Will taking out a payday loan stop our IVA ?

[cooltony]

I totally agree with Melanie on payday loans. When I was in my iva I really struggled and wanted to take one out but didn't do the fact it might void my iva and i wouldn't get one due to having a iva on my credit file. After reading about them today in the paper I think they need to be regulated like mainstream credit is

[joey_C]

Even those who are having bad credit can still get payday loans. It is really easy to get a payday advance loan and purchase the things you want now while you wait for your cash to come.

[allenhero]

At the end of the day, if you are able to pay it off, then it shouldn't represent a problem. I'm guessing it becomes a problem, when you can't pay it off and it creates another debt.

[esgt1967]

Surely the whole point of an IVA is that your expenditure is tightly controlled and if you are in the situation where you need a payday loan to survive until next pay day, you are going to find it very difficult to both repay that loan and make ends meet the next month and therefore the borrowing cycle begins again. Unless, of course, you were guaranteed to get a bonus in your salary which would repay the loan at the end of the month. I would suggest speaking to your IP as soon as it becomes obvious that you are having problems with balancing your income/expenditure and avoid taking out a pay day loan under any circumstances. By the time my IVA was approved I owed nearly £2k to pay day lenders and this was built up over less than a year and it's so easy to get into the cycle where you take out the loan and then have to extend it because you can't afford to repay it and this carries on month after month and I would have thought that being in an IVA made it even more difficult to be able to afford this type of borrowing - and, as Melanie says, you really shouldn't be approved for a loan in the first place!

[UpToMyNeckInIt]

In relation to obtaining additional credit (payday loan or otherwise), my protocol-compliant IVA is worded:

'Apart from my self-employed liabilities, I propose that I shall not incur any credit greater than £500 during the course of my IVA except in relation to domestic utilities and to re-finance a ballon payment at the end of a vehicle Hire Purchase Arrangement without prior written consent of the Supervisor. Should credit greater than £500 be obtained without prior written approval of the Supervisor, this will constitute a breach of the Arrangement'.

I interpret the above as meaning that I can obtain any credit I want for my Ltd company (self employed liabilities). Additionally, I can take out £500 in personal credit AND have credit for 'utilities' on top of that. It's only if I 'needed' to borrow morethat £500 that I would have to seek consent.

I imagine most protocol compliant arrangements have similar wording, and could be interpreted accordingly.