Iva help

Arthurarthur52

I have a friend who I was able to assist in 21 by paying his CT for 6 months. He has said he will repay when he can afford but struggles with MH changed job. In no major hurry. 

He also had 15k unsecured loans in rented property. He was told Iva best option 
soon I may be able to assist him again and wondered if I could approach the companies and make them a cash offer. Both to reduce sum and bring Iva to end but not sure what’s allowed. 

Many thanks 

RAS

Trying to get this straight.

Your friend lives in rented property?
Your helped pay their CT for 6 months?
Your friend has other debts worth £15k?
Your friend was advised to take out an IVA to solve their debt problem?

A few questions. 

1.Exactly who advised your friend to take out the IVA?
2.How did the friend work out who to ask about their debt problem.
3.When did they start the IVA?

My guess is that your friend saw an ad on-line, on TV or even in the papers, saying they can clear 78/82/87/91% of their debt by contacting a firm?

And that firm were just introducers paid to find customer for the Insolvency Practitioners. The IP pays the introducers a fee for each customer.

The fees for an IVA are £6-9k, so the sums don't really add up.

Your friend rents and has no assets (including a car valued at over £2k)?
Has less then £30k in debt, according to the information given to you?
Doesn't have a stable income?
And probably has less than £75 per month spare income, otherwise they'd be paying you back?

They need advise from a debt charity like CAB or stepchange, but my amateur guess is they fit the requirements for DRO, which is another insolvency option which cost £90. 

The problem with the current situation is that if you offer to pay anything, it will go on the IP fees first, not towards his debt. If you have enough, you'd be expected to pay the full outstanding debt and the IP fees. More than he owed.

He needs to speak to a debt charity, seriously consider ending, failing the IVA, and then look at the options.

Technically, a failed IVA could lead to bankruptcy, if any of their creditors wanted to pursue it. But that would cost them a lot more money, and they already know your friend doesn't have enough to pay to make it worth it.

If he ends the IVA, there will be a few calls, letters, texts etc, which is why he should take advice from a debt charity FIRST.

And if he ends the IVA, he needs to put the money he's not paying towards it into a budgeting account, so he's got enough to pay his CT and fund the DRO fees if that's his future choice.

If he doesn't want that, or doesn't qualify, it costs nothing to do a DMP with a charity and it may be possible to get some debt written off on health grounds.

Arthurarthur52

I will see if my money comes through and if so get him to ask some questions stepchange comes to mind. 

sourcrates

IVA`s were meant to be an alternative to bankruptcy for those who could not go bankrupt, such as homeowners, or those with expensive assets to protect.
Unfortunately a lack of proper regulation in the IVA market has seen a boom in IP`s sprouting up everywhere offering these arrangements to all and sundry, promising the world, but in most cases the promises were hollow.

They can make substantial fee`s from selling these arrangements you see, IVA`s tend to last typically 60 months, but are usually extended to 72 months, or more.

This can be due to many things, a rise in your income, an inability to re-mortgage (if a homeowner) non homeowners usually get an extra year of payments as standard, if your income increases, you could end up repaying all of the debt plus fee`s, with no write off`s at all.

Many people are unaware of how IVA`s actually work, and lots fail because of this.