IVA had creditors meeting....now freaking out!!!

james78_2

Hi,

I have around 46K of unsecured debt on credit cards and a loan & student loan. 12K of it is student loans (which has to be paid back anyway) so were really talking about 34K...Yes I've been stupid, living beyond my means for 10 years, and drinking myself into a depressed state thinking it will all go away...well this year i decided to do something about it....

I thought my only option was to do a IVA,....so Payplan made me do a I&E with my partners income - but I wasn't happy about this....she's a trainee and gets different amounts each month.....so I just entered a rough figure.....I don't want her to be effected by this and I haven't even told her....

It's not a joint IVA.....she has never given permission to hand over any payslips either. Don't know why I could have done a I&E just me on my own - Paypl;an said they will reject it if i do.

Anyway to cut a long story short the creditors meeting happened this week, they want me to pay monthly x 24 payments £230, then x36 payments £535 (when my HP ends)

Add this up, and it's around £25K I'll be repaying instead of £34 K - so they are writing off around £9K debt....

BUT I really didn't expect such a high figure for the last 3 years and am worrying if this is gonna be possible. My income after tax is £1.4K ish per month......

My half of rent is 5-600, and after bills etc I have £230 left......

What happens if stuff changes in the future, like jobs, wages, getting a house, moving, emigrating, having a kid......I want to have a life! I want a holiday sometime and to actually have money to go out....feels like a prison..... is £540 too much.....I'm freaking out now and don't know what to do.....how do I explain me always being poor to my wife. I can't tell her any of this at the moment as currently recovering from a chronic illness.

Shall I just go bankrupt instead? I mean I know 'll loose my car (HP - unless it can be changed to my wife's name....?) but I don't own a house, have no real assets - normal stuff like TV's, computers, a guitar , clothes , furnitures (my wife bought most of it anyways)....

We rent at the moment - will me going bankrupt effect this, will it effect her? Will even the IVA effect her?

Or shall i just start paying it - I have 4 days to decide - by then the paperwork will be here and I have to sign it.

I'm totally freaking out and hate myself for getting into all this in the first place,

I really need impartial advice from you guys.

skintflint103

OK mate calm down you are in a big big club. I have being saying on this site to the derision of many that this partner thing is rampant. If your partner agrees to go in the iva to 'share' her income with you I think she will be ill advised. she will go on the insolvenct register with you for 63 months. No credit mortgages etc etc for at least 6 years. If you have no assetts (nobody comes to your house and takes your things, it's an old wive's tale) you will be out of BK in 12 months max off register in 15 months. You may have to make a contribution to creditors for 36 month, however that is only if you have more than £90 p.m. free after all your legal living allowances. Your car is ok as long as it it would not be worth more than £2500 if the finance were paid off (ie car value minus balance of hp) you can't change your car to your wife, not allowed unless she buys it for it's value. You will not get your name in the paper and should not have to see a judge. It will not affect your wife if you do a deed of dis association. Be very very careful with that IVA if you have no assetts look at their fees against £510 to go bankrupt. Don't take any notice of the 'comparison' of bk to iva , it's there to frighten and mislead. You will only pay £510 period. Decide in haste repent in leisure but please don't get your partner into this she will never forget it.

RuthnJasper

James, sweetie, you are going to be alright.

The past is the past and cannot be changed by anyone. You have done the right thing NOW in being brave and facing up to the situation and taking steps to deal with it. That in itself is an incredible achievement and you should be proud of yourself for it.

I have an IVA, which has another couple of years to run. My circumstances changed dramatically last year and I could no longer afford to pay back my IVA at the original rate (around £380 per month). I wrote to the IVA company, explaining my circumstances and supplying evidence (like rent statements, council tax bills, etc.) The IVA bods had another creditors' meeting and agreed that my payments could be reduced to £157 per month - although they tacked an extra 12 months on the length of my IVA to make up for it.

