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Can I do an IVA if I cannot remember all of my debts?

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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.

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James Falla is a debt adviser from BeatMyDebt.com in the UK. For more quality and unbiased information on Debt Management Plans, visit our website at... more »

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