IVA - Individual Voluntary Arrangement

FreshPrince_2

I've entered a IVA about 2 years ago arranged by Payplan. In the last couple of months I've found it very difficult to keep up with the agreed arrangement of just over £400 a month and can no longer sustain it. It is now time for my annual review. I have agreed with Insolvency practitioner to reduce the monthly payment to £300. All well and good but now the Insolvency practitioner want me to extend IVA for a further 15 months which does not sit comfortable with me.. This would mean my IVA would have been over 6 an half years. Beside going bankrupt have I got any other options.

Any suggestions what I should do?

Nargleblast

You could agree to the £300/month for now and use the time between now and your next annual review to a)try and increase your income and b) try and reduce your outgoings. You may then be in a position to resume the £400/month payments, or even more, and can then hopefully come to an agreement to revert to the original 5 year term. I am not surprised you have found things difficult recently, the way the cost of everything has shot up. Just keep your IP fully informed of any change in circumstances.

FreshPrince_2

Thanks for reply. Is it worth me going back to creditors and try to renegotiate £300 I can now afford for the remaining 3 years I have left in IVA or is the best thing for me to do go bankrupt?

Not_so_wise_one

I should think that they have asked you to extend the agreement so that your creditors still receive the dividend that was agreed in your original proposal. You cannot go directly to your creditors to talk about this, so try speaking to your IP and see what they say, make sure you explain your problem. If they are unable / unwilling to help then maybe you have to look at the other option. Good luck.

FreshPrince_2

The reason dividend was reduced was because it was time for annual review and my expenditure have increased. The only advise I got from IP was for them to arrange another meeting with creditors and to propose I extend IVA for a further15 months. I can't help to think this only benefits creditors and IP. As anyone ever heard creditors agree to reducing monthly dividend into IVA from what was originally agreed but stick to original five year plan. To be honest I don't think I could live like this for another four an half years.

pa49

You must remember that you entered into a legaly binding agreement and if your IVA fails then the creditors can persue the whole amount of the outstanding debt.
The whole point in having an IP act for you is so that they can negotiate and agree with your creditors a sum that can be repaid as full and final discharge of the the indebtedness.
If the IP got it wrong (and some do!) then you could argue that the original settlement figures were incorrectly assessed by the IP.
The problem with this is your IP would have to accept their own over assessment and that wouldn't look good for their business and even worse for their future acceptance as 'reasonable' IPs for creditors to acknowledge and trust to complete their work in an equitable manner.
However, remember that the IP is instructed and paid for by you and is required by legislation to act in YOUR best interest and not the creditors.
Push for a majority acceptance through your IP on the understanding that you will increase the payments back up if circumstances allow.
Don't immediately accept an increase in the term of the IVA. You could leave that to a later date.
You just might find that your IPs suggestion of an increased term is so it makes their negotiations with the creditors all the more easy without having to resort to hard bargaining in which it is their job to engage.
Tough it out a little!

FreshPrince_2

Hi
thanks for suggestions will go back to IP and update forum later.

FreshPrince_2

Hi just an update
I've just received reply from IP:

Based on your circumstances and our past experience on voting, creditors will not accept a reduction with out an extension to achieve a same or similar dividend, as originally proposed.
We can only guide you with options. If creditors rejected any new offer, this is a paragraph that has to be put in the circular to creditors, which states:
Should this meeting be rejected by creditors or the debtor be unable to maintain proposed payments, plus clear the arrears that have accrued, the Supervisor be permitted to withdraw from the Arrangement and declare the Arrangement as failed. Therefore, leaving creditors to take whatever action they deem necessary without petitioning for the debtor's bankruptcy.
We would therefore have no option but to fail the arrangement. So it is wise to go back to creditors with a realistic offer.

Is this information correct or is the IP looking out for their own interest. Surely it better for them to propose an extension.
Can anyone help?
Any advise or suggestions would be appreciated.

FreshPrince_2

Hi
Just received email from IP they can offer no advise which will benefit me except to extend IVA. Thinking maybe bankruptcy maybe only option left. Still thinking maybe more beneficial for IP if i accept their proposal of extension to IVA. What the worse thing that will happen if i go bankrupt. If I go bankrupt credit file will be wipe clean in the same length of time as current proposal to extend IVA. What should i do any advise would be appreciated.

skibadee

I have an IVA with CCCSVA which I've missed 3 payments on....my IP is applying for a variation to drop payments from £196 to £146 which would mean me making additional payments for about 4mths from what would of been end of IVA..they say that considering the present economic climate they are pretty sure creditors will agree to this....meeting is on April 7th.

From my point of view if creditors don't accept then I will be declaring BR.

It is not an easy decision to make FreshPrince....and I cannot advice you what to do.....personally if I had to pay for another 15 mths I would seriously consider BR.

FreshPrince_2

Hi folks
I've been advised by IP that these are my options:

Redex- Reduction in payments and extension in the term.
Bankruptcy- Seek advice from Citizen Advice Bureau.
DMP- Payback the full amount of the debt, with a surplus you can manage.
Maintain the IVA as is stands’

I've been advised that creditors will not accept a reduction in payments with no extension in the term. Is this true? As anyone out there had any experience of creditors excepting a reduced dividend after IVA as started. IP not willing to negotiate on my behalf suggest it would be a pointless meeting. Is this true?



Can anyone help?:A