Advice Needed

champers02

Hi ... need some advice as Im not sure what to do now .. I have been in an IVA for nearly a year ( its signed up for 6 years) after reading some of the reviews of the company I am with ( and my personal dislike) I am wanting to switch company

They charged me over £500 upfront by way of 2 payments before they even went to the meeting ... now I am paying £300 a month of which they cream off a large portion

my husband and I used to get tax credits of £541 a month ( big nursery fees !!) these were reduced overnight to average of £41 a month ( I had a small pay rise but enough to tip the scales) ... this means I have lost £500 a month on my income and yet they dont seem to be interested in changing my payments ( even though we are struggling to keep going) ... I would just like to be with a company that is a little more personable and flexible when your circumstances change, as I know they would be on me like a shot if I came into some money

Would appreciate your thoughts on whether I can switch out now ?

Thanks

Charco_2

Switching isn't really an option. Would require court I'd imagine and I don't thinkn this has ever really been tested.

Not much help to you, but as a warning to other people looking for an IVA it's worth noting that companies who charge upfront fees are obviously interested in your money! Of course all companies need to earn money to pay staff and costs... some good companies even make a profit... but there is a right way and a wrong way - the wrong way obviously being to take MORE money from people who come to you struggling with debt!

Back to the Original Poster, you have the right to insist that your IVA is altered to better reflect your situation. Even consider whether an IVA is affordable at all... if you have £300 surplus but then lose £500, it sounds like you've negative £200!

Would you consider Bankruptcy?

I would certainly with-hold payments until you are sure what you can and cannot do or afford for the future... if an IVA is no longer affordable, then there is no point wasting £300 a month for the next three months before you eventually face the truth and have to fail it anyway!

Other things to consider however before doing anything rash:
1. Would you be able to raise a lump sum offer towards your IVA (through a friend or family member?)
2. Have you Equity in your property?
3. Could you find cheaper child care (family member) that would make your situation more tenable?

debtinfo

why did you lose the £500pm, did the child care costs fall

FoggyBrain_2

We got caught by this .... as far as I can work out ( and HMRC isn't at all helpful ) everything is based on thresholds. You can be awarded x credits (call this the full award) up to, for instance £100 per week earnings, then those earning more than £100 get an award of, say 75% of the full award.

So, earning £99.95 pence will get you the full award. A pay rise of just 10pence will lose you 25%. So for your pay rise you make a net loss.

They got us when we were "given" 15 hours free child care , courtesy of the local authority. This dropped our care costs below a threshold and, after the free care we were £200 per month worse off as they slashed the tax credits! .... from the other side, but the same principle.

Charco_2

So are you paying back an over payment at all?
An overpayment should be entered into your IVA as a debt!