Questions about Individual Voluntary Arrangements and Insolvency.

Moderators: TalbotWoods, JaneClack

Byriddles
#24742 I have posted previously in the main debt forum to explain my position. - Thanks for the advice recieved there.
Basically, my fiance and i have split with secured debts in joint names which have a net position of £30K owing. There are also £55K of unsecured debts in my name that were run up jointly, which suprise, suprise, he won't help on. While we could afford the reapyments together, I cannot on my own.
We need to sell the house to clear down as much of the secured debt as possible to allow me to file for an IVA on the unsecured. My question is if my family lend me £15K to cover my part of the net secured amount owing, could this be included in the IVA? I have read that family / friend debts can be but I'm not sure, particularly with any timing rules ie does the debt have to have been made a certain time ago?

Another question re IVA's is that when people say they are paying i.e. 50p in the £ does this mean 50p in £ of account balance at the time of arranging the IVA or 50p in £ of total contractual payments? The total contractual payments will obviously be alot higher as they will contain future interest. - I am really confused about this - any help to clear this would really help.

Thanks - finding this forum has been invaluable.
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ByNicky
#24841 Hi. From what I understand, the debts can be included, but they will not have voting rights. Also, they are requested to stand down on their rights to receive monies through the IVA until the end of the arrangement. so it could be 5 years before they see any monies being paid to them. Creditors are favoured over family basically.

That is basically the gist of it, not very well explained really. Hopefully someone else will be able to elaborate in it, but it gives you the general idea.
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ByJaneClack
#25012 Generally they are asked to stand aside. The reason for this being that creditors know that people feel morally obliged to pay back family and friends in full and so they should wait until the VA has finished until they pay them back. They certainly used to include them and family members were always very disappointed when other fees reduced the dividend - which happens a lot I have to say. Similarly using family money to repay other loans can lead to a lot of friction. I should also say that if the secured loan is joint then you are both joint and severally liable and if partner decides to leave the country for example you will be liable for the whole lot.Many people think it is 50/50 but it can turn out to be 99/1 for example.
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