www.iva.co.uk

Both my wife and i are wondering to cut along story short, we woke up this morning to find £2800 from tax credit payments in our account. Our total debt included in the IVA was £27,000, we got the IVA for £200 a month. What we want to know is they have said we have to give them £1400 straight away to pay off our debt. Now does this come off the £27,000 or does it come off the £16,000 we have agreed to pay back?

Im sitting here thinking with overtime payments over 5 years plus extra money they take we could end up paying back the whole £27,000 over 5 years!

Does this make sense

Hi. It comes off the total debt. If you pay extra during the IVA it adds to the money the creditors get.

If you managed to pay back the whole debt that would be great --- okay, you won't have anything written off ( but that is not the point of an IVA) but you will have been spared interest, charges and harrassment --- as they say in those credit card ads ....Priceless !

It goes towards the total debt as all amounts remain outstanding until the conclusion of the IVA.

If you pay back 100% plus fees before the 60 months then the IVA would conclude early.x

It will come off the £27,000 debt and not decrease the £16,000 debt. The whole idea is to pay off as much of the original debt as possible. If you anticipate paying back the whole £27,000 in five years then you will have pleased your creditors no end!!!

Yes it makes absolute sense mitch. The whole spirit of entering into an IVA and getting creditors to accept your proposals is that you will do your best to pay them as much back as possible within the time limit set for the IVA, so windfalls and uplift payments play a very big part in the process. Did your IP not explain this to you before you entered into the arrangement?

Hi Mitch. The extra £1,400 just means that your Creditor's will receive a better dividend. If you get plenty of overtime you could well end up paying 100% of your original debt plus the fees. Not a bad position to be in because at the very least you are now protected from your Creditor's and also no further interest is being added to your debts. Rest assured if you reach the 100% plus fees before the 5 years, your IVA will conclude x

Hi Mitch

This is correct it comes off the £27000 plus interest plus IP fees, you owe over the duration of the IVA.

None of it was explained to us by the IP

We were told what wed pay back over 5 years and the rest would be written off. We were never told about overtime etc.

Extra money i get in my hand is going straight under my bed, not towards paying even more off the debt. Id rather pay back as little as possible and get the rest written off. If we paid back the full amount in 4 years would they then turn round and get our credit rating good? Would they heck

Oh dear mitch... I don't think you have embraced the principles of an IVA!!!

Unfotunately Mitch, your OT will need to be declared to your IP and you should have had this explained to you.

I'm afraid your company will know if they need bank statements - the idea of an IVA is to pay back as much as possible to your creditors - hopefully 100T% if possible.

Why are you worried about paying back more to your creditors?

Lets just hope the whole £27,000 isnt paid back over 5 years! Lol any overtime at work in future will be declined as that would also make my tax credits more next year

Any overtime i do usually gets paid in cash so there certainly wont be nothing on bank statements being given in

I think you should still declare this - the object is to pay back as much to your creditors as you can. It may not be on bank statements but will certainly be on payslips.

You could risk the IVA by not declaring O/T and refunds of tax credits/windfalls as if they find out (via payslips/bank statements etc)they can fail your Iva and you would be back to square one
Please think long and hard would you want to be back with all this debt hanging over you again .We have all been there and its only right that we try to repay all we can,it is a struggle but worth it in the end.

I don't understand why you are so against paying all of your debts. You borrowed the money and therefore initially planned to pay the whole sum off plus interest. The IVA is indeed protection, should you be not be to pay off the whole sum. But let's be honest, the creditors have agreed to stop adding interest, so even paying the whole £27,000 you are still gaining. The 16k is only the proposed payback, should you not be able to get overtime or any windfalls. Sounds to me like you want your cake and eat it.... sorry, but that's the way it comes across.