IVA Rejected but Arranged Structured Repayment Plan to get Finances on Track

IVAs are not suitable for everyone: from time to time IVA proposals get rejected. However, everyone at ClearDebt does their utmost to get people on the road to becoming debt free in the most suitable and stress-free way.

Ms H, a full time carer for her three children, accrued considerable debt during her marriage. When her marriage broke up she found she had to sort out all the debt that had built up during her marriage by herself, as the credit was in her name. Ms H is unemployed and her income comes from benefits.

ClearDebt found that owing to the severity of her children’s disabilities, Mrs H had a surplus amount each month from her benefits, although not sufficient to deal with her debts as they fall due, was enough for a sustainable IVA contribution. Normally we would not propose an IVA for a client whose sole income is benefits, however, the money she gets is guaranteed for the whole duration of the IVA and they are above what she requires to live. In addition, it we considered that Ms H was in this position because companies who had lent to her did so knowing she was completely dependant on state benefits.

Unsurprisingly (to us), Ms H’s IVA proposal was rejected because her income is solely derived from benefits. This left her up a creek without a paddle. ClearDebt, however, arranged a Structured Repayment Plan Structured Repayment Plan. This informal arrangement means Ms H is now paying one regular monthly amount that she can realistically afford and will help her resolve her debt problem. The sustainable plan we arranged achieves a 64p/£ distribution net of expenses: the creditors have agreed that the remaining debt will be written off after 5 years.

Ms H was determined to play fair by her creditors: we think they could have done more to play fair by her.

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