Stuck in an IVA

globetrotter0309

Hi all, I need your advice.

I think I made a wrong decision to go into an IVA. I had to give back my property in order to get the IVA in the first place and was paying £372 a month back. My debts were over £60k. I've always struggled with this amount and have had no life for over 3 years. I was unhappy in my job which I quit in october 2011. I didn't think it would be so hard to find a new job but it was. I didn't find a new job until July. In this time I contacted my IVA company, Debtfree direct and they ended up putting me on a payment break. At that time I believe I was given misinformation by them, the person said they would look to contact the creditors and cancel the IVA as I had paid over 3 years. Relief? No. That never materialised. I received no contact and then a month or so ago I received contact saying I was in breach of IVA agreement.

I sent them a new income and expenditure report when I git a job in July. The "guidelines" disagreed with most of my expenditure figures, especially saying £4.67 is what I'm expected to live on for food a day! The other bone of contention is that during my extended unemployment, my friends helped me out financially in order to stay in london and look for work. I understand my debt to the creditors but my friends have dug deep into their pockets to help me and I have to pay them back in order to ever hold my head up in london.
I want to go bankrupt as I have no assets and I'm tired of having no life and no money. Debtfree direct are of course offering me no advice on the matter but to stay with the IVA.

Please forum and clever legal people, can I get some advice? I have asked for a reduced payment of £100 but Debtfree direct say after I repay my friends they will increase the repayments to £400 which I truly cannot afford. I want to end my life of debt and misery.

Aidanb_2

Hi,

I can understand your frustration and thought of no life you have while in an iva I did it for 6 years and am out of it things still seem to be tight as paying what I was paying to my parents for a deposit on a house, I was half your debt and when I started the iva I switched jobs to a lower paid job was even more skintight but was happier at work if you have paid in for 3 years then why not stick it out I understand about paying friends back but if you can afford to then pay them off and stick with the payments if not look at extending the term to make up the shortfall.

If you stick with the iva it will be off your file after your file is updated and 6 years from the start if you do bankruptcy then it will be 6 years from that point, Which means you will be unable to move on until that happens plus will your job be affected by it? Other people will give you more advice about the bankruptcy but think do you want to waste 3years of payments I wouldn't hope it helps but most of all keep your chin up.

Aidan

MrsGregs

Hi there,

I'm sorry to hear that you feel your IVA is the wrong decision for you, but as you have paid 3 years off already it does seem worth sticking with it. You didn't mention how long your IVA was for, but the standard is 5 years. I took out an IVA about 4 and a half years ago. I had to reduce my hours at work and therefore ended up requesting to reduce my payments, which my IVA company agreed to under the condition that my IVA was extended from 5 years to 6, but I am still on the reduced payments.

I know its tough to juggle your finances and I understand your strong desire to pay back friends and family, but maybe its worth looking at other ways of making a little extra cash to pay them back. I've just seen a brilliant post on here titled 100 ways to make £80 (or something similar) that could give you some ideas.

My suggestion would be to go with the reduced payment they've offered you. When they next review the IVA just be honest about what you can realistically afford/have to pay out. They can't take any more money from you than you have so they can only take the suggested increased payment from you if you have that amount available.

Bankruptcy can be tempting, but it does mean starting from scratch with a whole new arrangement, and there's the added complication of things like getting an account to pay wages into and so on.

At the end of the day, if your IVA fails the other option is bankruptcy. Your creditors may well declare you bankrupt if the IVA fails, which I understand is free for you, as opposed to declaring yourself bankrupt which involves you paying a fee.

Good luck and I really hope it all works out for you.
Tanyia.

debtinfo

does it change your mind that in a bankruptcy you will have an IPA which is worked out in a similar way to your IVA payments and they wont let you prefer payments to friends

milliemonster

globetrotter0309 wrote: »

Hi all, I need your advice.

I think I made a wrong decision to go into an IVA. I had to give back my property in order to get the IVA in the first place and was paying £372 a month back. My debts were over £60k. I've always struggled with this amount and have had no life for over 3 years. I was unhappy in my job which I quit in october 2011. I didn't think it would be so hard to find a new job but it was. I didn't find a new job until July. In this time I contacted my IVA company, Debtfree direct and they ended up putting me on a payment break. At that time I believe I was given misinformation by them, the person said they would look to contact the creditors and cancel the IVA as I had paid over 3 years. Relief? No. That never materialised. I received no contact and then a month or so ago I received contact saying I was in breach of IVA agreement. This sounds like they were going to look at a variation to ask the creditors to accept payments made to date to end the IVA at that point, however that has obviously not materialised but you really should have chased them up on this, an IVA is a two way relationship between you and your IP. An IVA can't be cancelled as such, only failed if you miss 3 payments. It was also perhaps not the best idea to quit a job when you didn't have another to go to, especially when you are in an IVA.

I sent them a new income and expenditure report when I git a job in July. The "guidelines" disagreed with most of my expenditure figures, especially saying £4.67 is what I'm expected to live on for food a day! The other bone of contention is that during my extended unemployment, my friends helped me out financially in order to stay in london and look for work. I understand my debt to the creditors but my friends have dug deep into their pockets to help me and I have to pay them back in order to ever hold my head up in london. £4.67 a day sounds reasonable to be honest for a food budget, we are a family of 4 and have an allowance of £488 a month which is less than that per person and we manage fine on this and even manage to save from this
I want to go bankrupt as I have no assets and I'm tired of having no life and no money. Debtfree direct are of course offering me no advice on the matter but to stay with the IVA If you go bankrupt now as you have over £20 disposable income a month you will have to pay over ALL of your disposable income after your essential expenditure into an IPA for 3 years anyway, your IVA is only going to last another 2 years so you are not going to be any better off going bankrupt now 3 years in.

Please forum and clever legal people, can I get some advice? I have asked for a reduced payment of £100 but Debtfree direct say after I repay my friends they will increase the repayments to £400 which I truly cannot afford. I want to end my life of debt and misery.

If you are struggling with your budget ask for a full review of your I&E, being in an IVA is not easy but you shouldn't be struggling either, I get the impression you're finding it hard to stick to a budget especially if it seems all your friends are going out and having a great time, unfortunately though in an IVA you have to pay across all your disposable income for the term, you will have to do this if you go bankrupt, you only have another 2 years to go and then you will be debtfree, you have come along way already so don't give up now.