Excluding family debt from an IVA

n-1

I've been on the Step Change website and it's advised that the best option for me is an IVA. One of my outgoings is £200 a month to pay off a loan given by a family member which I currently have £4200 outstanding.

Step Change via their automated form have given an estimated IVA monthly amount of £92 and have stated £14 a month is a reasonable contribution towards the family loan.

It is not possible for me to pay less than the £200 agreed as the family member is dependant on that money being paid in order to afford their cost of living. Do I have any flexibility in situations like that?

I'm also worried that the IVA could get refused if such a disproportional amount is going towards a family debt.

John_G_Jones

No, you need to apportion your payments fairly, and not favour one person over another.

Do you honestly think it would be fair to reduce what you pay others who also lent you money or gave you services just because you don’t like it?

sourcrates

Hi,

It could be an IVA is not the best option for you here, it can be difficult with family debts, especially if you are concidering insolvency, as they will only receive a fraction of what you borrowed from them.

Also your bank statements are checked at every review point, normally once a year, so aportioning the money from other allowences can be difficult, and could lead to your arrangement been revoked.

Why not pop over to the DFW forum, post a statement of affairs, then we can see what other options you may have.

fatbelly

I wouldn't put too much trust in Debt Remedy. It's no substitute for the brain of a good adviser. And you've had very good advice on the other thread.

PrettyKittyKat

I have seen IVA whereby the payments are reduced to allow money to be repaid to a family member, then once that finishes the payment is proposed to increase by that full amount, e.g. 21 months at £250, then 39 months at £450. It will be up to the IP whether they are happy to propose it, and then up to the creditors whether they will accept this. The reason why this money was loaned and why it needs to be paid back needs to be explained in the proposal and will influence the creditors decision.