In most cases where relatives take loans for family members there will be evidence of a bank tansfer between the 2 accounts, how else would the money be exchanged, cash I suppose, unlikely though.
If the debt to mum can be documented then she will have to be included in the IVA as a creditor, them's the rules, but she won't receive a dividend because she would be an associate creditor.
However, if mum took the loan on a secured basis then there can be grounds for ensuring this debt is repaid at the contractual amount.
Either way, every proposal is unique, it needs to be tailored to the needs of the client, whilst being mindful of the creditors stance.
I have known of many 'unconventional' proposals being approved by creditors, the most important factor, outside the usual criteria, is that it is a best offer, no creditor should expect more than that.
I would always avoid advising anyone that an IVA is not possible until I had explored every avenue with them.
There was time when Northern Rock would not even consider IVA proposals, many people with the much lamented 'Together Loans' were left high and dry because N Rock generally held more than 25% of the total unsecured debts.
If people hadn't pushed for change their stance would, no doubt, have stayed the same, these days NRAM are generally happy to support IVA proposals when they contain these type of loans.
So everything is worth exploring Hazel, good luck to you.
You may have to prove that Hazel has made payments to her mother though Foggy.
The mother may have to step aside or continue to make the repayments herself until the end of the IVA or the loan finishes.
If she cannot afford the repayments, which it sounds as though she can't, then surely the creditor will just chase her for the whole amount.
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
Hazel should take some professional advice - visit www.iva.com for a list of companies and reviews and give one or two a ring for some free advice.
We do try to advise to the best of our knowledge on here but the experts are always the best ones to go to.
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'm in agreement with you Foggy! It is the point I was trying to make above. There are two loans here - one btwn mum and bank and one btwn Hazel and Mum. As long as there is evidence to substantiate Hazel's mum lent her money then I don't see why she can't be included. It makes sense to me to include it and for mum to make a case to other creditors to receive dividends - perhaps by putting in a case of financial hardship.
The problem then is though, how is she going to afford the full payments?
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
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Broke of London
I'm in agreement with you Foggy! It is the point I was trying to make above. There are two loans here - one btwn mum and bank and one btwn Hazel and Mum. As long as there is evidence to substantiate Hazel's mum lent her money then I don't see why she can't be included. It makes sense to me to include it and for mum to make a case to other creditors to receive dividends - perhaps by putting in a case of financial hardship.
Of course but that doesn't take in to account the family dynamics, Hazel may need to avoid causing her mum any discomfort, like submitting a claim of finacial hardship, could be a bit awkward for her. If Hazel contacts one or two of the companies on the link provided she will be able to establish just what options are available to her, then she can make a fully informed decision.
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
Many thanks guys, you have given me many things to think about.
There is no paperwork for the loan agreement, however £175 each month goes by standing order to her account from mine.
If she had to be included in the IVA she would have to pay the remaining amount owing which would put her in hardship herself and also default herself on the loan.
Someone suggested that I might be able to leave her out of the IVA arrangment and pay using my personal allowance, if that is the route I took / able to take would I have to inform the company and would all the creditors have to agree to it?
If your mum were included and could receive a dividend, then that would ease the strain on you having to find the full £175 each month - particularly if she restructured the loan over a longer term to reduce the monthly payment. Your mum is not limited to only receiving the dividend as you can top this up both during the iva out of your personal allowances and after the iva has concluded if there is still a balance outstanding.
Also, The embarrassment of pleading financial hardship to faceless creditors will be fleeting whereas the actual financial hardship if you don't include the loan and can't afford repayments out of your allowances will last for years.
What you actually spend your allowances on will not concern the IP, as long as you have sufficient to also meet your basic needs and keep up specified payments ( rent / mortgage, car tax / insurance and the like). Although £175 is a large chunk to go without.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
You could always actually put forward an IVA and have an allowance given for repaying your mother. Creditors may allow this if disclosed depending on your mother's personal circumstances. You could then offer to extend the IVA by perhaps a year so that creditors would receive the same dividend they would have got with your mother in as a creditor.
This would keep everyone happy and no one would be unfairly treated. If creditors refuse you are no worse off and can do a DMP.
I am surprised to see hth suggesting that the loan to an associated creditor would be asked to sit outside of IVA proceedings. I present many IVAs where there are associated creditors and it is a long time since I have experienced creditors seeking them to stand aside for dividend purposes. This used to happen a long time ago - is it still happening to your firm hth?
I have certainly proposed IVAs with terms such as Michael describes above, and so long as a complete and full disclosure is made there is nothing wrong with this suggestion - albeit it is a little unorthodox!
