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My mum has taken a loan out in her name to try and consuladate some of our borrowing but we pay her back the monthly repayments each month. She is retired and is unable to make the payments by herself as she is on benefits. Could you tell me how this could / would work if we decided to do an IVA with our other debits please.
Many thanks
Hazel

Hi Hazel and welcome.

Unfortunately your mother is liable for the whole of this debt and you would not be able to include it in an IVA.

Hi Hazel. On the face of it your mum would be treated like any other creditor and receive dividends of pence in the pound, probably on a quarterly basis.

How much are we talking about here?

There are ways and means. If your mum agrees to hold off the debt repayments until after the IVA is complete, your IP might agree to exclude the loan, being an informal family arrangement. However, this would still leave the question of the repayments in the meantime.

You would not be allowed to offset these in your allowable expenses, but would have to fund them from your agreed allowances.... which might make an IVA unworkable, if you can't afford to eat.

I suggest you pop over to www.iva.com and have a word with a few companies there. It's free and without obligation. You can at least work out some figures to find a viable way forward.

It sounds as though her mother can't afford the repayments though and it will all come down to her and not Hazel. I don't see that an IVA will be able to do anything about that as the creditor will chase the mother.

Jan is correct,if the loan is in your mums name then it wont be included in your IVA.

Paul

Sorry .. maybe I wasn't clear. I wasn't saying the loan could be included in Hazels IVA. But it would, if declared, be treated as Hazels debt, and so the mum would become a creditor. Which would be no help whatsoever.

The only workable way is for Hazel to make her mum's loan repayments from her agreed allowances .... which could make living a bit tight all round.

Hi Hazel,

Unfortunately your mum wouldn't receive a dividend in your IVA as she would be an associate creditor, she would be entitled to vote on your proposal but would almost certainly be expected to defer her interest until the IVA was complete, so this would be no help to you at all, she can't afford the payments. Does she own her own home, if so is the loan she took for you secured against the property?

It is always worth speaking with a couple of companies, there are many variables that can come in to play when assessing viability for an IVA, it is almost impossible to identify your options without speaking with someone, especially when your situation has complexities, it must be a real worry for you that your mum is vulnerable too.
Like others have said, speak to someone, it costs nothing.

Unless there is proof of the loan being taken out for Hazel there is no way it can be classed as her debt.

Paul

The best option, if it was allowed, would be to include the loan so Mum receives a quarterly dividend and then top up as much as you can from your agreed allowances each month (beans on toast might get a bit monotonous after a while...I know from experience of repaying a loan to my boyfriend outside the iva)! Also, the loan you include will be between yourself and your Mum...nothing to stop her restructuring over a longer term with the lender so the monthly payment is smaller. This could mean you end up paying more interest but it will mean your Mum is less out of pocket. A three pronged attack may just work!?! How much is the monthly loan payment?

Agree Paul - the loan is in the mothers name so she will be liable for the whole amount unless there is anything in writing then she will be liable for the whole amount. I cannot see how she can be an associate creditor.

Agree tho that proof the loan was for the OP is vital but this isn't insurmountable. Also, as the Mum is a pensioner she may not be asked to step aside for dividends as she can present a case for financial hardship or even her own insolvency if that happened. If you don't ask you don't get...

Unless Hazel's mother does petition for insolvency herself then I think, if there is nothing in writing to say this loan is for the daughter, that she will liable for the whole amount and it won't be allowed for in an IVA.

We could do with the OP coming back and telling us whether there is any paperwork or proof that they are paying the funds back.

If the loan isnt in the name of the OP it cannot be included,if that were the case I could have taken the hit for any loans my brother and sister had!!!

That aint how it works.

Paul

I'm with you there Paul - I cannot see anyone being allowed to pay back a relative that has taken out a loan for them - at the very least they would have to take a back seat until the end of the IVA or accept reduced payments in a dividend. In the latter, unless the loan company agreed, I could still see them chasing for the whole amount.

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by plasticdaft

If the loan isnt in the name of the OP it cannot be included,if that were the case I could have taken the hit for any loans my brother and sister had!!!

That aint how it works.

Paul

Am I having a bad day -- no-one has suggested that the loan be included as a debt in Hazels IVA.

The mum borrowed the money and the loan, as such is hers. She then lent that money to her daughter, so THAT debt IS Hazels. Therefore, the mum could be an associate creditor due to the fact that Hazel owes her mother money ( irrespective of the ultimate source of those funds). However, she will, in all probability, as hth suggests, be asked to step aside.

So, the only solution I can see is that the repayments (which Hazel has promised to make on her mother's behalf) are funded out of Hazel's allowable expenses.

So the repayments, nor the original loan are in the IVA.