Hi there. I've always come to this forum for advice but never needed to post a question until now.
I'm about 2 years in to my IVA. No issues so far. But my salary could be about to increase significantly. Almost double. My partner (who isn't a part of the IVA) doesn't want me to take the new job (which carries a certain degree of risk to our stability) if it means 50% of my salary increase will be taken up by IVA payments.
She wants to take a loan out, in her name, so that I can make a F&F offer. I appreciate in most circumstances, this is not the ideal answer and goes against the spirit of the IVA, but wants to know if it is technically feasible. Assuming her credit hasn't been impacted to such a degree that it's even possible (on paper it looks okay and she has maintained a few active lines of credit). The offer would cover the full amount left outstanding, no deals. She would not otherwise take the loan out so it is essentially a gift.
I understand my partner's position as the risk/reward ratio doesn't seem worth it in her eyes and our month to month standard of living would be significantly improved with the proposed solution.
As I say, I appreciate this isn't a conventional solution. I just want to know if it breaches the letter of the law, so to speak. When I took the IVA out, neither myself or my partner ever imagined that my salary might increase by so much otherwise I would have been able to manage and pay down my original debt.
On paper it is a possible solution and is perfectly legal. In reality, though, you have to weigh up the pros and the cons: You worry about the stability of this new job --- if it fails, your partner will be saddled with the loan repayments for quite some time. If you simply continue with the IVA, yes, you will 'lose' half of the pay rise, but, in a few years time (not really as long as it might sound) ALL of your pay rise will be yours and NO loan repayments.
How do the repayments on the loan compare with the amount you will keep of the raise ? One would cancel the other out to some degree.
Lots to think about.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Yes, I can see that the loan would be a smaller burden all round, albeit for a longer period. Maybe -- when the IVA is finished early, you could them divert all of what would have been the new disposable income to paying off the new loan as quickly as possible.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
That would be the plan - to double the amount going to the loan, paying it off early and still have additional disposable income to start doing things like save (a luxury I've never had).
Similar thing happened to me, i got a pay-rise £400 a month, and really didn't want my payments to increase from £280 to £500 per month for another 3 years.
So luckily my mam had cashed in her pension when she retired and had money sitting in her bank.
she loaned me £6k to make a F&F which was accepted and now i pay her £500 a month back for a year.
Honestly its not really in the spirit of the IVA but id rather pay £6k back than £18k.
Others probably couldn't live with themselves doing that however i can quite happily sleep at night.
IVA Started 07/07/2017
F & F Accepted 06/09/2019
Completion Certificate 16/12/2019
I'm trying to decide if I should just offer the total outstanding amount to improve chances of acceptance or reduce it as many seem to suggest as there are few administrative burdens and a better chance of realising the full. Based on my current contributions, I will repay circa £11,950 over the next 4 years (including 12 x payments if house cannot be remortgaged).
Do the experts think an offer of £10k would have a decent chance of being approved?
Thank you. One last question for now... what is a realistic time frame for an offer to be put forward to creditors and have it accepted? I'm acutely aware that in order to prove funds the loan will need to be completed which means we will effectively have more outgoings for however many weeks/months it takes to complete the process.
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
Fri Dec 27, 2019 2:01 pmpetermike wrote:
Thank you. One last question for now... what is a realistic time frame for an offer to be put forward to creditors and have it accepted? I'm acutely aware that in order to prove funds the loan will need to be completed which means we will effectively have more outgoings for however many weeks/months it takes to complete the process.
It usually takes 2 - 3 months to put together the variation and get the meeting done. As with all things, some do it faster and a few do it slower.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
£10k sounds good but you will want to get approved before the potential payrise takes effect, otherwise the offer will have to be based on the increased contribution figures.
