Debt Free Direct - used DLA in IVA bound to fail fron day1

[Nick Pearson]

i'd get reclaiming PENALTY fees on the cards and catalogue debts first.

 

dx

 

Assuming either a DRO or bankruptcy is the best option for Lucky7seven, why bother? If debt total near to £15k limit for a DRO then I can see why you might try to reduce the debts but otherwise you may as well be hung for a sheep as a lamb surely.

[Lucky7even]

i've been on an iva with debt free direct since june.

 

beyond my control, i've had an increase in outgoings and can no longer afford the iva.

 

i have spoken to several companies who handle bankruptcy and it will cost me around £900 to go for bunkruptcy.

 

this is money i haven't got.

 

i need the debts to go because of the mental stress of coping with them and the affect its having on my health.

 

is there anyway i can get help with this £900!!??

 

i simply cannot get this amount of money and am stuck

 

[patrickq1]

Just a thought do u owe hmrc if so let them make the order for brupcy then it cost nothing also advise all those who want money

 

 

If u owe hmrc let them go for bankrupt against u then it don't cost anything

[Lucky7even]

my debts are a loan, 2 credit cards, and a catalogue. what if i let the iva fail? could they apply for make me bankrupt??

[cerberusalert]

For possible financial help with bankruptcy/DRO see; http://homepage.ntlworld.com/stuart.blackstock/funding/bankruptcy_fees.html

[stu007]

Hi

 

If you are considering this option I would advise going to your local CAB and ask to speak to debt management they will be able to advise you on this and the potential costs.

 

These PDFs from the Insolvency Service may be of use:

[Lucky7even]

Going bankrupt doesnt bother me in the slightest because I have no interest in getting credit in the future, and I dont own any property either!!

 

As I cannot keep paying for the IVA, I have no option!!

 

Bloody Halifax were to blame for keep lending me all this money without checking affordability!!

[42man]

Bankruptcy should only be a last resort and I am sorry to hear of your situation, you can of course as has been said above write or email your creditors inviting them to make you bankrupt, explaining your situation brielfy. Please try and relax, the stigma of bankruptcy isn't what it used to be and it is how you come stronger out of bankruptcy rather than the fear or stigma of entering it....I presume you don't owe a property ?

[sequenci]

Given what you've said it's very likely that there is no beneficial interest then.

 

Who advised you to take the IVA? Did you seek independent advice?

[Shelley181146]

Hello Lucky7even,

I have read your threads in respect to your current situation and understand how you must be feeling.

Firstly, If you are not married or in a Civil relationship then you are not categorised as having an interest in the property.

Secondly, Bankruptcy is expensive to do yourself. Therefore, go your your local Citizen Advice Bureau and request an appointment with a money advisor. Take along ALL your paperwork for your debts including the paperwork for the IVA which you have been involved with, also proof of ALL your income and expenditure. The advisor will go through all this with you and see if you are leigible for a Debt Relief Order (DRO). These are payable at the Post Office once the CAB advisor has done all they need to in respect to your Credit File and it will cost you £90. You can not get your DRO registered until you have paid the fee in full but once it is registered, you are clear of your debtors. The advisor may require a written letter from the person who owns the house to explain the nature of your relationship and the ownership status of the property (a hurdle you will have to overcome) but will be worth it in the long run.

The CAB advisor will also communicate with the IVA organisation on your behalf to explain what is going on which should also relieve you from additional stress of writing to your creditors.

 

Worrying is not constructive - stay strong - hope this helps?

[Lucky7even]

I am on contributions based employment support allowance and I also receive DLA.

 

I went onto an IVA in June 2012 through Debt Free Direct after seeing their ad on the tv.

 

I have 4 creditors, x2 debts with Halifax, credit card and catalogue.

 

My income in benefits is around £900 per month.

 

I pay a contribution of £130 a month towards the IVA.

 

However, after I have paid my bills, etc sometimes I have no money.

 

I really cant see the point in keep carrying on with an IVA.

 

I would like to know if bankruptcy is a better option.

 

My debts total to around £15K.

 

Halifax were largely at fault because they kept lending me money without checking for affordability.

 

I dont have any assets, and no savings.

 

I do live with a partner but he is not on any of my debts, and nor am I on the deeds or mortgage.

 

After next year, my benefits are up for renewal and I might not have an income then anyway.

 

Is bankruptcy a better option please?

 

Thanks.

[Andyorch]

Thread moved to the appropriate forum.

 

Regards

 

Andy

[sequenci]

Hello there.

 

In short very likely. In fact if your debts are under £15k you may be able to qualify for a Debt Relief Order.

DFD should not have used your DLA money when calculating how much you can afford to offer your creditors.

