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I’m
Confused
Struggling with my IVA and wondering if a DMP would be better for me
Hi. I am in an IVA but struggling with the payments & also have a substantial amount of equity in my property. I have recently been contacted by a DMP who have offered to halve my IVA payments which would be such a boon for me right now. On paper I look to be able to make my payments ok however I hate the thought of being controlled by my IVA i.e I can't earn overtime without it being included plus I may want to sell my property within the next 2-3 years & I have been told that a settlement figure from a DMP may be more beneficial to me than continuing with my IVA.
I owe £25k, have £70-£80k equity in my property & am only 7mths into my IVA.
What will happen to me if I go ahead with the DMP & let the IVA fail? Can the courts make me bankrupt? How do I find out if there is a clause in my IVA such that my creditors can force me to go bankrupt?
I owe £25k, have £70-£80k equity in my property & am only 7mths into my IVA.
What will happen to me if I go ahead with the DMP & let the IVA fail? Can the courts make me bankrupt? How do I find out if there is a clause in my IVA such that my creditors can force me to go bankrupt?
Official
Response
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EMPLOYEE
1As you have been declared insolvent (when you entered an IVA) it may not be an option to simply have your IVA terminated for you to enter a DMP instead. There is a high chance that there are clauses in your agreed proposal which suggest that the Supervisor may be able to petition for your bankruptcy should you default on the IVA. You should have a copy of your IVA proposal document, which will include any clauses, modifications submitted by your creditors at the time of your creditors meeting, and the standard terms and conditions. If you don’t have a copy of this, the next step would be to contact your Insolvency Practitioner to discuss directly.
If you decide to stick with your IVA we would recommend you speak to your Insolvency Practitioner anyway and explain that you are struggling - they may be able to find a way to help you manage better.
If you’re still unsure about what to do, feel free to call one of our advisors on 0800 019 2095 who will be able to discuss your personal circumstances in more detail and find out the best option for you.
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Hi Susan, thanks for your question.
We are looking into the best options for you and we should have some more specific advice for you soon.Comment -
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EMPLOYEE
1As you have been declared insolvent (when you entered an IVA) it may not be an option to simply have your IVA terminated for you to enter a DMP instead. There is a high chance that there are clauses in your agreed proposal which suggest that the Supervisor may be able to petition for your bankruptcy should you default on the IVA. You should have a copy of your IVA proposal document, which will include any clauses, modifications submitted by your creditors at the time of your creditors meeting, and the standard terms and conditions. If you don’t have a copy of this, the next step would be to contact your Insolvency Practitioner to discuss directly.
If you decide to stick with your IVA we would recommend you speak to your Insolvency Practitioner anyway and explain that you are struggling - they may be able to find a way to help you manage better.
If you’re still unsure about what to do, feel free to call one of our advisors on 0800 019 2095 who will be able to discuss your personal circumstances in more detail and find out the best option for you. -
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i got my monthly IVA payment reduced because we were struggling. We still found it difficult some months especially if an unexpected bill arrived (car repairs ,etc) but we stuck with it & we finish our 5 years in november.
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Hi Susan
I hope that you have managed to get some advice on this.
First question - how are you insolvent if the amount of equity in your property is greater than your debt? Even if your partner/husband jointly owns the property and discounting at 85% it still leaves with a modest £29k. Enough to clear your debt. I dont understand how you are insolvent, hence my recommendation would be to speak to your Insolvency Practitioner first as the creditors may have a clause in the proposal seeking equity release in the 4th/5th year. As your creditors are now aware that you have a substantial amount of equity they may pursue a charging order and debt management would not allow you automatic protection against this type of legal action/enforcement.
I am not an employee of Cleardebt.
Arif Patala
Concerned about individual debt in the UK -
