2 Debts with 1 company

Gemmurphy07

I entered an IVA in 2019. Southern Water were included. I have been receiving letters from UK Search Ltd saying I owe Southern Water money. I advised I am in an IVA and Southern Water are on it. They closed the case. I've now started receiving letters again and when I've questioned why, they said that I have 2 debts with them but only 1 if them is on the IVA so they can still chase the other debt. Is this correct?

sourcrates

You do have to list individual debts with an IVA yes.

You have three ways to respond here, you can try and fob them off firstly, either write and tell them that the balance you stated for your IVA is sufficient to cover both debts with Southern water, (they won`t be able to check this by the way, as they won`t know what you stated in your IVA application).

Or, because you are in an insolvency solution, your budget is very strictly monitored, and further debt repayment is impossible at this time.

If they are still persistent, ask your IP if the debt can be added to your arrangement.

RauHughes

If the debt was incurred prior to the commencement of your IVA then it is automatically included in your IVA, whether or not notice was issued to the creditor (which it was, as a debt to them was already included in the arrangement so they should have submitted a proof of debt to incorporate all outstanding accounts with the creditor).

If the additional claim cause the amount of debt included in the IVA to increase by more than 15% of what you stated your total balance was in your proposal then the IP will have to hole a variation meeting to creditors to ensure they're all still happy to proceed, but there are rarely objections due to this (for example, if you stated your total debt level was £10,000 then if the final admitted claims come to more than £11,500 there would need to be a variation).

If this debt has been incurred since your IVA commenced, then it is not provable and you will need to come to a direct arrangement with the creditor. The IP can allow a budget for this and can reduce your current IVA payments by up to 15% without issue to allow for this, any more and it's another variation.

Finally, if it is a post appointment debt, technically it's a breach of the terms of the IVA (i.e. you incurred more debt which is forbidden without written permission from your IP), and either the IP or creditors could ask for your arrangement to be terminated as a result of the breach. This would rarely happen.

Steps to take are to find out when the debt is from, get a letter/email from the debt collectors or water board confirming balance and the date and get it to your IP who will discuss options.

Don't be bullied and DO NOT pay them any money until your IP has advised you.