Failed IVA

emma_829

I’m sure this has already been asked, but I wanted some specific guidance for my partner. About two years ago my partner was in another relationship and it turned out his ex had taken out a large amount of credit in his name. She didn’t work and had been concealing the late payment letters etc. She only told him when the creditors were in the process of taking court action and bailiffs attending the property. The debt was just under £10,000.00. 

In a panic, he googled about assistance with debt and called the first number he found for a company offering to write off some of the debt. They subsequently sold him an IVA as being his best solution and never having been in this situation he trusted them. He is pretty honest that he had no clue what he was signing as he is dyslexic and it wasn’t explained to him.

Two years later, I checked the insolvency register and have noted that his IVA is listed as failed in November 2020. We rang the company that are now looking after his IVA as it recently changed hands for the second time. The company advised it failed as he didn’t declare his overtime and all they could do is send a list of creditors and he could contact them directly. They said they contacted him by email, but no such email has been received. 

Firstly, can they fail it when he had no notification that there was an issue? 

Secondly, will this now show on his credit file for six years from the date it was listed as failed? 

Third and finally, do any of you believe an IVA was mis-sold and if so, is there anything we can do? 

My opinion is a debt management plan would have been a better option and had he spoken to a charity this would have been the option they suggested. I’d also believe that had they advised him of his obligations rather than just gave him a written document he would of understood the requirement to disclose his overtime. His debt hasn’t really be reduced either, after paying 400 a month since December 2018 his debts still at around £5000 although they weren’t specific on the exact figure as he now needs to ascertain this from individual creditors. As such, I can’t see how a significant portion of the debt was wiped off. I’ve told him to call Stepchange to see what solutions they propose, but he is of the mind that he offers them all a percentage to settle the debt. I’m not sure if this may further impact his credit record.  

fatbelly

Does he have a lump sum available to make percentage offers in full & final settlement?

If he does then this sounds like the best way forward and he did well to get out of the IVA

I doubt he'd get anywhere with alleging misselling (even though probably true because an IVA for 5k is ridiculous)

The IVA entry on his credit report stays for 6 years from the start date of the IVA. Full & final settlement won't make any difference to that.

He may find that the debt owners now are not the ones that he went into the IVA with - there are companies that buy insolvency debts. They should be open to a deal. See who gets in touch.

emma_829

fatbelly said:

Does he have a lump sum available to make percentage offers in full & final settlement?

If he does then this sounds like the best way forward and he did well to get out of the IVA

I doubt he'd get anywhere with alleging misselling (even though probably true because an IVA for 5k is ridiculous)

The IVA entry on his credit report stays for 6 years from the start date of the IVA. Full & final settlement won't make any difference to that.

He may find that the debt owners now are not the ones that he went into the IVA with - there are companies that buy insolvency debts. They should be open to a deal. See who gets in touch.

Thank you for your response. Yes I thought it might be difficult to prove it was missold. 

We have some that could be offered as a settlement and then if they won’t accept as full and final could do a payment plan for remaining balance. My concern was if they accept less than the full amount outstanding, as I presume they may now add interest since the IVA failed, that it will only be listed as a partial settlement on his credit file. Meaning he has more bad markers on top of a failed IVA. Not a problem now, but we were hoping to put him on the mortgage once the IVA dropped off his credit report and he had time to build his credit back up, say 5 years time. Anything added to his report that’s negative now, will then likely be showing when we get to that point. 

flipflopflo

How old is the debt? Is it on his credit files?

emma_829

flipflopflo said:

How old is the debt? Is it on his credit files?

The most recent default/ccj was issued about 2 years ago. 

ManyWays

I like Fatbelly's suggestion to wait and see who gets in touch. If it is a debt collector and there isn't a CCJ, then ask them to produce the CCA agreement for the debt, see  https://www.nationaldebtline.org/fact-sheet-library/credit-agreements-getting-information-ew/. Debts in IVAs are often sold for very low amounts and the debt purchasers may not be able to get copies of the original lending documents and that would mean you don't have to pay this. 

fatbelly

I agree with the above. Don't go digging. Let them come to you and then see what they can produce.

Your thinking is a bit off re the credit file. The IVA is going to be there for 6 years and is an insolvency mark so will have a big impact..

Each debt would have been defaulted at the IVA date or before and the entry is deleted after 6 years from that date regardless of what you do.

So the credit file is messed up for 6 years. The game now is to sort out the debts as cheaply as possible while saving on the side.