 

The only potential issue I can see is whether or not you have contributed towards the property in any way - as this could create a beneficial interest, as such it could be implicated. That said, I have NEVER come across a scenario like that before - and I help people through the process for a living.

[Lucky7even]

Does this mean I might have a good claim then against DFD for including my DLA money as income!?

 

Can I argue my IVA then is therefore not legal?

 

How easy then would it be to cancel the IVA and perhaps go for a Debt Relief Order?

 

Before I moved in with my partner I have paid things like utility bills, and food bills.

 

My debts have been caused by vet bills, and living costs.

 

I have actually lost money since living with my partner because I have lost a benefit called a disability premium costing me £53 a week.

[sequenci]

You may be able to under a formal complaint as it's generally accepted practice that DLA is to not be used as income UNLESS specifically agreed by you.

 

It is likely that it is still legal.

 

You would have to await for the IVA to fail. This is usually undertaken by missing payments.

 

A word of warning, if the IVA does fail - you could be liable for DFD's fees still - this may put your debt level over £15,000 - as such you may not meet the DRO requirements.

 

Your best bet is to run your situation by a debt charity such as the CAB or National Debtline.

[Lucky7even]

Thank you.

 

I think its probably best if I go and speak to the debt advisor at the CAB next week regarding this.

 

What would happen if its agreed that DFD should not have used my DLA?

[sequenci]

You may be able to put forward an argument that the IVA was mis-sold. This could be useful as if they can fail the IVA without charging you admin fees it could put you in a position where a DRO is possible.

 

In case you need it, here's the IVA complaints gateway information: http://bis.gov.uk/insolvency/contact-us/IP-Complaints-Gateway

[Lucky7even]

The other problem I have here is that a standard IVA is for 5 years.

 

Halifax, which is my main creditor demanded that this be increased to 6 years, forcing me to pay for longer which I feel is unacceptable.

 

Can I also ask where do I go to find out if they should include DLA as income!?

 

And do I bring a complaint to the Financial Ombudsman Service about the IVA being missold?

 

Also before the IVA started, my debts were as follows:-

 

Halifax Loan £7000

Halifax Credit Card £3200

MBNA credit card £900 ish

Catalogue was around £400

 

DFD claim the outstanding debt is around £14K.

[dx100uk]

DLA cannot be used!!

 

 

dx

[Lucky7even]

Just an update on my situation with Debt Free Direct.

 

I spoke at great length to National Debtline end of July 2014.

 

They did an income and expenditure and said I was under the £50 for a DRO.

 

DFD have said that all I have paid into this IVA is £2790.

 

Most of which will be taken by their fees, so I have paid into this for nothing!!

 

They are still insisting that I get £962 a month, however this is not the case as £888 goes into the bank.

 

What I am really annoyed is that they took my Disability Living Allowance as income and used it to pay my creditors, which is why I could not afford things like going to the dentist and my teeth and gums are now in bad shape.

 

They said it will now take up to 6 months to close the file down.

[dx100uk]

I would be getting the FCA/FOS involved in this

 

 

dx

[Lucky7even]

I would be getting the FCA/FOS involved in this

 

 

dx

 

I have just sent the FCA a very lengthy complaint via email. FOS are useless.

[citizenB]

They cannot use your DLA for your debts ?

[Lucky7even]

They cannot use your DLA for your debts ?

 

I believe they were which is why it was calculated as income and how they got a figure of £962 per month!!

[Lucky7even]

To cut a long story short been in an IVA for over 2 years with Debt Free Direct.

 

For the past year they have been a bloody nightmare.

 

Wanting an increase in my monthly payments making the IVA unaffordable I had to cancel in July.

 

They took my DLA as income and were using it to pay off my debts which I was furious about.

 

Prevented me from having essentials like dental treatment, and other things.

 

At the start of the IVA I repeatedly told them I had no PPI on any of my debts as I didn't qualify being on benefits.

 

They then past my details on to Equity In Finance without my consent who repeatedly phoned me and sent me forms!!

 

Again each time I had contact I told them there wan NO PPI!!

 

Today I have been sent yet more forms from Equity in Finance wanting to chase for PPI!!

 

I cannot believe this!!

 

I told DFD in an email last week that there is no PPI and they are wasting there time in chasing things that aren't there!!

 

I think they are dragging their heals over this

and making more problems so as not to close the IVA down as they are fully aware I need the failure certificate to apply for a Debt Relief Order.

 

What can I do to make them see sense about no PPI being on the debts?

 

Debt Free Direct's behaviour the past year has been appalling in general, but especially making the IVA deliberately unaffordable so it failed.

 

Am at the end of my tether with them!!