Unable to pay IVA ADVICE PLEASE!!

Martster2009

Hi Guys

I was hoping for some advice regarding an IVA my girlfriend has.

Here's a bit of background. She has been paying it for 3.5 years now without any problems (it was for £18K and £260 per month for 5 years)

Until recently she could afford the repayments comfortably, however a few month or so ago her business took a downturn, so much so that she had to move out of her flat and move in with me.
Her income has now reduced to £180 per month, obviously not nearly enough to pay the IVA.

My question is, can she apply for a reduced amount?? (I've suggested £30-£50 per month) Or would she be better applying for a DRO???
The balance is now £4700. She has no other debts and no assets. She has no means to make a F&F offer.
The IVA is to two creditors HSBC and Virgin(One account).

She has spoken to he debt manager who says the offer may not be accepted as it's too low. I guess they would say that if their fees are affected!! They suggest an offer of £150 (leaving her £30 to live off!!!) My argument is, if she can't afford to pay, something is better than nothing.

Also, what can happen if she defaults??

My feeling is if it's not accepted, she go for a DRO, her credit rating is shot anyway.

Any advice/opinion would be most grateful.

Many thanks!! :-)

Anondebtadvisor

If your girlfriend has had a change of circumstances, your IVA company could call a variation meeting to see if the creditors will accept the contrinutions made to date and conclude the IVA, that would seem to be the sensible solution, have you discussed this with them?

Martster2009

Hi

Thanks, not as such, she offered to pay £30 per month but was told it was too little. (The debt manager didn't put it to the banks, just decided it was too little) I'm in the process of researching a DRO for her but think we will take your advice first and see what the 2 creditors say and mention she's going down the DRO route if they refuse.

Vikipollard

I dont think it quite works as simply as that.

Although the £260 x 60 would have totalled £15600, and she's paid £10920, the £15600 was based on frozen interest and the payments being completed. If the IVA fails, I'm not sure that the debt actually becomes £4680 or if it could go back up to the full £18000.

(Mine started out at £208/month for a projected 72 months guaranteeing a total of £14976, but in reality because of pay rises I paid back almost £20,000. It didnt stop because I'd hit the guaranteed figure.)

Your gf strongly needs to talk to her IP (or one of the free debt services) about it and what her options are.

Martster2009

Thanks, but surely they can't put it back up to the full £18K when she's paid back nearly £11K???

Anondebtadvisor

The IVA company can hold a variation meeting with creditors and ask them to accept the funds she has paid to date to complete the IVA.

Have you asked them to hold a variation and accept the funds paid to date? This is the best thing to do as she has had a change of circumstances which means she can no longer make further payments

Vikipollard

Martster2009 wrote: »

Thanks, but surely they can't put it back up to the full £18K when she's paid back nearly £11K???

I guess it depends how much interest she would have paid had the IVA not been in place. I honestly don't know, but you may find it's not as straight forward as you think.

Anondebtadvisor makes good sense and it'd be best if you gave that a go for sure!