failing IVA in our last year

cupasoop

hi all.
my husband and i have been paying our IVA for four years.
we have just had our last creditors meeting and our last income / expenditure review and we are now faced with payments we cannot afford.
our payments in the first year were £299.00. from march 2010 they will be £865.00 per month. and up to then £729.00
we have told our iva company that we have no chance of meeting these payments, they said that the creditors have refused to take a lower payment and there is no room for negotiation. they have tried to tell us that it would be a shame to fail it in its last year and we agree, but they offer no other way.
my question is this, what happens next. will our creditors contact us? will we have to go bankrupt or will we be able to make an arrangement to pay them direct?
to be honest, i have very mixed feelings about the whole situation. part of me is just uninterested any more. we were promised 'debt free in 60 months' but this IVA has ended up costing us money and wasting 4 years.
we both work full time, if we go bankrupt, how much will we have to pay?
we live in council accomodation and have no assets worth mentioning.
please give us your experience, we thought we'd sorted this once. x x x

tech2_2

Personally we have look at this as an option but as it is not policed correctly by the FSA I am very reluctent to take this option for exactly the reasons you have listed!!

You need to ask tigerfeet2006 or philacadamy or even the person with the thread What do you think to my statement.

What a shame. bet you wish you had go BR in the first place wouldl be long gone by now

Felling for you both.....:o

cupasoop

they IVA peeps say THEY are stuck between a rock and a hard place - spoke to them several times today and they dont want us to fail but they said at the last creditors meeting(nov 08) they were not prepared accept any amendments - completely non negotiable . When i say we cant afford it -our inc/exp shows us as being able to afford approx £625 and i quote "although they know it will be a tough 12 months it will be worth it by next oct" I said they can see the figs on paper and we cant get blood from a stone but he said we would have no option if we fail - BR as the int and chgs on the original debts would be added back on and we would owe more than when we started!!We just dont know what to do for the best - struggle and I mean really struggle for the next 12 months or chuck it all in and let the BR go ahead? How bad could it be?? Read so much conflicting about BR - like i said we have NO assets but fairly good incomes so would def end up with and IPO and thats not a prob we always wanted to at least try to pay something back but how much hassle would it be? were fed up with paperwork and forms justifying what we can and cant afford - just want a resolution to all this mess - all we seem to have done is pay the IVA lot £8000 in fees an left !!!!!! all for the creditors

Tinytim

Hi cupasoop,

I really do feel sorry for you, and from what you have written, it would appear on the surface is if an IVA was never the correct solution IVA' s can be very usefull for those who have equity in a property they wish to protect, or will be unable to follow a particular occupation if made BR - this doesn't seem to be the case for you.

Firstly, you should seek advice from CAB, National Debtline or CCCS who will be able to explain your options and the ramifications.

However, it may be simpler to ignore the last four years and look just at the year ahead. The effect that an IVA has on your credit file is almost as bad as a bankruptcy, and many lenders do not distinguish between the two. Whichever you choose, both will be over in a years time, and both will then show for the next six years on your credit file. If the IVA can only survive with a payment of £865, it is likely that an IPO would be substantially less. If it was less than £288, then the IPO would be cheaper overall even though it was to run for three years. If you really do have a surplus of £625, then the IPO would be £437 (I think), but the allowances for expenditure in bankruptcy tend to be far more generous than for an IVA, so it may well be much less. Why not post up an SOA and we can have a look and make suggestions.

It is irrelevant what interest and charges the creditors add to the original debt, as they can only receive what the OR deems is their share of any IPO/A which is set, and their share of any other assets such as cars that might be sold as part of the BR.

debtinfo

If the IVA has worked out a surplus of £625pm how come they are asking for £865pm

cupasoop

no the income / expenditure shows we ca only afford £625
the IVA is demanding £865

RichesToRags

Sounds to me like they are putting the pressure on because its the last year and they know you can see the finish line just beyond your reach.

One of the main criteria of an IVA is that you can afford the repayments and you obviously cannot. The allowances on an IVA are tight to begin with, without them trying to squeeze and extra £240 out of you.

I can't understand why you have been entered into an IVA in the first place when you have no house to protect, unless it's because of your job?

You need to ring one of the debt charities and get some impartial advice because you are getting nowhere with your IVA company. They will act all understanding and blame the big bad creditors claiming "our hands are tied missus" they get a % of whatever you pay.

peachyprice

Hi cupasoop, pop up your I&E here, we can see what they're allowing for the IVA, see where they think you're going to miraculously muster up the other £240 from, and give you an idea what your IPA would be if you were to throw in the towel and go bankrupt.

One thing to add, if you do back your crreditors into a corner and convince them you can only afford £625 or go BR they may insist on adding another year to it, which is a whole new ball game.

Use this calculator and same it for MSE at the bottom, you can then copy & paste it here. Don't worry about filling in the debt bits.

http://www.makesenseofcards.com/soacalc.html

HTH

dorisday

Hi reading this has made me feel so very very angry!!! An IVA was probably the most unhelpfull thing you were advised to do. They all so greedy. Take heed of what is written above and try and get some advice about this. Is this a fee paying company you went through. This is your last year and you should be feeling very happy thinking that its only a short time to end but instead you have had a bombshell dropped at your door. Anyone reading this and considering an IVA there are other options to take where you are in control. Best of luck.

cupasoop

Hi everyone,thanks for all of your replies, it is nice to know so many people take the time to read and comment. we entered the IVA because my husband in particular was very anti BR -4 yrs ago ivas seemed like the new 'magic wand' and our compnay did seem to make it look very attractive.. We started off paying 240 per month but then subsequent reviews and salary increases have led to the increase in payments - just for info our youngest daughter has a severe disability and gets the higher DLA and Mobility award - the IVA INCLUDES her DLA even tho we have questioned this on many occasions only to be told ALL income counts as income - does anyone have any info on this? I also used to get carers allowance for her too but this was overpaid when i went back to work ( i didnt realise there was an earnings limit) so now im £202 pm worse off and im havin to repay DWP at the rate of £50 pm - all of this is falling on deaf ears with our IVA - they still say we should "knuckle down and try to manage the last 12 months" and "my family should understand the cutbacks"!!! We really are confused as to what to do - really tempted to go for the BR - i would stop work to care for my daughter instead of killing myself working and trying to juggle it all and i suppose then any IPO would be for a very little amount? thanks again everyone x x:o

debtinfo

hi, have you posted on the IVA sub board as they probably come across this more often