Implications of lending friend money to clear IVA

Get expert opinion. This is the place for new questions to be posted.
14 posts Page 1 of 1
User avatar
s
Posts: 1
by s » Tue Nov 06, 2018 9:47 pm
Hi
I am thinking of lending my friend an amount so he can clear his IVA

Are there any financial implications to my credit rating as a result of doing this ? Or any other implications other than giving someone money
User avatar
Foggy
Forum Expert
Posts: 27284
Contact
by Foggy » Wed Nov 07, 2018 7:55 am
Not really --- the IP will need to see your bank statement showing the money is there and will need some ID from you. The money needs to go direct fom you to the IP, not into the friend's account. You will not be linked financially.
User avatar
Shaun Vickery
Industry Expert
Posts: 740
Contact
by Shaun Vickery » Wed Nov 07, 2018 9:59 am
There's no reason this should affect your own credit file, it won't even show.
User avatar
kallis3
Forum Expert
Posts: 73706
Contact
by kallis3 » Wed Nov 07, 2018 10:33 am
Your money is just to show what you are doing and if you do pay, it has to come from your account directly to the IP.
User avatar
Lisa Thomas
Industry Expert
Posts: 7033
Contact
by Lisa Thomas » Wed Nov 07, 2018 10:56 am
Often these types of arrangements need to be 'gifts' not loans so bear in mind that although your friend might agree to pay you back at a future date once the dust has settled you might not have a legal recourse to pursue them if things turn sour.
User avatar
Shaun Vickery
Industry Expert
Posts: 740
Contact
by Shaun Vickery » Wed Nov 07, 2018 11:03 am
Lisa why would it need to be a gift not a loan? Surely the creditors won't be concerned?
User avatar
Foggy
Forum Expert
Posts: 27284
Contact
by Foggy » Wed Nov 07, 2018 11:10 am
Shaun -- while still in the IVA loans are not allowed (except, interestingly, early exit loans !! ). You could be deemed to breach the IVA in order to close it early ! Also some creditors will refuse to accept a loaned lump sum on principle.

If you chose to repay your donor after the IVA that is your business -- but, while you are in it ... you are in it !!
User avatar
Shaun Vickery
Industry Expert
Posts: 740
Contact
by Shaun Vickery » Wed Nov 07, 2018 11:15 am
Am I misunderstanding something? As I understand the thread, the loan IS to be an early exit loan, the exception theory with these being that the loan isn't officially made until the IVA is settled (at least simultaneously).
User avatar
Foggy
Forum Expert
Posts: 27284
Contact
by Foggy » Wed Nov 07, 2018 11:51 am
Shaun Vickery wrote:
Am I misunderstanding something? As I understand the thread, the loan IS to be an early exit loan, the exception theory with these being that the loan isn't officially made until the IVA is settled (at least simultaneously).


For various reasons, commercial early exit loans are viewed differently and are often cloaked in equity release situations. Although, as I say, even those are sometimes rejected by some creditors on principle.
User avatar
Shaun Vickery
Industry Expert
Posts: 740
Contact
by Shaun Vickery » Wed Nov 07, 2018 11:55 am
I'll have to take your word for it Foggy but I can honestly say that in our experience we've never seen a creditor reject a proposal because the F&F is being provided from a loan or re-mortgage.
User avatar
Shaun Vickery
Industry Expert
Posts: 740
Contact
by Shaun Vickery » Wed Nov 07, 2018 11:59 am
There, and I've uploaded a new avatar too....thought it best to have one that was at least taken in the last century!
User avatar
kallis3
Forum Expert
Posts: 73706
Contact
by kallis3 » Wed Nov 07, 2018 12:06 pm
:D
User avatar
Foggy
Forum Expert
Posts: 27284
Contact
by Foggy » Wed Nov 07, 2018 12:41 pm
Shaun Vickery wrote:
There, and I've uploaded a new avatar too....thought it best to have one that was at least taken in the last century!



Been a hard few years, has it, Shaun :shock: :lol:
User avatar
Shaun Vickery
Industry Expert
Posts: 740
Contact
by Shaun Vickery » Wed Nov 07, 2018 12:45 pm
It was a very old photo! 8)
14 posts Page 1 of 1
Return to “Ask IVA Forum and Industry experts”

Who is online

Users browsing this forum: No registered users and 24 guests