IVA stress

Doylie64

Can anyone help?? I'm 6 years into an IVA which was extended until next May due to ill health my mum has passed away and I will be liable for the full debt that I started with regardless of the fact that I have so far paid over £10,500 into my IVA I have been told this is not deducted from the original debt.

foxy-stoat

Doylie64 wrote: »

Can anyone help?? I'm 6 years into an IVA which was extended until next May due to ill health my mum has passed away and I will be liable for the full debt that I started with regardless of the fact that I have so far paid over £10,500 into my IVA I have been told this is not deducted from the original debt.

I am not sure what you mean,

Your IVA was for 5 years at whatever the monthly payments where agreed, including any increases for pay rises.
If you were unable to may payments then either fail the IVA or it gets extended, which is what they have done here, to make up the missed payments.
The figure of £10,500 is meaningless unless we know what the original debt totals where.
Payments do not get deducted from the debt, you pay what is agreed and the balance is written off at the end.

Doylie64

The debt was 28k the IVA has been passed through 3 different companies and 12 months ago when the latest one took over they said I hadn't paid enough in the 2nd year so it was extended. To date I've paid in £10,500 but still owe £28,000 so doesn't any of the money that has been paid into the IVA count for anything.

Tigsteroonie

Doylie64 wrote: »

To date I've paid in £10,500 but still owe £28,000 so doesn't any of the money that has been paid into the IVA count for anything.

The IVA doesn't pay off the debt as it goes along; when the IVA ends, the total of your payments into the IVA [less fees] are then shared out amongst all the debtors as a final settlement.

Doylie64

Ok then if I hand over all my inheritance to clear the debt what happens to the £10,500 that has been paid in.

fatbelly

Doylie64 wrote: »

Can anyone help?? I'm 6 years into an IVA which was extended until next May due to ill health my mum has passed away and I will be liable for the full debt that I started with regardless of the fact that I have so far paid over £10,500 into my IVA I have been told this is not deducted from the original debt.

An inheritance received while the IVA is active is known as a windfall.

If you look at the terms and conditions that you signed it should explain what happens. Some kinds of windfalls have special rules (redundancy, compensation, critical illness payments).

The agreement will require 100% of the windfall to be introduced into the IVA and given to the Insolvency Practitioner for the benefit of all creditors.

If the windfall is of such a large amount as to enable the immediate repayment of all the original debts, before the IVA began, then the agreement will require the full original debt to be repaid along with any outstanding Insolvency Practitioners costs. In addition, creditors have the right to charge statutory interest on the outstanding balances for the full duration of the IVA.

Any remaining funds will then be passed back to the individual and the IVA will be considered to have completed successfully and the Insolvency Practitioner will issue a certificate of completion.

Hope that helps

Doylie64

Thanks for all your answers but do they deduct the money that has been paid in already from the balance or fees there is £10,500 in the pot so to speak or is that just wiped out which is what I've been lead to believe.

fatbelly

Doylie64 wrote: »

Thanks for all your answers but do they deduct the money that has been paid in already from the balance or fees there is £10,500 in the pot so to speak or is that just wiped out which is what I've been lead to believe.

The 10,500 is already in the pot

Doylie64

Thank you from what my IP said at the weekend the money I've paid in doesn't count at all. I feel like I've been mislead from the outset in 2013 I've asked for all the paperwork to be sent to me again as it's changed hands 3 times now. Could this be paid off in a full and final settlement or early completion as they were going to do before my mum passed away they gave me a settlement figure of £3978. but mum passed away before she had chance to pay it.

normanna

Sorry for your loss.
You always owe the full amount in an IVA. Once the full debt is paid which includes fees and statutory interest (if applied) plus your share of house equity (if any) less what you have paid in already then you will be left with what is remaining.

Please read your paperwork and speak to your IP.

foxy-stoat

Doylie64 wrote: »

Thank you from what my IP said at the weekend the money I've paid in doesn't count at all. I feel like I've been mislead from the outset in 2013 I've asked for all the paperwork to be sent to me again as it's changed hands 3 times now. Could this be paid off in a full and final settlement or early completion as they were going to do before my mum passed away they gave me a settlement figure of £3978. but mum passed away before she had chance to pay it.

I don't think you understand how IVA works.

If you negotiated a Full and Final settlement OF OTHER PEOPLES GIFTED MONEY then that is one but if that was never paid and finalized and your Mother has unfortunately passed away leaving you an inheritance then that inheritance should legally be paid into the IVA towards the debt - your monthly payments continue as normal.

What this all means is you will finish your IVA as planned, be it extended for a year, and the rest of the debt is paid off.

You haven't been mis-lead, you have mis-understood or assumed wrongly.

Speak to the citizen advice bureau if you do not believe your IP - they will explain it just as they have.