It could cause the IVA to fail. Have you repaid the payday loan? If not I would speak to your IP asap to make them aware you have taken extra credit.
It's always worth speaking to your IP if you need cash, they could authorise a payment break or reduce your payments. Some newer IVA agreements have a clause where you can take credit if your IP agrees (ours is £200) but you always have to get their agreement.
If you have repaid the payday loan, I would probably keep quiet and hope it never comes to light!
I had one at one point. I was told by my ip that a payday loan is a wage advance and as lonmg as you pay it all back on wage day it wiLl be ok. The only problem is you will find if difficult to manage your budget. We had beans for a month to make the money up may be different for different ips though so maybe someone else can help
Paul yes it is daft, but sometimes you aren't aware of payment breaks. We did ours in year 1 struggling with our mortgage before we gave the house up. Wouldn't do it again...
I know Gina and often people are too scared to approach their chosen iva firm to ask for help,I really do appreciate that but its dangerous to get into payday loans when you arent in an iva and even more hazardous during one.
It wont be hard for dfd to sort this out and as long as you can afford to pay it back.
If its needed in the 1st place it may be that a review of income and expenditure should be undertaken to re-assess whats affordable.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
We all know that Payday loans are bad but sometimes in desperation, especially if we don't know about payment breaks, then it can seem like a lifeline.
As others have said, speak to your IP. I'm sure they will be able to help you.
Let us know how you get on.
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 also think taking out a payday loan is not the smartest thing to do, even if you are not in an IVA. Having said that, knowledge and hindsight are a powerful thing and before joining this forum I had no idea about how I could approach my IP/supervisor to assist if things get financially desperate. I would never have got a payday loan, but I certainly can't condemn someone who has when things have got that tight they need a cash injection. Hopefully your IP will see that you are just in a bit of a fix and sort it out for you with no more than a tap on the wrist :-0
Last Payment made 04/12/14. Completion Certificate 25/7/15. IVA company GT. No Issues
Today one the things Pay Day loans were accused of is not doing all the checks needed to ensure borrowers could afford to repay them, was it therefore responsible of them to lend to people in an IVA, perhaps with the threatened withdrawal of their licenses they may stop lending to anyone in an IVA, problem is then desperate people will go to the loan sharks.
Before my IVA, I took out pay day loans with 2 providers and got caught in the cycle of extending them constantly and never being able to afford to repay them. To me, the whole point of being in an IVA is that we shouldn't be taking on any credit and, as said above, if it gets to the point where you have no money (regularly) and feel that the only way out is to take out a pay day loan, then you really should be speaking to your IP. Information about payment breaks and (not) taking on credit without IP agreement (up to a certain level) is in my IVA proposal - is this not the case with other people or is it that they haven't read it from start to finish? I know there is a lot of legal (boring) stuff in the IVA but when you sign up to something that basically takes over your life, you really should take the time to read it through properly, which is something our IP told us to do, and let the IP know if you have any questions. As different IVAs have different clauses and limits,it is vital that you know exactly what is involved in YOUR IVA as that could be different to someone else's and, as said before, if you feel that you need a review of your income/expenditure, get on the phone to your IP and get it sorted. We are only in the 3rd month of our IVA but I am happy with the income/expenditure we agreed in our proposal but would have no hesitation in telling our IP if we felt that it wasn't realistic and we needed to discuss any changes. Best of luck anyway with sorting out your payday loan issue and hope your IP has some good news for you.
If I were Prime Minister, I would pass a law voiding all payday loans made to people in IVAs. At the flick of switch and over the internet they can see whether you are listed on the insolvency register - so there is no excuse.
The concept of a payday loan is not bad, but the lack of vetting and the method debts are collected can be within this industry.
Last edited by MelanieGiles on Thu Mar 07, 2013 1:20 am, edited 1 time in total.
may be different for different ips though so maybe someone else can help
