Thinking of leaving IVA

Jimmerp85

Hi guys I’m coming up to the end of my 2nd year in an IVA and I’m thinking of leaving and paying creditors off myself. My circumstances are completely different now to 2 years ago. My payments are going to be increased again this year and I’m going to be paying back much more than what I owed originally. I’ve spoke to IP and they have said that charges etc will begin to amount and I’ll be chased but I don’t see how. All of previous debtors have sold my debts to 3rd party companies who don’t charge interest ? I owed 18 K originally and I would like to think that after 2 years and the amount I’ve paid in already I would have chipped away at it a little bit... my payment is likely to be £500+ after review which if I stuck to Iva next 3 years would be 18k...! I’m sure that my creditors would be chomp my hand off if I offered them payment plans that could pay this off quicker and get them the full balance as my dividend is 71 p in the £ currently ? Sorry for this long post but I’m wondering if anyone has any experience in doing this ?

mwarby

It sounds like a bad idea TBH, your IP has probably paid themselves most of their fees (a big chunk is actually setting up the agreement).

Once you let the IVA fail you would lose all the protection the IVA gives you, and may well find the new lenders seeking to add a whole lot of interest and charges (maybe backdated).You may also find that a failed IVA looks worse credit file wise if you say want a mortgage, than a completed one

It may well be that your IVA finishes in less than 3 years, as it finishes when all the debt and the IP fees are paid off.

Craig1981

agreed with the above

majority of fees are usually collected first in an IVA

you will not pay out more in an IVA than what is owed (plus fees). so when you started, if total debt owed was £18k, plus fees of say £7k, total payable £25k, you will not pay more than £25k

really really bad idea to cancel when you are two years in. why would you want to deal will all creditors yourself? one payment to IVA each month, one I&E each year, and thats that

ultimately decision is yours to make, but would suggest speaking to Stepchange AND NAtional Debtline and get their take on the matter as well

thevdm

I left an IVA after 1 year to go bankrupt instead as that was a better option for myself, after that year of paying £300 a month there was virtually no difference to what I owed creditors (even without them adding backdated interest), in your situation there is a good chance that you may still owe close to the original 18k, especially if creditors opt to backdate interest. It would likely leave you having to pay the same amount but without the protection offered by an IVA.


If your income has increased due to a change in job, make sure your budget covers any extra expences such as more petrol if you have to travel further etc...