When I managed to get into around £30,000 of debt and I was borrowing more money each month just to survive I realised i had to seek debt advice. I called a debt advice company who took all my income and outgoings information before telling me i was suitable for something called an IVA. They explained the IVA would allow me to repay the debt over 5 years and any debt still outstanding at the end would simply be written off. This sounded like the perfect debt solution for me because I could continue to work, earn money and avoid entering bankruptcy.
Entering An IVA
I signed all the necessary documents and began making my payments into the IVA without having any problems, I truly thought this was a great solution. I was told some of the consequences of the IVA such as it affects my credit rating, will stop me borrowing money and I could be made bankrupt if I fail to pay. It wasn’t until 2 years into the IVA I was suddenly told any additional money I receive would have to be paid towards the debts including fees.
Bad Debt Advice
When I received the debt advice I was told any additional income would be paid towards the debt but never was inheritance or IVA fees mentioned. When my mum died 2 years after i started the IVA I received £20,000 from her estate which i planned to use to pay off my debt solution. I was told the all the money had to go towards the debt and the fees incurred for managing the solution which i found to be extremely unfair.
I felt an agreement was in place over the amount I would have to pay for the IVA and this was changed, which I didn’t know could happen. To make matters worse had I been warned prior to entering the IVA that I could been due to pay inheritance I wouldn’t have entered it. I knew my mum was poorly and there was a chance she would die while I was in the IVA so I would have been better off waiting and just paying my debts.
Although I was told additional income would have to be included no one specifically said inheritance would also be included. I did complain to the financial ombudsman however because it was within the IVA which i never read they didn’t find in my favour. While I’m sure an IVA is the right debt solution for some people i don’t think it was right for me and I wish the debt advice was a lot better.
[accordions ] [accordion title=”Story By” load=”hide”]Lisa Doherty[/accordion] [/accordions]