Once you have the IVA, and you are reliable in repaying the monthly amount, you stand a fair chance of renegotiating your repayment rate should something change significantly in the future. One of my colleague's friends was also successful in getting a lower rate on her IVA in similar circumstances.

I probably wouldn't be much use on your other questions - but I hope that what I have said is at least helpful in some small way.

One day, all this will be behind you and you have already taken action to get there.

Good luck to you.

x

Choo_Choo_4

James ... sounds like you're in a bit of a panic indeed ...

Just take a wee time out and think about this for a bit first. The IVA proposal has been made and now you have a few days to decide if you want to proceed with it or not (Payplan should've gone through this in great detail with you first, to ensure that you knew the ins and outs before this point ... so that you were sure about the IVA at the offset rather than a few days before approving it)

Firstly considering the IVA - it is your IVA and if YOUR circumstances change then so must the circumstances of the IVA...I'm not so sure about the emigrating bit right now (perhaps this should have been something considered before looking into IVA) but having kids, changing jobs etc - your financial statement will have to be revised to make sure it's realistic and affordable ...

Having holidays might have to take a back seat for a while - I don't know how your creditors would feel about you taking off for a few weeks holiday when they know that you can't really afford it and they will lose out.

Is there a balloon payment when HP expires? This will need to be looked at as well and in 2 years times £535 might not be realistic but usually if a big payment in HP stops then this must be brought into IVA as you're no longer paying it.

Finally the last thing I can say James (relating to IVA) is - you have simply given your partner/wifes DETAILS - she is not in the IVA, will not be treated or listed as being in an IVA ... she has no debt (presumably) and the only purpose for her details being brought in is to work out how much of WHAT IS LEFT OVER EACH MONTH is to be allocated to YOU for the purpose of the IVA... i.e. if you earn 75% of the household income then you will pay 75% of bills etc and 75% of what is left is allocated to you - her money is STILL her money. SHe's not contributing - just allowing an accurate picture of household finances to be drawn up!

Bankruptcy is obviously still an option for you ... you don't have a property and car is currently on HP. A joint I&E will still be done to see how much YOU have left each month and if this is £230 then you might also have to pay this in Bankrutpcy - same thing happening with the increase when HP ends.

All household goods are exempt in bankruptcy so no need to worry about that.

Going bankrupt will NOT affect you renting to answer that question and being bankrupt OR in IVA will not have an effect on your wife so long as none of the debts are in Joint names (as she would be liable for the remaining balance on these)

Don't panic James ... sit down and think about it. Discuss how you're feeling again with the IP if you want. It might be an idea to give your wife the benefit of the doubt and discuss this with her - she might be more upset at you making a big decision without telling her. She might want to help in making the decision.

Good Luck James whichever way you go!

Charco_2

You have more than four days to decide... when the IVA Paperwork arrives, read it, put your feet up and have a cup of tea, put it in a drawer and think about it... Only sign it if and when you feel comfortbale!

The Bankruptcy Comparison is NOT there to frighten and mislead you... it's there for your creditor's benefit not yours. It shows the creditors that if they reject the IVA and you enter into bankruptcy then they will get next to nothing compared to whatever p in the £ you are currently offering! The Bankruptcy Comparison is only drawn up LOOOOOONG after the client has indicated that they wish to proceed with an IVA. (It generally shows that no matter how much you are required to pay in to a Bankruptcy, there will still not be much left over for the creditors!)

As I've said before, a little knowledge is a dangerous thing... Skint your posts show that you have a bit of knowledge, you heard this or that, but instead of finding out the real reasons for things you simply take the cynics path of least resistance. Cast a dark shadow on everything!

James - The only reason your partner's information would be included in your IVA is to help you out.
- Your IP needs to work out how much disposable income you have to offer. This means he needs to know how much you're paying towards household bills to take that away from your personal income - he also needs to verify that you are only paying your reasonable share of those bills (if you earn 70% of the household income you pay 70% of the bills - simple!).
- If your wife agrees to contribute towards your IVA she will not go on the Insolvency Register. She will not be declaring herself insolvent!

