One thing I have heard for years, but also more recently, is those who are in an IVA or a Debt Management Plan, and either did not include all their debts, or obtained additional credit and debt, whilst in the repayment plan.

Not a good position to be in.

So what has occurred is that now by taking on additional debt, they can no longer service the repayment scheme, IVA or DMP, they had placed the other debts in; or that they had not placed all their debt sin the scheme and now are experiencing trouble servicing it all.

So what can happen?

If they did not place all their debts in the plan and attempt to add those debts to the plan now, it changes the entire repayment plan which means, in most instances, all their creditors need to be notified of the change and at that time the creditors could reject the new plan.

They may reject it based on the fact debts were withheld, for whatever reason, and now the plan is not as strong as it previously was.

If someone takes on new debt(s), applies for credit, whilst in a repayment plan, this can be seen as a violation of the plan, and as such the creditors can reject any offers.

As to may be the next step for a person who finds them self in this position, for many bankruptcy is a strong option.

Of course if there is property involved it may be they just need to try and limp along or continue to pay what they can and see what their creditors may or may not do to collect the debt.

The point of this is that if you are considering a debt repayment plan such as an IVA or Debt Management Plan, all your debts need to be placed; and if for any reason you are able to obtain any new credit, you can be in violation of the repayment plan.

Lastly, if you do obtain additional credit whilst in a repayment plan, and then need to go bankrupt, it may be viewed by the Official Receiver as a misuse of credit and could possibly place you in a position of receiving a restriction order.

So as you can see it is best to get these matters set up correctly in the beginning and know and abide by the terms and conditions set out.