Is there any way I can leave my IVA and enter a debt management plan ?

[Levi.k]

Hi. I entered my IVA just over 2 years ago now. I entered it with a debt of £7600, and was told my disposable income which would go into my IVA would amount to more than my debt level. I agreed, naively, as I just wanted a reduction in my outgoings due to entering a heavily commission-based job. Since the start of my IVA I have made an overpayment of about £1000 due to additional salary, however for the past year I have not declared the extra income I have been receiving. This is due to the fact that I will be paying back more than I owe anyway and, at the age of 25, want to live my life!! I have been doing alot of research which suggests that an IVA should not really be considered for any debt of less than £10,000. Given than I am just over 2years into my IVA and have so far paid back £6300 of the £7600 I originally owed, I want to leave the IVA and enter a debt management plan, which I believe should have been suggested to me at the start. Is there a way I can do this? I fear the debt management company I used wanted me in an IVA due to the fact they get a fee whereas on a debt management plan i believe they dont. Can I seek advice from someone if I believe iv been mis-advised?? Any help would be greatly appreciated!!

[Adam Davies]

Hi

You can let your IVA fail and then enter into a debt management plan however much of the funds that you have paid in will be used to cover fees

Consider a full and final offer from a third party to repay your debts in full plus fees [4-5k ] or just carry on until you have repaid a 100p dividend

Regards

[Foggy]

I agree that an IVA was OTT for such a debt, but there might have been reasons to which we are not privvy. However, if you allow the IVA to fail now you will kiss goodbye to the payments you have thus far made, a great chunk of which will have been swallowed in fees. The creditors will then add back on the lost few years interest and possible charges, which will increase the debt level substantially.

If and when you hit 100% of the original debt, plus fees and possible statutory interest the IVA will stop at that point.

Added to this, your creditors will be very wary of dealing with you in a debt management plan, as you have already failed to meet your current obligations by not paying over the agreed extra payments.

As things stand, providing you make up the arrears, you will be out of the IVA and debt free within about 2 and a half years. In a DMP it will be anyone's guess.

Finally, regarding the fees question: If you are with an independent company they will get fees out of both an IVA or a DMP (possibly more from the DMP as these can be protracted and are not heavily regulated). If you are with one of the so-called charity firms, they do not take fees from your DMP payments, but get subsidised by the banks for this service, so still get paid. And, at the end of the day the fees in an IVA are agreed by the creditors, indeed, these days they are often SET by the creditors.

[lifenoteasy]

Agree with Foggy - you are in a position to have repaid 100p in the £ and you would gain nothing by letting this fail.

Push your IVA company on what this means.

By not declaring your additional income you will be causing trouble for yourself.

[Lisa Thomas]

Also if you fail your IVA you might be at risk of being Bankrupted, (although the minimum debt is about to change to £5k anyway so may not be a possibility but just an added thought).