Additional income advice needed

losethedebtlou

I have 20 months left of my IVA and have just had my annual review. My pay went up but I didnt inform the IVA company stupidly, now they are saying that I owe an additional income of £1800 into my agreement. I have agreed to pay this off at a rate of £15 a month (all i can currently afford) but this still leaves me with £1500 to pay before the IVA finishes:(. What happens if I do not pay this off before the IVA finishes? Will my IVA fail? Will they extend it by a couple of months to pay this off? My monthly payment is currently £521. I can raise the money (hopefully) in the 20 months I have left, but if I cannot raise it I am worried the IVA will fail and all the money I have paid in will be lost. :eek:Can anyone advise?
Thanks

althas

Hi Lou

This would be a specific talk needed with your IP. They will need all the details and I am sure they have the authority to make minor adjustments to plans without calling a new creditors meeting

I can not see why they would not agree to a 2 or 3 month extention for this, you have not (presumably) missed any payments, it was just an oversight on your part. You are not the first and will not be the last to do this, so please don't panic, and talk to your IP

Good Luck

Charco_2

Your IVA wont fail like that.

Just be aware that if your IP has to extend your IVA to accommodate you paying this amout then he will likely want a fee for it. If it takes three months contributions for you to make up the difference (£521 x 3 = £1563) then it is likely that your IP would extend the IVA by 4 or 6 months to cover a fee for his extra time Supervising the case (I dont mean the IP would the take the rest. I'm not suggesting 3 months for your creditors and 3 for your IP - your IP would probably take less than 1 months contributions but might want to round it off the the nearest half year...)

Perhaps you could look at getting a lend for the outstanding £1,500 from a friend or family member who would accept you repaying it over three months of £521, a pint and a hug and high5!

debtinator_2

Charco I'm shocked, borrowing money is what got louwilko04 into trouble in the first place.

louwilko04 how does it go that you only have £15 a month left but the IP says you owe him a load of money, have you been pushed into accepting this new liability?

If you have just had your annual review, surely your expenditure has gone up in the last 12 months? Petrol, Gas, Electric, Council Tax, Food etc.

Did you try negotiating with your IP or did you just get intimidated and accepted what was put in front of you?

Charco_2

I would have thought that Money Mismanagement would have been the cause of all the trouble in the first place... debt and borrowing in itself are not bad things!

Would you suggest that someone who has availed of an IVA or other debt solution would never incur debt again? Should they pre-pay their household bills? Lodge some credit with their electricity supplier? Over pay their phone bills? (I am exaggerating the point of course).

However, given that it is likely that the IP will look to extend the IVA by £3126 (6 x £521) then would it not be better to try to end the IVA on time for the sake of just under half that amount!? It was merely a suggestion (and a fairly ordinary and common suggestion at that!) And one i would think worth looking into.

Certainly I am not suggesting or condoning future profligacy - i would hope that the lessons learnt during five years of an IVA would instil a respect for proper budgeting! (is there any reason why someone couldn't save £6k a year once your IVA ended? bring down the mortgage, have a nice holiday)

However Debtinator, you are correct to question why there is such a large outstanding amount and only £15 a month excess!

If the OP had spoken to their IP sooner it would have been easier to come to an arrangement about how to split the rise in income and perhaps he could have saved some money but he has a bit of a problem now. Could be worth disputing!

losethedebtlou

I rang my IP and she said that if I hadnt paid the additional income by the end then the worse case scenario would be that the IVA would be extended by 3 months or so, she said that most likely I wouldnt have to pay it ! I am however going to try and save the money anyway so if they do ask for it I can produce it without having to extend my IVA as I cant wait to finish it as it is! And I have just had another pay rise of £50 a month and immediately phoned my IP to tell her to avoid this happening again!

Thanks for the advice everyone:rotfl:

althas

Great news Lou, I bet it is a weight off. And congratz on your pay raise