Why would she want to contribute?
Well if you look at it in terms of your creditor's who will likely reject an IVA that does not reach a certain dividend for them but if your wife was able to/willing to contribute say £50 or £75 a month (that's between £3,000 and £4,500 over five years) which would raise your dividend by 5p or 10p and make it more appealing to your creditors... The alternative is that as a household you struggle with the whole amount of the debts!

Skint thinks this is unreasonable. I don't. But sure make up your own mind.
DO NOT SIGN ANYTHING UNTIL YOU FEEL COMFORTABLE

(Skint, I know you'll shoot this down immediately coz you're never wrong, but do you think it is at all possible you are mixing up actual JOINT IVAs with a mere SINGLE IVA that a partner just happens to contibute to? I only menion it because that's what you're describing!)

skintflint103

I'm confused about a 'joint IVA' I thought 'I' stood for individual? there are no 'joint IVAs' that I have yet seen, all are recorded separately on the insolvency register with a separate number ,even if married and both with debts. You really don't need to be so patronizing either , if you feel that every one is responsible for every one else in the household, then what about working kids, they contribute so they are adding in too? Granndma's pension? Grandchild's child benefit ? I know ; 'Don't be silly billy skint it dosn't happen' You accuse me of not having enough knowledge and allways being right. Well my knowledge may be less full because I don't work on behalf of an I.P. co. . However my EXPERIENCE is I beleive far in excess of you both. You know who else. If an IVA is appropriate then it's a good thing, if it was set up as a cash cow for IPs it 's not. There are very few areas of English Law when a person can be made responsible for another's debt. Or am I wrong?

Choo_Choo_4

This is getting silly.

No one is responsible for anyone elses debt - they cannot be.
It's simply a matter of people WANTING to help out or being WILLING to help a partner out so that something can be resolved...but they certainly do not HAVE to ...

Handing over proof of income is not contributing - this is simply to prove the income and outgoings of a household and prove the debtor can afford the proposed payment.

Whether a partner then feels like they want to offer £40 per month to increase the dividend then that is their decision - they cannot be MADE to pay this ...

You were in the mortgage business Skint - right?
Just because a married / common law partner is not named on the mortgage, does this mean that when they split they are not entitled to a % of the equity in what was the family home? They may say that they contributed to the paying of the mortgage therefore they are entitled to some of the equity accrued ...

So how would you work it in an IVA where there is a property with £10k equity and it is only in MR name ..

The IVA would deduct 50% of equity as this would automatically be owing to Mrs (even though she's not named on it) and the other 50% (£5k) would be realised for the benefit of creditors ...

BY your arguments then - the whole £10k SHOULD be brought into the IVA - how can you possibly say that Mrs is entitled to any equity? Just because they're married? .... is this wrong?

.....this is why CREDITORS (not IP) say that if Mr took out £10k loan to put a conservatory on the house that Mrs benefitted from it ... SHE IS STILL NOT LIABLE FOR THIS DEBT but she MIGHT want to help make his case more appealing ... NO LAW SAYING SHE HAS TO THOUGH!

Finally, kids contributing, grandma pensions - that's just silly Skint and becoming petty. If you are saying that this happens and people are being told their elderly mum must pay her pension to cover their debts just because she lives with them THEN PLEASE REPORT IT. IT'S HIGHLY UNETHICAL AND ILLEGAL AND MUST BE STOPPED!!!!!!!!

james78_2

Ok guys,

Thankyou for the advice.

It is NOT a joint IVA - just my name on it - they wanted to know my partners income so I could do the I & E for the household.

The other option was for me to do a DMP - this would take over 12 years to pay back.

