IVA help

kellbells

Hi,
My Mum has 3 years left on her IVA and has now come to the decision that she is going to retire from work within the next few months.

She's been onto her council as she rents from them and we've done the online calculator for her which has come back saying she will qualify for full housing & council tax benefit because of her income dropping to pensions only.

Where does she stand with the IVA?

Also, what is the minimum amount that the government say she and my Dad are to live on per week because Kingsgate seems to be coming up with all sorts of figures and she's a little confused.

Thanks!

longtermplanner

What are her monthly IVA payments? I would imagine she will have problems making these if she retires.

It doesn't really matter what the government says she ought to have to live on, what matters is what she actually needs. How much does she want to complete this IVA? Why didn't she opt originally for bankruptcy?

If she went bankrupt and her only incomes were state pensions / pension credit, housing benefit then the government would not expect her to be able to make any monthly payments to the official Receiver.

kellbells

longtermplanner wrote: »

What are her monthly IVA payments? I would imagine she will have problems making these if she retires.

It doesn't really matter what the government says she ought to have to live on, what matters is what she actually needs. How much does she want to complete this IVA? Why didn't she opt originally for bankruptcy?

If she went bankrupt and her only incomes were state pensions / pension credit, housing benefit then the government would not expect her to be able to make any monthly payments to the official Receiver.

Thank you for your reply.

She currently pays the IVA just under £1000 per month.

She's at the point now where working combined with the IVA is affecting her health so she's made the decision to retire.

She's been to the CAB aswell in the last 10 days and they advised her to seek other avenues - one being retirement.

She did not go down the bankruptcy route because she felt there was a stigma attached to this and also wasn't sure of the implications with her employer and renting from the council.

Kingsgate have told her that's it in her interest to stay with them and see it through (well I guess they would say that wouldn't they?!)

UpToMyNeckInIt

...£1,000pcm? Are you sure? £100pcm sounds more normal for someone on full state benefit.

Either way, your Mum is being a little foolish, letting 'pride' get in the way of common sense (unless she has significant assets to protect, going BR is likely to be far and away the cheapest option).

...Fear of 'stigma' has already cost her £2,400 (or £24,000!!!!). VS a one-off £500-£700ish payment to go BR. (If Mum is on benefits, she will most probably not qualify for a 3-Year IPA.

If her total debt is less than c£14,000, she might be able to do a DRO for £90.

How much more convincing does she need?

All the best.

kellbells

UpToMyNeckInIt wrote: »

...£1,000pcm? Are you sure? £100pcm sounds more normal for someone on full state benefit.

Either way, your Mum is being a little foolish, letting 'pride' get in the way of common sense (unless she has significant assets to protect, going BR is likely to be far and away the cheapest option).

...Fear of 'stigma' has already cost her £2,400 (or £24,000!!!!). VS a one-off £500-£700ish payment to go BR. (If Mum is on benefits, she will most probably not qualify for a 3-Year IPA.

If her total debt is less than c£14,000, she might be able to do a DRO for £90.

How much more convincing does she need?

All the best.

Yes, she is currently earning a wage and paying her IVA almost £1000 per month. Once she retires, she's concerned about how only having pension as her income will affect the IVA. Is it something she can get out of or will she have her payments reduced considerably based on her new income?

Is going bankrupt easy to do? Can anyone advise please.

Thank you for your reply too, everyone seems so very helpful and understanding.

Anondebtadvisor

If your mums income is going to change, the IVA company will carry out a review to see what her disposable income will be and possibly call a variation meeting to see if creditors will accept a reduced payment.

If she cannot pay anything, they can call a variation to ask creditors to accept the payments made to date in full and final settlement of the debts.

If your mum can raise a lump sum, she ask the creditors to accept a lump sum to conclude the IVA.

If none of these are an option she may consider bankruptcy, how much were her debts that went into the IVA?

Foxy-Stoat_3

Is she is paying £1000 a month then your debt must of been well into 6 figures?

sarah222

I didn't owe 6 figures and yet I was paying along those lines :-(
I have completed my IVA now and had certificate but it was hardwork.
Your mum maybe paying a high percentage of the debt back like I did. However if her circumstances change the IVA provider would need to approach the creditors and request a revised repayment figure based on her new income or benefits. If she has already paid tis high amount for 3 years this will stand her in good stead to reduce it but it does depend on a number of issues. We had an adjustment to ours and brought it down and it was fine but we had to extend it from 5 years to 6. Ours was because we originally had equity in our property which was included and we had to remortgage. We couldn't remortgage as property prices went down and no mortgage company would lend to a house with no equity, self employeed on an IVA - lol - so we had to pay for longer to ensure creditors still got their % back. It wasn't ideal but we went for that rather than go BR personal choice. I would advise she speaks to the IVA company and ask for a revised figure to be calculated or a revised figure with term.

kellbells

Foxy-Stoat wrote: »

Is she is paying £1000 a month then your debt must of been well into 6 figures?

No it is definitely not 6 figure amount that she owes. I believe it is around £35k and she has just completed her first year in the IVA.

The company dealing with it - Kingsgate really aren't forthcoming with any questions she's asking about changing the amount she pays - all they do keep saying is she's better off staying with them and carrying on what she is paying.

She cannot continue the way she is as it is affecting her health and home life dramatically.

I'm trying to gain as much of the facts for her before she speaks to Kingsgate so she is 'armed' with the correct information as she sometimes feels like they try to baffle her with all the spiel they keep coming out with.

kellbells

Anondebtadvisor wrote: »

If your mums income is going to change, the IVA company will carry out a review to see what her disposable income will be and possibly call a variation meeting to see if creditors will accept a reduced payment.

If she cannot pay anything, they can call a variation to ask creditors to accept the payments made to date in full and final settlement of the debts.

If your mum can raise a lump sum, she ask the creditors to accept a lump sum to conclude the IVA.

If none of these are an option she may consider bankruptcy, how much were her debts that went into the IVA?

I think about £35k went into the IVA although I'm not certain until I speak with her later.

Anondebtadvisor

What she pays is not a decision for Kingsgate, it is one for her creditors to make.

I am surprised she is in an IVA if she was proposed to pay back £60,000 on £35,000 debts ( some fees for Kingsgate there)!!

If she wants to give up work for health reasons, she should just do it and inform the IP she wants a review and to call a variation based on the new level of disposable income.

Of course they would rather your mum continue at the current level, they are going to make £25,000 fees out of the IVA!!

Circumstances change and your mums health must come first! It is her right to propose a variation based on her new circumstances

I am sorry your mum is really not getting the advice and support she should be from her IP - it must be so frustrating