Credit card open through IVA

[Roytoner]

Hi

I have been under my IVA for the last 3 years. I had problems during the first year, so agreed a variation with my IP which extended the term to 6 years. Past the half way point now, yippee!

During my IVA there is one credit card which has remained open. Not sure why it wasnt mopped up at the time. I have used this on ocassion and the balance on it is a fairly significant £4,000. Having said that, bearing in mind my IVA was for a huge debt of £160,000 (monthly payments £1,400) this perhaps isn't so significant after all.

Bearing in mind I am approx 2 1/2 years off the end of my IVA I am wondering what my best course of action will be.

To help me, is there an IP out there who can confirm to me what methods are used at the end of the term by the supervisor to check whether there has been credit entered into? Is a credit check done?

If there isn't then I may at this stage just let sleeping dogs lie and just pay off the minimum payment.

If the IP checks my credit history then I need to know what my best course of action is. If I settled the debt in full now (not sure how but lets assume I have a fairy godmother) would the settlement be shown on my history in 2 years time, thus causing me problems re preferentila creditors etc?

I'm really worried about this. I checked the wording of my IVA last night and it appeared that the Supervisor would see this as a serious breach of my IVA. Would he therefore fail it?

[MelanieGiles]

Hi Roytoner

Sorry I have to disagree with your logic as to £4,000 of credit being incurred post-IVA. This is in direct contravention of the terms of your IVA, and I just wonder how you have been servicing the repayments when your are fully accountable for all expenditure to your IP.

An IVA is an agreement of honesty and trust between IP and debtor. You must have been advised at the beginning of the IVA, that credit without your supervisor's express permission was not permissible, and as you say this is clearly stated within the IVA proposal, so your IP will obviously not be happy to learn that this has occured.

My advice would be to discuss this with your IP, and this may breach the terms of the agreement, but best to be open and honest about it rather than waiting for something to happen. If you can then find someone to pay off the balance for you, you could always pay them back once the IVA has concluded.

Probably not the advice you want to hear, but clearly this is an issue which needs to be dealt with.

Incidentally is that your real name on your profile, as I cannot see you listed on the Register of Individual Voluntary Arrangements. Are you sure that you are actually in an IVA?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Skipper]

Hi Roytoner, I assume you are in an IVA

I have back Melanie on this.In my IVA I could take out a small credit for replacing household ultilities ONLY as long as it doesn't affect the IVA payments. But if you have CC undeclared with your IVA with 4K as opposed to £40 on it - it is difficult to see how this could be satifactorily explained.There is 'gentlemans/ladies agreement' between creditors and debtors and the INTERGRITY factor is of uptmost inportance in an IVA which is not often spoken about here.IPs often have to vouch and 'declare' their opinion of IVA candidate before they are put through. Your word is your bond

If you look at how the 4K was spent maybe your IP may understand. But don't hid it any longer.



<<My motto:I am proud of black culture and is against racist bigotry>

[Roytoner]

Thanks for your responses. I completely understand where you are coming from on this. Not sure how the credit card wasn't mopped up at the outset. I think it was the only one which wasn't taking me to court at the time. As far as taking more credit on it during the IVA, this has been minimal. If my memory serves me correctly. I am pretty sure the balance was approx £4,000 at the time the IVA was being arranged.

Yes, I am in an IVA, and yes, I'm sorry, I have put an alias for my name as I would like to protect my identity. It appears that so many unscrupulous Companies scour the registers and forums such as this touting for business.

Going back to my original question. At the end/towards the end of my IVA will my IP do a credit check to see if there has been any further credit taken? I assume this is the only way they will tell?

At the end of my IVA I understand I will have paid back approx 62% of the original debt. Would they still consider failing the agreement at that stage?

I'm not trying to be dis honest (I understand your concerns) I am just scared to death of them failing the IVA and dont want to creat problems for myself.

[MelanieGiles]

Glad that you used an alias, in order to protect your identity. You are here looking for advice, and for no other reason.

If the debt had been incurred prior to the IVA, as you suggest, and the balance now is no more than you originally owed, you might be able to persuade your IP to make contact with the creditor to see if they are prepared to join into the IVA proceedings. I fear that the answer might be in the negative, but there can be no harm in trying.

Your IP is unlikely to conduct a credit check at the end of the IVA - why would they need to, but you do run the risk of failure if they find out about this card in the meantime. How on earth are you disguising the monthly repayments in your income and expenditure summaries you submit to them each year?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Roytoner]

Thanks again for your response.

The repayment I make on the card is approx £120 monthly. Compare this to my payment under the IVA of £1400 a month.

My wife and I are on reasonable salaries, our mortgage payments are pretty large (£800), as is another payment to a secured loan (£400).

The point I am trying to make is that in the general scheme of things, the £120 is quite a small percentage. We obviously keep spending to an absolute minimum to ensure we can keep up with the repayments. I think the amount is lost in "contingencies".

I am really nervous telling the IP as I fear the worst!!!! I will probably have to take my chances.

You mention I run the risk of failure if they find out about the card....What circumstances would lead to this??

May I also thank you for your advice. If only I knew about this forum 3 years ago. You and your colleagues must bring relief to a lot of correspondents on here. Bravo!

[Adam Davies]

Hi
Your IP will not conduct a credit search
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

Hi Roytoner

As a practising IP, I can only give you best advice and that is to come clean with your IP and confess to using the card. You won't be the first, and probably not the last to do this.

However, if you choose to not follow this advice, make sure that you cut the card up now to avoid further temptation, and chip away at the balance as quickly as you can.

If your £120 per month is lost in contingencies, your budget has been inappropriately set, and at some stage you will need to invoke those provisions - leaving you in danger of relying on the card again.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Skipper]

Hi

What I understand is that CC companies keep payment records for 36 months as Experian does. So your payment to this CC with 4K is a matter of fanancial records but only can be seen by those in the datasharing cohort -Banks etc and yourself. So there is no hiding it as it is already there.

As said already as most of te debt was accrued prior to the IVA it should be looked at sympathetically.

<<My motto:I am proud of black culture and is against racist bigotry>