my son is in debt

[sdy]

my son is in debt - over 23K with no assets, all credit cards. He is worried that if he applies for IVA he will not be able to continue with the Knowledge (taxi driver training). Is this true? He really needs help with his debt situation

[carlmcmullen]

I would not say his taxi driver training would be affected in any way.

What i would say, as you stated he is in training is his income likely to impove in the near future once he has passed the relevant exams ? Maybe a DMP is better until he reaches this point.

[size5]

Agreed. If he is doing the knowledge in London then from personal experience he probably won't need an IVA as hopefully his income will be be too high, but a DMP in the short term will be ok for him.

[Reviva UK]

Hi there
the right debt solution depends on where he is in his life. Some people do the knowledge part time over a number of years ( I have a couple of potential taxi drivers and they are planning on a 3 year program to get qualified).

If he is working at present what does he do and does he have any disposable income ? I guess at present he is required to make minimum payments to his creditors of about £460 pm so in theory an IVA would be less than this but the Insolvency Practitioner would confirm the likely amount.

if he started now he would probably be able to completely pay off the debt through the term of the IVA - probably early as well.

If he is not working at prsent then Debt Management ( with the knowledge that his income will increase) or bankruptcy would be alternatives.

Good luck

[Andrew Graveson]

Hi Paul,

How do you calculate that an IVA would cost less than contractual debt repayments without any knowledge of the individual's income or expenditure?

[Reviva UK]

Hi andrew

I am making the assumption that if one were making contractual debt repayments then one wouldn't be on this site seeking some debt advice.

The other assumption is that in an IVA interest is frozen ( legally binding for duration of IVA) and that one usually doesn't pay off the full debt.

therefore I believe that an IVA would cost less than contractual debt repayments.

I have not said that they would be affordable - obviously this is dependent upon I&E and disposable income. Instead I suggested that in the first instance one speaks to an IP to confirm the viability of a plan.