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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Can a Creditor legally increase the amount a debtor owes during

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Can a Creditor legally increase the amount a debtor owes during and after a failed IVA arrangement?

Alex Watts : Hello my name is ***** ***** I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : No.
Alex Watts : The debt is the debt and as such can never claim more.
Alex Watts : Therefoee the creditor can not claim more than the original debt .
Alex Watts : Can I clarify anything for you about this today please?

My original debt was £1423.07, 6 months into the IVA they contacted me and said I owed £1534.21, when the IVA failed due to me losing my job they contacted me again and said I owed £1842.17, I started paying them but over the course of the following 2 years it rose to £2283.48, I have been making regular payments but they keep adding more on, I have now been paying them for 3 years and they say I still owe them £2077.39, what can I do about this situation?

Alex Watts : On what basis are they saying it is higher please?

After the IVA failed they said it was interest that had been added, but it has been with a Debt Collection Agency for 3 years 10 months now so there should not be any interest being added now, so I don't know why it is still increasing. I starting keeping a detailed log of payments I was making and the Debt Collection Agency sent me a letter last week asking me to increase my payments, when I compared the amount the letter said was still outstanding it was £24 more than it should have been so I starting checking all the paperwork and that's when I realised how much extra they keep adding on over the years, at one point I paid them £150 and the following month the amount outstanding had increased by £50 so if that was interest, as they said it was, then it means they charged £200 interest in the space of 3 months.

Alex Watts : You should pay the correct amount you think you owe and nothing more.
Alex Watts : Once you have paid what you originally owed you should pay no more.
Alex Watts : Tell them to take you to court,
Alex Watts : If a judge finds against you he can award what he thinks is right and proper.
Alex Watts : The judge can reduce any fees and interest due,
Alex Watts : They can't just add it and claim it. Any charge must be reasonable and a court can assess this.
Alex Watts : But do not be pressured into paying. Pay the original debt and that is it.
Alex Watts : Can I clarify anything else for you?

No. Thank you for your advice.

Alex Watts : Happy to help.
Alex Watts : If I could invite you to rate my answer please.
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Alex Watts : If you need more help please click reply.


Alex Watts : Thanks,
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