General question about IVAs and bankruptcy

melanieconway

Hello

This doesn't affect me but I was after some info.

What exactly happens when you have an IVA? Does someone sit down and go through your outgoings and tell you what to cut down on, and then how much you should be paying back to your creditors?

And if they do work out how much you should be paying back is that amount put 'in writing'? I assume it is.

Finally, if the person with an IVA has extra money at any time are the creditors within their rights to ask for more money and can they take it?

Reason I ask is that my ex has IVAs (this doesn't seem to affect me or the child support payments he makes), which to me means he's basically registered as bankrupt. However, he has told me he is going away on a long weekend in a few weeks time. I don't begrudge him this but in my common sense view, I'm confused as to how he can afford this if his debt situation is that bad he's had to get IVAs. And surely his first priority should be to get himself out of this mess and get his creditors off his back no matter how much he may want the break. If I can't afford something I just go without...or am I being too simplistic?

Apologies if I misrepresented anything or sounding a bit harsh. I'm not familiar with what they involve, the process or implications.

FoggyBrain_2

Hi. Basically, when you go into an IVA the IP (Insolvency practitioner) works out your total income. Then your expenditure. You are allowed certain amounts for certain things, as agreed by the creditors. What is left over (disposable income) is paid into the IVA. This is all agreed in a legally binding document (The Proposal). When the person has overtime or bonus payments, half of this also goes to the creditors ( you get to keep the other half). Likewise if you have any payrises over the five or six years, half of these also go to the creditors.

You are allowed something like £25 per month for "entertainment", if you save this up over a few months you can have a long weekend somewhere. However 9 times out of 10 it gets diverted to things like repairing the car !!!!

In an IVA you are supposed to live comfortably, not at all lavishly, and it is generally akin to walking a financial tightrope. As a single person he would also be allowed somewhere in the region of £40 - £50 housekeeping. If he decides to live on beans on toast for a week, he can also save what he doesn't spend from his allowance to go toward other things.

Very simplistic and short, but I hope it helps.

melanieconway

Thanks. That's really useful.

I know I'm going to sound like a beeatch here but his wife hates (seriously, i cant contact my childs dad unless through her, and if i leave messages for my ex to contact me about our son she deletes them ftom her mobile swears blind she had no calls from me) me and whenever I want to rearrange child arrangements because I've been invited somewhere she seems to come up with the story that they are away somewhere.

I save up for my trips and generally don't do what I can't afford. Therefore if they have ivas I can't see, when they have an additional 2 kids to pay for, how they can afford it. So I'm thinking she's either spinning a line just to make things awkward for me. Or that they're hiding something from their creditors.

Either way, if they are being truthful and they have extra money surely it would be better to pay the debts off quicker and repair their credit record? Sorry for sounding hard but you have no idea how devious this woman is. She once td my ex to choose between her and our son!!!

FoggyBrain_2

Hi again. Once in the IVA the only way of paying the debts off quicker is to somehow come up with a full and final offer (usually at least to make up the amount paid to 60 times whatever the monthly payment is). If you find yourself with allowances left over at the end of the month and decide to pay them into your IVA they will only mean the creditors get more, not that the IVA will end sooner.

Their incomes and expenditure should be reviewed each year by their IP, so, if they are hiding extra income it will be discovered at the review ( unless, of course, they are working cash in hand, or something like that). IVA's are highly regulated.

You can make sure they ARE in an IVA by checking the Insolvency register.

melanieconway

Thanks Foggy. I have just checked the IVA register and they are nowhere to be found, rather interestingly. Not sure if my ex was just telling me that for the odd occasions his payments were late so I would have sympathy.

I'll be mad if he has though as there are people genuinely in that situation who can't find a way out and he's just pretending to stop himself getting an ear bashing.

FoggyBrain_2

Whoops! One other possibility is that he is in a DMP (Debt Management Program). This is a less formal arrangement where the Insolvency Firm ( it doesn't have to be an IP and you can do it yourself if brave enough) agrees lower repayments with creditors and, hopefully , they will agree to stop interest and charges running. However, as I say, this is a very informal agreement which can break down at any time, but could also drag on for decades.

fatbelly

melanieconway wrote: »

Thanks Foggy. I have just checked the IVA register and they are nowhere to be found, rather interestingly. Not sure if my ex was just telling me that for the odd occasions his payments were late so I would have sympathy.

I'll be mad if he has though as there are people genuinely in that situation who can't find a way out and he's just pretending to stop himself getting an ear bashing.

Is this what you checked?

http://www.insolvencydirect.bis.gov.uk/eiir/

If he's in an IVA, he should be on there