What happens when I breach my IVA?

leedslad2013

I'm 2 and a half years into my IVA with no problems.

I recently took out a Payday Loan for £250 (stupidly I know but I needed some extra cash), and in order to pay it back I spoke to my IP to see if they could let me off with a months payment and I would increase my next 6 payments accordingley to make up the shortfall.

However they informed me that taking out further credit without there consent was a breach of the IVA and they would issue me with a formal breach notice shortly.

My question is this: does this breach automatically mean that my IVA has failed? Or, as I have read in some posts, will they give me 1 month to rectify?

If push came to shove I'm sure I could get the IVA payment from somewhere, but I'm worried that the breach means my IVA has failed.

If anyone could clarify this for me it would be much appreciated.

manzanilla

You need to read the T&Cs of your IVA - it is an 'individual' arrangement, there could be anything written in there and it's not necessarily helpful for you to know what other people's say...

Why didn't you ask the IP what it meant and what your options are? If you cant find the IVA terms or are unsure what they mean, then phone the IP up straight away. Don't be an ostrich, this is too important.

leedslad2013

manzanilla wrote: »

You need to read the T&Cs of your IVA - it is an 'individual' arrangement, there could be anything written in there and it's not necessarily helpful for you to know what other people's say...

Why didn't you ask the IP what it meant and what your options are? If you cant find the IVA terms or are unsure what they mean, then phone the IP up straight away. Don't be an ostrich, this is too important.

I will be checking the agreement tonight (it's currently in a file, in a box, under boxes of junk in a cupboard under the stairs) but I was just hoping someone might have a quick answer.

The IP was extremely rude and unhelpful so I didn't want to waste any more of my time trying to talk to her.

Hopefully I can just make up the payment; the creditors will ultimately be no worse off and surely it's better for them that my IVA doesn't fail?

UpToMyNeckInIt

leedslad2013 wrote: »

I will be checking the agreement tonight (it's currently in a file, in a box, under boxes of junk in a cupboard under the stairs) but I was just hoping someone might have a quick answer.

The IP was extremely rude and unhelpful so I didn't want to waste any more of my time trying to talk to her.

Hopefully I can just make up the payment; the creditors will ultimately be no worse off and surely it's better for them that my IVA doesn't fail?

Hi leedslad,

Are you sure you were talking to your IP, and not a 'case officer'. If your IVA case officer is a useless as mine - you have my sympathy.

Yes, silly taking out a PDL, but many IVA's allow you to obtain £500 credit. Check the Ts & Cs of your IVA. (Saying that, you should only do so if you can pay it back).

You are better off addressing a very apologetic letter direct to your IP. If this is your first moment of weakness, then you may be able to save the plan. Which company are you with?

Assuming you can save the IVA, you might want to look at thoroughly reviewing your income/expenditure. Are you claiming all your allowances for things like: sports/hobbies, hairdressing, sky TV etc.? It's worth doing. that way if you have a tough Month, you can use these 'luxury allowances' on essentials.

I notice that the powers that be have removed the link to download the latest 2012 Stepchange budget guidelines. I am happy to email them to you though - (you will need to send me a PM with your details).

Good luck.

techno1029

I am no expert but your IVA should not fail unless you miss at least 3 months consecutive payments. If you have missed a month it will just be added to the end of your term. Most iva terms allow further credit of upto £500 as long as it for utilities/ essentials etc. ' I am sure this was the case'!!!!!! cough cough. I would just continue making my monthly payments and plead ignorance about notifying them of your PDL. Get your T&Cs out and ensure you read them thoroughly as well.

cheesedoffwithdebt

I just googled your question and found a very helpful article,

http://www.harringtonbrooks.co.uk/support/iva/default


From the IP's point of view, they are acting for the creditors, and so their responsibility is to make sure you are keeping to the terms of the arrangement, if you understand that it might go some way to understanding their reaction as well.

So- you have 30 days to remedy the breach, I agree with the advice to start being extremely grovelling- write a letter, confess it was a mistake, ask how you can put it right and never do it again!

However there are practical issues here-PDL's have heinous interest rates so you need to pay this back very fast. Is there a family member who will lend you the money to do this perhaps? I think the IP is saying they won't let you miss a payment because of the circumstances.

Citizens advice may be able to give help on the practical side of remedying this.

sourcrates

I missed 6 months of IVA payments, due to circumstance changes, my IP was brilliant, they just contacted creditors to amend the terms and conditions allowing up to a years worth of payments to be missed before any breach was called, they have a very wide degree of discression and are supposed to be working with you not against you, if the IVA fails, they wont receive as much money so its in there interests for it not to fail, an apologetic letter should smooth the situation they can simply add one month onto the end of an arrangement, ie, 61 months instead of 60, I think your IP is been very OTT !!

UpToMyNeckInIt

sourcrates,

Really useful post, with all the doom and gloom scare-mongering that some on this forum seem intent on pushing, it is nice to come across a positive outcome, such as yours.

Serves as a great example to those of us in IVAs: If you get into trouble, do your utmost to work with your IP. It is not in their interest to fail your IVA.

Saying that, clearly the extent of customer service seems to vary massively from company to company. Many of us I suspect, will have to get past a 'case-worker', 'Relationship Manager' or some other such person, before the IP gets a look-in!!!

sourcrates

UpToMyNeckInIt wrote: »

sourcrates,

Really useful post, with all the doom and gloom scare-mongering that some on this forum seem intent on pushing, it is nice to come across a positive outcome, such as yours.

Serves as a great example to those of us in IVAs: If you get into trouble, do your utmost to work with your IP. It is not in their interest to fail your IVA.

Saying that, clearly the extent of customer service seems to vary massively from company to company. Many of us I suspect, will have to get past a 'case-worker', 'Relationship Manager' or some other such person, before the IP gets a look-in!!!

Thanks UpToMyNeckInIt,

There appears to be a lot of myths about IVA`s ,I can only comment on my particular case, I think it depends a lot on which company you choose to administer your IVA, I went with debt free direct, I only heard from them once a year for my annual review, and that was that, if I had a problem, a quick phone call was all it took, or on occasion a letter, I had changes of circumstance a few times over the five years, each time it was dealt with in a friendly professional manor, no silly threats or anything, in the end my marriage ended and I could no longer afford the IVA at all, my creditors accepted all payments to date as full and final settlement, my original debt was 34k, I payed in 16.5k over 5 years, just over half what I owed, although the IP`s fees were about 6k, so in effect only payed back 10k.