Loss of second job - cant afford to pay IVA

simpywimpy

My partner is 2yrs into his IVA and currently pays £430pm however, he is about to have a drastic income drop of £600 a month from May and is currently sending in his annual review papers.

What will happen if he now submits a form showing he hasn't enough to pay his bills - that's before any IVA payment is due?

IVA with Debt Free Direct if that makes any difference

simpywimpy

Has anyone else been in this situation at all? Ive checked and he is 2.5yrs into his 5yr plan?

UpToMyNeckInIt

Very difficult to advise given the limited information provided.

What are the chances of him getting another job within the next 6 Months?

He needs to urgently speak to DFD. They may be able to arrange a few payment breaks if this is a short-term issue.

If this loss of income is likely to be permanent, then you will need to review your household income/expenditure, and speak with DFD. They might be in a position to inform the creditors, and accept contributions to date as a 'full and final' settlement (along with any redundancy money your partner may receive), if an IVA at a reduced payment is no longer viable.

Otherwise, the IVA fails, and your partner is back to square one (ie: in debt). If that were to happen, you would presumably have to consider some other form of insolvency eg: bankruptcy or a DRO (are these viable options for you?). Alternatively, consider a Debt Management Plan.

Good luck with whatever you decide.

simpywimpy

He can't go for Bankruptcy because of his current job and due to ill health there is no chance of another second job.

He is paying a mortgage but the house is in negative equity at the minute. I could possible offer a small amount of £500-£1000 in !!!!!! to end the IVA.

He thinks he is at least half way through if not slightly more if that makes a difference. He has contacted debt free direct and is sending off the paperwork they have asked for.

simpywimpy

is there a percentage of outstanding debt that they generally accept as a final settlement?

UpToMyNeckInIt

simpywimpy wrote: »

is there a percentage of outstanding debt that they generally accept as a final settlement?

No.

Dividends as low as 8p in the £ are commonplace though if that is the best offer that can be supported (I have heard of one IVA accepted at 0.5p / £).

However, in considering your F&F offer, your IVA company will need to determine if yours is the best offer in the circumstances.

Depth_Charge

Hi

It sounds a tricky one

There will almost certainly be a clause in the IVA relating to the home either a look at a remortgage (if possible) if equity exists at the time or a 12 month extension on the IVA so technically he would likely not yet be half way through the IVA based on what you have put so far.

Are there any PPI claims or issues?

If there are PPI claims it may help towards a Full & Final (this is were the grabbing of high percentages from the PPI by the claim companies can make a difference and hardly in the interest of the person in the IVA)

On a positive note maybe I recently have had a couple of people in a similar situation who have had full & final IVAs accepted and with DFD but it does depend on circumstances and speaking with them is the only way really, having said that getting a second opinion cannot hurt.

The 0.5p in the pound one relates to an IVA with a very large amount of money involved I believe and not a figure that would be accepted for standard consumer IVAs i would think but it does get mentioned every now and then. maybe it sounds good I dont know (no offence meant to UTMNII:)

If he is a home owner then a DRO is not an option

A bit more info would help

Best Wishes

simpywimpy

what info do you need? I can ask and post again tomorrow

Depth_Charge

simpywimpy wrote: »

what info do you need? I can ask and post again tomorrow

Hi

It is a very tricky situation with the employment issue.

How much was the original debt?

How much has been paid into the IVA?

How much of the above has as been paid in fees?

Are there any PPI claims?

Any chance of putting up his SOA?

In the real world of basic consumer IVAs I would not take too much notice of the 0.5p dividend mentioned as if this was the case I would probably recommend an IVA to every person I see and a fair number of the failing IVAs would be settled without too much trouble I would think which of course is nonsense (I will stand corrected on this if someone can provide the proof)

IVAs are not set up to be charitable to the person in debt but there does seem to be a little more emphasis on full and finals depending on circumstances surrounding failing IVAs (which there are thousands of) and of course the IVA companies are supposed to be acting in the best interests of their clients as well as the creditors not to be mention their fees.

He needs to speak with his IVA provider really and see what they say.

If there are PPI claims then his provider may be a little reluctant to fail the IVA anyway while it is ongoing I would think, but maybe I could be wrong on that one.

Genuine best wishes.

Just my take

simpywimpy

I think the original debt was 25k

has made 26 payments at 430pm

original fees approx 2500

No PPI claims and no equity in the property - in fact if wasnt for the fact he cant go bankrupt, he would have handed the keys back because the area has fallen dramatically as a place you would want to buy to live and is more appealing to investors who are looking at payment 40-50k. He currently owes 56k.

He has a good annual income of 24k but as he lives alone, he's paying all the bills himself. Only other committment on top of IVA is the car which he needs to get to work and hospital appts at £220pm and I believe he has one more year to pay on that.

He has sent his new statement in and is waiting to hear from them but wants to be prepared for when they do so he can make the right offer or agreement with them.