Have an IVA but now need out...How?

Fweckles

Hi Guys!
Two years ago I was in debt by £88,000. I was borrowing from 'Peter to pay Paul' constantly, and then it all hit home for me. I sold my house and used the equity to pay £18k off my debts, but I still couldn't cope with the outstanding debts. Evenutally, I started my IVA in September 2008, and the debts stood at £51,000. I have to pay £530 per month into my IVA, and by August 2013 I will have paid back £27,030 to my creditors (I think this was approx 48p in the £). All my debt was unsecured. After selling my house, I got married and now live in a rented property with my disabled husband. I have no assests. I have worked for the same company for the last 7 years, but found myself in a redundancy situation in the last few weeks, it has been extremely difficult and a very worrying time for us both. I informed my IVA company of the situation from the outset, and have kept them updated all the way through. I should point out that I have never defaulted on my normal £530 a month payment, despite the fact that it leaves us very tight every month. My company that has made me redundant, I have been with since graduation, and had worked my way up the ladder to a very senior position within the firm. Unfortuantely, the company is closing, hence my redundancy, and as a result of this they have provided me with statutory redundancy, but also damages for loss of office/breach of contract. I advised my IVA company of this, and they have now informed me that the sums are considered a windfall and I am therefore expected to pay the whole sum/s over to them as extra money for my creditors. I am very angry about this. I expected to pay the redundancy and unpaid holiday element but I was not anticipating paying over the damages awarded. To be honest, I have had so little money to live on the last few months, everything in life has pretty much gone to pot, I am driving a car with no brakes, a broken exhaust etc etc. So I was hoping to finally use this 'damages' money to pay for some of the things that need sorting in my life, i.e. dental treatment, car etc etc. When they set the IVA up, they gave me measly maximum amounts for everything, £10 for car repairs per month, £10 dentistry etc etc.... these are just 2 examples, and so far my dentistry in the last 9 months has cost me £700 compared to the £90 they allow and the car has cost me £480, compared to the £90 allowed, hence, why I have no brakes and a noisy tin can sounding car!! Grrrrrrrrrrr... Sorry I am going on now.... anyway, as may be apparent I am rather fed up and peeved about it all, and am not willing to part with the damages money, so what can I do? Do I have to file for bankrupcy? Do I have to wait for them to breach my IVA? I know nothing about bankrupcy at all, it seems according to my paperwork it was considered by my IVA company but dismissed... Please can anyone help me? I would really appreciate your thoughts and suggestions and thank you in advance for these.
Forgot to mention, one bit of good news was that I did manage to secure a new job which started the day after I became redundant...
Thanks
Fweckles

skibadee

Not sure I can help but someone with more imformation will be along soon I expect
....who is your IVA with?
I'm in an IVA with CCCSVA...approved Sept 2008....struggled for first few months but met payments, then OH's maintenance payments were put up by £100 a month so in April had variation on IVA reducing it by £50 a month...made 1 payment then one of my non-dependents moved out so lost another £180 a month..consequently...contacted CCCSVA.....after discussion have decided to go down BR route..not one I wanted to take but have no alternative now.

I am waiting for IVA failure notice...which aptly cold be another 6 - 8 wks.....aptly have to miss 3 payments [ which I have now ] then CCCSVA contact creditors and inform them IVA has been breached and give them option of petitioning for my BR....they have to be given 28 days before failure notice can be issued.

If I was in your position I would stop your payments to IVA and save that money to petition for your own BR......unless the company your IVA is with is one that petitions for your BR itself on failure [ some do ...just means you won't have to outlay the £510 BR fees ]

Well done on securing anothe job.

keithpb69

hi, sorry to hear about all your problems, i did work for a large bank and dealt quite a bit with people in your position, personally in your position with no assets i would apply for br, company's try to get people like yourself you on an iva because of the amount of money they make from it, with the equity you got from the house you should of been advised to offer short setts to each creditor and i'm 90% sure they would of accepted think it's quite bad they take advantage. in regards to the sum of money you will receive from your previous employer, i would use this to sort the things you need and make sure you keep receipts as i'm sure they will look into where the money went when you apply for br.

i would take independent professional advice before making any decisions, maybe go to cab.. hope things work out for you.

Fweckles

Thanks!! My IVA is with CCCSVA too, therefore would it mean that I have to do the same route as you, i.e. miss 3 payments for the breach to occur and then wait for the creditors to apply for bankrupcy?

peachyprice

Hi Fweckles, you do have to miss the 3 months for the IVA to fail. You may or may not need a certificate depending on your particular court.

Unless your IVA has a clause that they will pay your BR fees, it's highly unlikely any of your creditors will make your BR, unless you owe HMRC or AMEX, and you will have to pay the £510 fees yourself, so just put one of the missed payments to one side to cover this.

Fweckles

Thanks!! I do wonder though if the court will want to know why my IVA failed, will the court also hold it against me if I have spent all the 'damages payment' before the bankrupcy goes through? I have so many things that I want to pay for and do that there won't be any money left from the 'damages and redundancy' within days of receiving it, let alone in a few months time when someone makes me bankrupt....

skibadee

Fweckles wrote: »

Thanks!! My IVA is with CCCSVA too, therefore would it mean that I have to do the same route as you, i.e. miss 3 payments for the breach to occur and then wait for the creditors to apply for bankrupcy?

Aptly its quite rare for one of your creditors to make you BR...so CCCSVA told me.

peachyprice

Fweckles wrote: »

Thanks!! I do wonder though if the court will want to know why my IVA failed, will the court also hold it against me if I have spent all the 'damages payment' before the bankrupcy goes through? I have so many things that I want to pay for and do that there won't be any money left from the 'damages and redundancy' within days of receiving it, let alone in a few months time when someone makes me bankrupt....

As long as you keep receipts and you've spent in on genuine needs there's not alot that the official receiver can do. They would be miffed if you spent it all in a luxury cruise around the med, but if you spent it on all the things you had to go without whilst making your unreasobanly high IVA payments it would be fine.

It's the official receiver who deals with the nitty gritty of bankruptcy, and that happens after the court has already made you bankript. At court all they really need to know is that you are insolvent and that you have taken advise and are fully aware of the implications. They won't go into your spending etc., before they grant your bankruptcy.

HTH