Worried about IVA future - please help!

headstuckinsand

Hi,

I'm concerned that I may find myself up the creek further along my IVA and don't know what to do about it.

I've recently had a letter from the Student Loan company saying I need to start paying them just short of £80 per month. Up until now I've deferred it each year as my wage has been less than the threshold. Payplan were aware that I was deferring my student loan payments when the proposal was put together as they included them as a preferred creditor, however they didnt include an amount on the I&E.

I've now been told by payplan that they can only reduce my iva payment by a maximum of 15% (about £57) over the life of the iva.

My worry is that even if I can handle this now it leaves me with no room for any future fluctuations. What happens when the interest rates start going up? (I'm on a standard variable rate mortgage at the moment) I can't imagine they'll stay the same for the next 5 years!

Does anyone have any advice?

headstuckinsand

Does no-one have an opinion? That does suprise me.

Would I be better trying to get a new fixed rate mortgage and then put in another proposal?

moneysavingplumber

Depends on your current SVR and equity in your property that would dictate what terms you could get on a new mortgage. Do you have any conditions in your IVA regarding equity release? I'm assuming the figure that your IP has quoted as the maximum reduction also includes the maximum available to adjust during annual review due to increased living expenses. Until you find out what fixed rate would be available to you at this time, it's a difficult decision to make.

Charco_2

Your IP has the freedom (not a great word for it) to reduce your monthly contributions by up to 15% if the circumstances require it, this much is true!

However, that is without calling a new creditors meeting!

If your circumstances change during your IVA and you are unable to maintain your agreed monthly contributions then you can have a new I&E drawn up that better reflects your changed circumstances and have a new creditors meeting held to agree or reject your changed terms... although your IVA is supposed to be a formal legal agreement, it's still negotiable. It would be mad to assume that nothing will change for five year's in someone's life! (If your circumstances change for the better, your creditors and Payplan will certainly expect you to improve your terms wont they!?)

So if your mortgage payments go up, you'll have to reduce your monthly contributions and don't let Payplan fobb you off with some 15% rule... that's not quite honest of them!

I would also point out that it was a bit remiss or negligent of them to draw up a proposal that did not make allowance for Student Loan repayments!

headstuckinsand

Thanks, that makes me feel a little more comfortable. I'll speak to payplan again and see if they can do another I&E in light of the fact that it's most likely their mistake.

balmk

I agree - I went through an IVA from 2002-2007 and also had a student loan which my IP included in the IVA even though I had been deferring payments since leaving Uni.

Hope you manage to get it sorted.