Help - IVA default / forcing bankrupcy

Silentnoise3

Hi can anyone offer any advice regarding this situation.

After our recent IVA review, the creditor decided we could afford to pay almost double the monthly amount, when this is infact not possible.

After several conversations with themselves they wouldn't budge on this and Citizens Advice confirmed it appeared they had taken in to account a one off bonus from work which they shouldn't of.

I had to cancel the standing order as they were going to take this extra amount regardless which would of meant not being able to pay rent or even live, and have now just received a letter saying not to make further payments are they are going to force bankrupcy.

Can they do this? I've paid religiously for over 3 years and paid in excess £11k and I was willing to keep on paying or pay a little more but double is just not viable on a monthly basis.

I feel by trying to pay my debt off and struggle to make the current payments for the past 3 years has been a waste of time and i'm essentially now been penalised for that!.

Any advice would be much appreciated

althas

You would need to provide more details of this bonus. If it falls under the "Windfall" category they they could be eligable for upto 100% of it. When you received it, what did your IP say?

What does your IP say about this situation? They will have had dialogue with your creditor so they could tell you more

I understand that an IVA can miss three payments in its life, then it is classed as a failed one, but I am not 100% certain on this

If indeed you paid by STANDING ORDER (as you said) and not a DIRECT DEBIT, then YOU control the amount of the payment not the beificiary. They have absolutly no control over the payment schedule of a standing order, only you do

Sorry it may all sound a little negative, but without knowing the circumstances of the bonus, no one will be able to offer any advice. But as a matter of urgency, talk to you IP NOW

dancingfairy

I agree - if it's a standing order then they have no power to change it - it's only a direct debit they can control. I suggest setting up a standing order to them for the amount you were paying so at least you are currently maintaining your payments.
You then need to get in touch with your Insolvency Practioner - the person supervising the IVA and get them to knock some sense into your creditor. If this fails then you need to look into making a complaint into your IVA supervisor if it is then at fault or writing a very stiff complaint to the creditor concerned. If writing to the creditor fails then I believe you can take your case to the Ombudsman but I'm sure someone will advise further when you have spoken to your IP. Also IP's have a code of conduct and can be reported if neccessary but it doesn't sound like your IP is the problem here.
I believe creditors can accept or reject your proposal but I would have throught they had certain rules they had to follow so making you pay double what you can afford is pointless - it is almost certainly an administrative error/computer decision somewhere along the lines - the trouble is getting through to someone with the power to get things sorted which is why your first port of call should be your IP. I can understand if they think you are hiding income but a bonus should be dealt with in a certain way - there are rules on this and your IP should be able to advise further.
df

Foxy-Stoat_3

You need to read your iva contract, there should be a clause that handles bonus's and windfalls as previously said.

I would keep paying the specified amounts until its resolved

Silentnoise3

Hi All,

Thank you for your comments and help, just to clarify I have confirmed some further details as in-fact the query was written on behalf of my mother who isn't very tech savvy.

It was in fact the IP that started these proceedings not a creditor, the IP decided that the amount should be doubled after the yearly review and I'm still unsure if the bonus can be classed a windfall? - as it was a performance related bonus so essentially is discrentionary by the employer in terms of if/when it's given and how much.

It was also the IP that has started the bankrupcy proceedings due to missed payments but again as stated before she does want to pay the debt off but double the monthly amount just can't be done yet the IP just won't see sense.

Also the payment was setup as a standing order not a DD but was cancelled due to fear of them changing this which according to Althas post they cannot do.

So the best course of action now would be?
- start the payments again as per the previous standing order?
- could this stop bankrupcy proceedings or slow them down for the time being?

FoggyBrain_2

Hi. At the very least the extra money, being a one off income related payment, is payable into the IVA. I would say at 50%, as a one off payment. If it were to be classed as a windfall it would be all of it. It should not be added to your income in any other way.

Might I ask who your IP is ? And, importantly, has your mother been speaking to the IP him or herself, or an office administrator? I would speak to them and demand to speak directly to the IP. If they will not see sense ask them to provide to you, in writing, their complaints procedure and who their regulatory body is, so that you can take the matter up with them if need be.

Restaring payments might be a good idea, providing you have missed no more than three in total during the term so far (three strikes and you are, technically, out.). Missed payments will have to be made up, either by adjusting the monthly amount or extending the IVA.

debtinfo

The first thing you need to do is to check the original IVA agreement and see what it says about the bonus, when was the bonus received, and what happened to it

althas

Talk to the IP is the best thing you can do

Also read the agreement. There may be something in there that agrees this increase in payments, as the previous year has been at a reduced rate for some reason

I would have to agree with the others, a bonus from work in my oppinion would be classed as a windfall/same as overtime and some (if not all) would need to go into the IVA. That is dependant on each IVA agreement. Mine for example, for overtime at least, is if it is under 10% on my regular monthly salary, I keep it all. Over that 10%, I have to pay half to my IVA and the other half I can keep

At the risk of repeting myself, talk to the IP (not a call center person, the actual IP) and talk to them NOW, see what can be done