted and they extend his IVA, worst case they reject it and instead petition for his bankruptcy.
i saw IVA's where people did similar (although not to the same amount, I think theirs was a 60k pension payout that they spent on holidays and work on their home) and their offer of extending payments got accepted. However, I've seen people do less (not pay in addition monies of 20k due) and the creditors rejected their offer so the IVA failed and the creditors were free to petition for their bankruptcy if they wanted.
Does your brother have an asset he was protecting in the IVA such as a house with equity?0 -
He doesn't own a house. He rents privately. He went on holiday. Bought a few cars. Weekends away. He wouldn't question spending £200 a day just because he could. He also got himself into further debt with electric/gas after the IVA so paid that off. A lot of boy toys you could say.0
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Ok, his first step is selling the cars and boys toys to try and regain as much money as possible. As he is unable to manage his money efficiently he should put this in a separate account, or maybe even someone trusted can keep it separate for him until he has recouped as much of the money as possible. Then he can call his IVA company fess up and pay in every penny he can - this would at least look good to his creditors that he was remorseful and tried his best to recoup and pay in what he could.
With his inheritance he would have been able to repay 100% of his debt and the fees of the IVA with some left over. Depending on how much he has recoup and how uch he has already paid in he may even be able to pay 100p in the £ (i.e. fees plus debt) and his IVA will conclude with no penalties.
However, does your brother even want to do this? I notice you are asking and not he. Does he realise he's made a mistake? It seems he still hasn't learnt how to manage his money and spending responsible despite the IVA.0 -
If you got the same inheritance then 100% do not spend anything of it "helping him" out of this situation - nothing will be learnt and he will not be able to manage his money for the rest of his life.
I do not believe he will ever go to prison but he should use this as a wake up call.
Good lucks0
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