I have only 5 months left on my IVA but I've run into some extra costs and taken out a few payday loans. I can't see myself paying these off before the end of the IVA and I'm worried it will stop my IVA completion. I know one of the conditions of the IVA is that i don't take out credit without the approval of my IP so I'm a bit concerned.
Please can someone advise me, will the extra loans cause a problem with my IVA completion?
Hi IVA Kid - depends on your wording of IVA and how much you have borrowed - but you may have breach the contract.I wonder whether you could borrow the money from family to get rid of the payday loans. Then make arrangements after the completion to pay back.
It would be a real shame to fail the IVA at this stage - so maybe its best to come clean and tell the IP the situation.
Can i ask why you needed the money ? - it may have been better to have a payment break from your IVA to pay for essentials.
I am sure an IP or somone more experience will advise the best route forward
Hi, firstly I would explain to your IP what has happened, most IP's won't be happy about credit being taken without their express permission but I do feel you need to be honest and upfront and hopefully a solution can be found.
We do have IP's who post on the forum and hopefully one of them will comment a little later.
As ginger says it would have been better possibly to talk with your IP and arrange a payment break as IP's are in the main very approachable and mine has agreed to a payment break on more than one occasion to help get me through the IVA, I then repay a little extra each month to catch up.
IP's can find out if credit has been taken in various ways so it would be best to discuss it and if you can speak with them directly for whatever reason why not drop them an email. Once it's out in the open hopefully you can sort something as it would be such a shame for your IVA to fail so close to its completion.
All the best x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
The loans could lead to the failure of the IVA even at this late stage which would be a shame. I agree with Ginger that you should come clean and hopefully your IP will be able to help.
Well i think my contract says I cannot take out any credit without my IP's permission, so I guess i have breached it. But obviously I don't want to disclose it unless I have no other option.
If I can pay it off I will, but if I can't, will anyone be checking this at the end of my IVA? As long as I've paid off the creditor specified in my IVA won't that be enough?
I tried for a payment break several times but my IP kept telling me I could not have a break. In a few situations they let me reduce my contribution and I've been paying that extra back spread over a fixed term but it didn't help me much and I've had to take out a few loans.
I've also been issued with a breach letter before, and I'm worried if I got a second one it would fail. Does anyone know if there is a limit to breach warnings?
Last edited by IVA_kid on Mon Feb 14, 2011 2:23 pm, edited 1 time in total.
Honesty is the best policy and I would speak to your IP - explain why you needed the money etc. Hopefully they will accept your reasoning and allow you to continue but ultimately you have gone against your agreement, but I would hope common sense prevails !
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I do believe but do not know for sure that the interest rates on these types of loans if you exceed the agreed payment term is extortionate. As you're so close to the closure of your IVA it would not be good to enter your debt freedom with debt so I would suggest you do take the advice and speak with your IP.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
If you were issued with a breach and then rectified the breach there is no problem. Tell the IP that you were forced to borrow because they would not allow a short break and a small amount of money has gotten out of hand. A short holiday now would possibly clear the payday loans and your IVA could be extended by the same length of the payment break.
Thank you to everyone for your advice. I think I'll have to talk to my IP and explain. Do you think they are likely to grant me with a payment break of 2 months? Is there any limit to the period they can give as a payment break?
Sharing from experiences of dealing with debt
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With only five months to go, you have substantially completed the terms of the IVA and creditors and your IP are very likely to cut you some slack in being able to deal with these matters. I would focus on concluding the IVA, and at the end of this deal with the payday loans - but if there is a family member or friend who could help you out with this intitially, you could begin to repay them from your surplus income once the IVA has concluded.
Yes this is a breach - but I don't see it failing the IVA from a commercial and practical perspective.
I personally would want to clear those payday loans as soon as possible because the interest they charge is extortionate, 3000-4000% APR. So if you could get a payment break or loan of a family member to pay it back now, rather than in 5 months time, it would be better I would have thought.
We're willing to wipe the slate clean, give you a fresh start. All that we're asking in return is your cooperation.
