IVA failing

shopaholic2

Hi, I stated an IVA in February this year with Payplan and I’ve always been a bit sceptical about it as I think I was panicking so much I just agreed to to do as they said. My debts amount to just less than £6k
Anyway I’m on benefits and will possibly lose them soon, so my Iva will fail, what happens then? Do the creditors file for bankruptcy?
I know I need to speak to Payplan but I find them a bit difficult and I now wish I’d not just jumped in with them.

MovingForwards

Do you rent or own your own home?
Any car or asset worth over £1k?

Thinking a DRO might be better.

Why did PP recommend an IVA for £6k of debt when you are on benefits?

shopaholic2

I own my home. I don’t know why they recommended it but am I stuck with it? It’s the fact there’s a charge on the house if we re mortgage or sell that’s worrying too.

MovingForwards

Ok DRO and bankruptcy are out as your house will be at risk. The risk isn't worth it for £6k!

It's highly unlikely a creditor would apply to make you bankrupt, but they could commence litigation, obtain a CCJ and potentially put a charge against your house for it. Usually, it's £5k + for a debt for a solicitor to even think about the charge due to the costs to them involved in doing it.

Is anyone else named on the title deeds?

You need a debt management plan, even if it's just paying your creditors £1 pm.

How many creditors?
How much is owed to each of them?
Are they still with the original company?

What benefits do you have and why do you think they will be lost?

I'm trying to get the correct overall view of what's going on, then can offer suggestions or members can give advice on both the benefit and debt side.

PrettyKittyKat

An IVA is definitely not a suitable option when you only owe £6k!

However you have already started one so you need to consider how to move forward from here. Is there anyone you know that may be able to offer a full and final settlement? If your benefits stop longterm and you no longer have a DI then a small full and final lump sum offer may be tempting to the creditors.

If your benefits are going to stop.... how are you doing to live? Will you then be looking for employment? If yes then payment breaks whilst you look for work may be possible.

shopaholic2

Hi thanks for the help. My husband is also on the dress, all my debts are still with the original creditors, I’m not sure off the top of my head the exact amount owed but I’d like to know how (& if!) I can get out of the IVA and start again! Would Payplan help or would I be better trying with step change or someone?
My benefits are DLA and ESA, I’m currently being retested for both and fear I’ll lose them due to the government being the way they are!
If benefits stop I’ll have to look for work as I won’t survive so I need a payment break. Would Payplan let me do that? Thanks again

sourcrates

I`m quite shocked Payplan would recomend an IVA for a 6k debt, especially when benefits are your only income, I would say you had a good case for a mis-selling claim here, one of the pre-requisit`s for an IVA, is a stable income, as you need to make the regular payments for 5 maybe 6 years, you cannot be expected to do that when benefits are your only sourse of income, as they can be stopped, or redetermined at almost any time.

Set out your case in writing to the creditors, say your income will stop shortly, you believe this arrangement was not right for you in the first place, and even though you have only made a few payments to the pot, would they concider accepting the balance as full and final settlement of your arrangement.

You would need to make them believe this was the best option for them, as otherwise they will get absolutley nothing when your benefits stop.

Its unlikley they will make you bankrupt, no income, no IPA possible, your husband being named on the deeds procludes a charging order, but they can obtain a restriction.

Ideally, you may be best off continuing with it, how much is the payment ?

Could you not do some light work, i`m sorry, I don`t know what your limits are.

PrettyKittyKat

It is easy to find the amount owed - it is stated on your creditors meeting outcome report when your IVA was accepted. Have you got this to hand to check?

From what you have said you are starting to worry about something which you don't know will happen yet. Your benefits re being reassessed and you are making an assumption - they may not stop so all this worry is for no reason! If I was you I would wait the outcome of the assessment first. If it is that they stop you can provide this evidence to paypal and ask for a payment holiday to be authorised whilst you seek employment. You can also go three months into arrears before your IVA is in breach so you will have plenty of time to consider your options IF your benefits stop and you can't find work. You won't need to make any rash decisions.

Also, I hope you don't take offence to this question as lots make this mistake..... are you definitely sure that your TOTAL DEBTS before you started the IVA were only £6k and not that the payments you will be making to your IVA will total £6k over the 6 years? (ie you are paying £100 per month)