I'm just getting more confused - is it worth me just going bankrupt?

what will they do - come to my house - see what they want to take? Take my car? Take my guitars etc....
Then what I pay my disposable income to them ? For how long?

Then after a year it's over?

OR can I know try and get my monthly payments lowered a bit as a counter offer with the IVA? What happens if my partner earns more once she's finished her training? Will they want to see her payslips? I made it very clear to them that she did not know about my debts....I will tell her when the time is right - she is ill at the moment though.

I just found out I need glasses / contact lenses as had an eye test today - can I tell them this to allow £15-20 a month....?

How much do payplan make out of this all? Are there any other alternatives like an agreement with creditors I make myself?

Cheers for the help....glad I'm not the only one on this sinking ship!

J.

Charco_2

Reductio ad absurdum!

Grandma's Pension? Grandchild's child Benefit?

Lets tackle this in order.
1. A Joint IVA
Yes they are of course separate Individual Voluntary Arrangements and are recorded as such on the Insolvency Register... they are JOINT in terms of their inter-locking nature. The monies available in one are dependant on the monies available in another and vice-versa. They are drawn up as the symbiotic other half of a two-piece jigsaw puzzle. The fees charged are charged as one IVA and the dividends received by the creditors are the same regardless of Mr's debt sizes and contributions, Mrs' debt sizes and contributions, and whether the debts are on joint accounts or not.

2. Household responsibility
Of course no-one is responsible for another's debt - and never once has anyone said that! As is being pointed out here, but ignored, is that the IPs understand a debtor living in a household has to contribute to the running of that household... they must not be contributing more than their fair share.
How do you measure fair share?
By comparing their incomes and attributing costs respectively. Alternatively you could say household bills are split 50/50 - but in many cases this will work out worse for the household!
You joke about Grannies and kids and grand kids but it's not really that funny, coz it does happen! Joint IVAs with mother and son who never got married nor moved out. If Granny lives with you and collects a pension then why shouldn't she pay for her own bills - she'll not pay your IVA but your creditors aren't going to be happy for her to pick up a pension and for you to pay all her living costs anyway. She'll likely not pay rent or electricity but there are other things she may contribute towards.
Working kids... you'll not have to see their wage slips or anything but should they not contribute to the bills? Especially if you're in debt up to your eyeballs! They probably pay £50 a month to mum and dad (far less than if they moved out) and that £200 a month needs to be declared on the IVA by mum or dad!

3. "dont be sill skint... experience?"
I doubt it but this is not a who-can-pee-the-highest competition!

skintflint103

to address the point on the mortgage, in marriage split matrimonial law takes precedence. A partner proving an interest may claim part of profit.But what if one person owns and the property gets repossessed does the mortgagee have a right to pursue all occupants of the property? Answer; big fat no and you are trying to muddy the water to suit your master's ends. Only people who have an interest in promoting IVAs could possibly suggest that all persons in a houshold have a duty to contribute. What if they move out get redundant etc,? what if they get a pay rise before yearly review.? It is enshrined in law that in normal circumstance one person can not be held responsible for anothers debts. Except in IVA practice it seems. No one, no one, no one, comes to your house in any type of debt situation unless a court order is in force and a bailiff is sent. mostly for council tax. you don't even have to let them in even then. Although some might suggest that you should cos you do owe the money,on your logic they should be allowed to take some one els'e tv just because the debtor has watched it!. Pleeeeeeze!Debtors living in housholds do not allways have to contribute to households my kids never paid me a dime neither did my granny. According to your warped logic if i were in an IVA (shudder) then they should have paid toward my debt. Pleeeeeeze! Child benefit, dla money, all taken into account. In bankruptcy the OR is NOT ALLOWED to take benefit money. But IPs can.. Very fair

Charco_2

Haven't read it all yet and clearly neither have you.

No-one said there was a duty to contribute to another's IVA or Debt. Far from it - it was specifically pointed out that there is NO DUTY, no necessity to pay towards another person's liabilities.