I have been in my IVA now for 28 months (not that I'm counting!) and everything is going fine.
However prior to entering into my IVA my son lent me £13,000 which I used as a last ditch attempt to save my failing business - not the best idea as I ended up putting it into liquidation.
The problem is that I wasn't allowed to include this in my IVA and of course I haven't been able to pay him anything back. He is now wanting to try and get on the property ladder and has asked if there is any way I can repay him.
My mum has said that she can give him £5,000 - on the understanding it goes straight to him and comes off the amount I owe him.
I feel absolutely dreadful about this as does my husband. He has said that he would try and get a loan for the balance which I have said no to as we just wouldn't be able to repay it.
But I did wonder if it would be possible to change my mortgage to an interest only for a period of time and pay him the difference. We have a lot of equity in the property so it won't affect the equity release at year 5.
But when I spoke to the mortgage company to enquire about it they said I would need permission from my IVA company to do this - which I would obviously do before proceeding any further.
Has anyone else done this or is it a definite no-no? I just can't see any other way of paying him back. The difference between capital and repayment would be just over £500 so it make a big difference to him.
I think that if you change to interest only then your IVA company would want you to be paying across the difference.
Why were you not allowed to put this across to the IVA?
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
A definite no-no I am afraid, as you would be preferring an associated creditor. Who told you that his debt could not be included into the IVA - if creditors rejected him being included at the outset then fair enough, but if your IP told you not to include him then that is wrong. Might be an idea to see if he can be included now, and at least receive dividends but you will need to be sure that this will not throw your IVA into default.
As Andy says if you have additional income, you can use the 10% benchmark and your share of the 50% to do what you like with - including repaying your son. And if your husband's income was used for the purpose of calculating your disposable income, remember that his contribution should not increase over the term of the IVA regardless of whether his income goes up.
I thought all unsecured creditors, regardless of who they are, needed to be included in a IVA.
I know this may be a sometime away, but I don't think there would be anything to stop you paying your son once the IVA was complete, if you thought that was the right thing to do.
We're willing to wipe the slate clean, give you a fresh start. All that we're asking in return is your cooperation.
If your son can wait then I think you can start paying him back afterwards.
I know of at least one poster who is paying a relative back after the IVA completed.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi - Mel's suggestion is a good one as the best solution al round is to include the debt in your iva if possible and then you can either top up the dividend after the iva finishes or you can try to squeeze a bit extra for him out of your allowances. I manage to find £50pm to repay my boyfriend out of my housekeeping...it's a struggle but it can be done. P.S. He asked not to be included in the iva as we thought it would affect his credit rating...I wish we had known better as it would hAve been much easier on my allowances if he was receiving a dividend! xx
Of course there would be nothing stopping you from including the debt in your IVA, paying them a dividend and then pay them the rest once the IVA has concluded if you wanted to do that.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I was definitely told that I couldn't include debts with relatives when I asked about this at the time.
To be honest asking to include him in my IVA is not going to help him - he would hardly get anything back and it would not help him to get on the property market at the dividends I am paying - plus it would take years!
You can include debts from relatives, they will receive a dividend from your IVA.
Unless they agree to wait until the end I really don't know what you can do.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Hi - can you or your husband get any overtime? You could give your share to your son. It would be just as well to include him in the iva as even a small dividend is better than not having it.
You could do as BOL suggests, but if they are included then they can get a dividend any you could pay them back the remainder at the end.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
I have queried it again with Payplan and have received the following reply:-
'As you stated in your previous email you have been informed that Neil’s debt could not be included in your IVA due to him being a family member. I have double-checked this and this information is correct. The reason for this is because we have to go through court for an IVA to be approved, which is a legal binding arrangement, consisting of unsecured creditors only. Any secured creditors and family members cannot be included as a creditor to your IVA, due to being unable to take these debts through a court'.
I just think this is very unfair as he clearly lent me the money and as such is a creditor. We can't get any overtime - lucky to have a job at the moment!!
I hope that Nick, the IP from Payplan can come back with this one.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
