Can I Do an IVA If I Cannot Remember All of My Debts?
If you have a lot of different debts or have debts that were taken out a long time ago, you might not be able to remember everyone that you owe money to. We consider whether you can carry out an IVA without being able to remember who all your creditors are.
If you are planning to start an individual voluntary arrangement (IVA), you must always include all of your unsecured debts in the agreement. Generally speaking you are not allowed to leave out any debts voluntarily.
However, it may not always be easy to remember all of the people you owe money to.
If it has been a long time since you borrowed the money or if you owe money to a large number of different people or banks, you may have lost track of who is still owed what.
Check your credit file
The best way to check to see who you owe money to is to get a copy of your credit file. This will list all of your unsecured debts and how much thee is outstanding to each one.
You can get a copy of your file from any of the major credit reference agencies (Experian, Equifax or Call Credit).
All of these agencies will be able to sell you their monthly online credit file update products. However, for the purpose of simply checking who you owe money to and how much, you simply need to order a one off copy of your file for which you will have to pay just £2.
Sometimes one agency may hold information about your creditors that another has missed. As such, given you will only have to pay £2 for each file, it is always worth ordering a copy from at least two of the agencies.
Adding missing debts
If you have already started your individual voluntary arrangement but then discover that you have left out one of your debts, this cannot just be added to the agreement at a later date.
Whether a new debt can be added to your IVA or not will depend on how much it is for and the effect that adding it will have on your other creditors.
If the new debt is relatively small and by adding it to the IVA, the amount that all the other creditors are paid reduces by less than 10 percent, then the debt can be added automatically.
However, if by adding the new debt, the amount each original creditor will receive falls by more than 10 percent, then the new debt cannot be added automatically. Instead, all the original creditors have to be given the opportunity to agree to allow the new debt to be added or not.
If they do not agree, then it cannot be added.
In this situation you must keep up your IVA payment or the arrangement will fail. However, the creditor which has been left out can still try to collect their debt and take further action against you.
Such action could include applying for a county court judgement (CCJ), charging order against your property or an attachment of earnings order against your wages.
As such, you will always have to try and make a reduced payment agreement with the missed creditor to ensure no further action of this type is taken.
Do not know your outstanding balances
If you are unsure exactly how much you owe one or other of your creditors, your credit file should give you some information.
Alternatively you can always call up the creditor in question and ask them to send you the outstanding balance in writing.
If you have an outstanding loan, you should not use a settlement figure as the amount to include in your IVA.
The way to calculate the true outstanding balance of a personal loan is to multiply the number of payments you have left to pay by the monthly payment that you should normally make. This will give you a total balance including all interest payable.
If you are a sole trade, you may have a debt with HM Revenue and Customs.
Before starting your IVA application, you will need to make sure your accounts and tax calculations are up to date so that a true reflection of what you owe up to and including the most recent tax year can be included.
Get it right from the beginning
Failing to include large debts in your original IVA may have very serious implications. If the original creditors do not then allow the new debt to be included, you will have to try and make informal arrangements to pay this debt.
If you are then unable to make a satisfactory informal payment arrangement with the excluded creditor, they could take further action against you which may then put your whole IVA at risk.
As such, it is always best to make sure you make every effort to remember and include all of your debts at the beginning of the IVA application process.
However, if your IVA is already in place and then you realise that you have forgotten or missed out a debt, make sure that you tell your insolvency practitioner (IP) straight away. They can then work with you to try and find a solution.
If you are struggling with debt, visit www.beatmydebt.com
Our vibrant debt forum gives free access to industry experts and others who have suffered with debt problems.
Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.
Questions and Answers
Article Tags:
personal debt solutions
,business debt solutions
,debt management plans
,iva debt help uk
Debt management plans are one of the most popular solutions for managing personal debts. We investigate how much you will need to pay each month if you want to start a DMP.
It is always useful to have some money saved which you can use to pay for unexpected expenses when they come along. We consider whether you can save each month while you are in a debt management plan.
If you are trying to resolve a debt problem, choosing whether to use a debt management plan or individual voluntary arrangement can be difficult. We consider which solution is the most suitable for you.
If you have debts in the UK but have now moved to a different country either for work or because you have returned home, we consider whether you can still resolve your debt problem using an individual voluntary arrangement.
If you are applying for an IVA and are living with a partner or spouse, we consider whether you need to include your partner's income in your income and expenditure budget.
Undoubtedly, debt management can ameliorate your credit rating. However, at times your debts become so difficult and irreparable that you can't afford to meet all your repayments, in such cases your credit rating is affected.
There were similar concerns raised over the use of email marketing by some debt management companies.
Want to get rid of your debt? First know the factors & common mistakes make with debt. Here are the strategies to help you become debt-free.
One of the main hurdles that most individuals have to get over when it comes to achieving financial freedom is personal debt. There are a number of things that can help you to create financial obligations for yourself--and there are also a few ways to keep your money in order so that you can become eligible for the major purchases you've always wanted.
Do you have a tough time getting debts from your customers? Maybe it's about time to employ a collection agency in Los Angeles. This will deliver much more convenience on your company's debt managing.
The Business minister Edward Davey MP has announced proposals – called Reform of the Process to Apply for Bankruptcy - which aim to save time and money when it comes to "simpler" bankruptcy cases.
There are many different debt management companies. We suggest the things you should consider when choosing which one to help you solve your debt problems.
With the possibility of wages being reduced and jobs being lost as a result of the government cuts, many thousands of people are at risk of no longer being able to afford their debt management plan payments. We consider what action can be taken.
The Government has released its latest official debt figures which show a surprising fall in the number of people who are struggling with debt problems.
Going bankrupt, also known as declaring yourself bankrupt is not something that you should decide to do unless you really understand the consequences and have considered the alternatives.
Discuss this Article
