I’m just over 2 years into my IVA (out of 5 years in total). I took my IVA out when I was 21 and around £7,500 in debt, mainly through payday loans which spiralled out of control. I took the IVA out in a very spur of the moment move, when I felt stressed and upset that I had several payments coming out shortly, with no means to repay them. Looking back, I’m confident that I should not have been accepted for half of the credit cards/loans I indeed was. I was 19/20, earning no more than £12,000 annually, and taking payday loans out weekly to fortnightly purely to pay off the last loan. In hindsight, I wish I hadn’t entered into the IVA, but at the time felt under pressure to do so, with little other option. I hear of people nowadays, who’ve been in a similar position to mine, claiming compensation back from payday loan companies who should not have leant to them in the first place. I wondered if this was something I could look into WHILST being in my IVA? I understand my IVA company would most likely be entitled to any compensation received, but if it meant getting a lump sum and being able to shorten my IVA I’d be more than happy.
It is an interesting dilemma: If you received compensation for mis-selling the loan, which, as you say, some have done, then it would be payable into the IVA. I believe some of these loans have also been set aside by the courts.
Now, the majority of your loans in the IVA are these very pay day companies themselves! So, compensation would be going towards reducing their own loans .... and ... if some of the debts are set aside, I assume they would be removed from the IVA as the debt would have been expunged.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014 http://foggy.blogs.iva.co.uk