How would debt to family/friend be dealt with ?

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Post by » Tue Sep 07, 2010 5:35 pm
i am considering a iva but in addtion i owe 6000 to family/friend and have been paying that back each month also. I would a iva affect this and whow would this debt be dealt with. I am obviously keen to repay this as the person went to a lot of finaicnial incovience to loan me this money.


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Post by liamjames » Tue Sep 07, 2010 5:39 pm
Hello and welcome!

As long as there was some evidence of the debt amount (eg: bank statements) it would be treated just as a normal creditor, and your family/friend would receive a fixed percentage of the debt back just like your other creditors.

It's not permitted to give any preference to your friend's debt.
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Liam James
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Tina Shortland

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Post by Tina Shortland » Tue Sep 07, 2010 5:51 pm
Hi, unfortunately you would not be able to continue repayments to your family/friend as that would be giving preferrential treatment to that debt.

Your family/friend could be included as one of your creditors if they are happy to do so (some choose not to be included) but it is in your interests if they are as they will have a voting right on your behalf.

They will not necessarily get any proceeds from the IVA - this will be down to the creditors to agree as part of the IVA acceptance. The best thing to do is to speak to 2 or 3 companies to get further free advice more specific to your situation and see what your options are.

Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.

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Post by kallis3 » Tue Sep 07, 2010 6:21 pm
Quite agree with Tina.

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Post by TheMatrix » Tue Sep 07, 2010 6:36 pm
If you really wanted to pay your friend/family back in full, then may be you could do this after the IVA ended, by gifting them the money.
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