www.iva.co.uk

Apologies if this is long winded. My mum is 65 and suffers with mental health problems and physical disabilities and has been on benefits for years. 6 years ago we lost my dad suddenly. At the time she took out a bank loan and credit card with her bank even though they knew she was on benefits. She took out an IVA 2 years ago with Payplan but can no longer afford the payments, her payment is £92 a month, can this be changed to a debt relief order. She has no assets and is also desperate to go into sheltered accommodation. Any advice greatly appreciated.

Hi. I don't believe you can enter a DRO within a certain period of being in an alternative debt solution, but stand to be corrected.

If her circumstances have deteriorated Payplan may be able to suggest a solution and should be the first port of call to discuss the ins and outs. Maybe she can, if willing, give Payplan authority to discuss this with you if she is having mental health problems and unable to think as quickly as she once could.

Thanks Foggy I think I will speak to them, I know she shouldnt have got the loan etc but she wasnt in her right mind at the time, thanks again xx

If she has more than £50 each month available then a DRO will not be appropriate. However, she could consider bankruptcy?

She should get some independent advice from her local CAB. She may have a DI of less than £50 if her income contains disability benefits which can be disregarded and if the IVA fails she may be able to propose a DRO. Her CAB should be able to advise properly as they would specialise in DROs.

Thanks for that Foggy as very helpful. Not sure though if Locko's mum would qualify for a DRO once the IVA is failed and it would be helpful if someone knows that answer. It says you cannot get one if you have an IVA or are applying for an IVA but not if you have a failed IVA.

Does anyone know the answer?

Have done a little more digging: The Insolvency Service say this:

"You must not be involved in any other formal insolvency procedure at the time of application for a DRO."

So, I imagine you have to run the gauntlet of allowing the IVA to fail, then hope that added interest and charges do not push the debt over the £15k limit.

As for advice, again, according to the I.S both StepChange and Payplan are approved intermediaries. Maybe one of the Payplan reps here can assist their client?

Thanks again Foggy and I await their answer.

Once the IVA is closed, there is no reason why a DRO cannot be looked at. The only real hurdles to get over, some already mentioned, are that the qualifying criteria are met, the debtor must not be involved in any other formal insolvency procedure at the time of application for a DRO and they must not previously have been subject to a DRO within the last 6 years.

Regards.

Thanks Mike.

Thanks everyone, will let you know the outcome locko x