failing IVA

dogsrock_2

I have been in an IVA with DFD since December 2010. All was going ok-ish until my eldest finished college and started Uni. At that time my income dropped as I stopped receiving child support and child benefit for him. I asked DFD to lower my contributions to reflect the change but they said that my creditors would only allow a small reduction and insisted on extending for 12 more months to cover the short fall.
My argument is that Student Finance class my son as financially dependent on me, his maintenance loan/grant is means tested on my income and I am expected to contribute. DFD say I am not allowed to include him in my food and clothing budget as he should 'get a job'.
Since July 2012 the only way I have managed to feed my kids and pay the IVA is by working 6 days a week. On my only day off I have to do my elderly mum's housework/shopping. My job is quite physically demanding and I have been suffering increasing pain and have just been diagnosed with arthritis in my neck and RSI in my shoulders. I am also being treated for anxiety/depression.
I hadn't had an I+E review by DFD since July 2012, so as I have had to reduce my hours at work I did my own review and sent it addressed to my IP care of DFD. After not hearing anything for over a month I eventually phoned and spoke to someone who sounded about 12 who re-iterated that my son should get a job, I can't feed/clothe him as he is over 18 and said other people manage so why can't I. She also wouldn't allow me to budget for property repairs or prescriptions!
I have decided to stop paying and allow the IVA to fail and then manage my debts myself but I wondered if I do this will I stay on the insolvency register forever? My other concern is that as part of the IVA there is a charging order on my house. Once my debts are repaid how do I go about getting this removed.

Anyone with teenage children considering an IVA may find themselves in a similar position in a few years time if they decide to progress to University while the IVA is still in place.

Apologies for the long post. All advice gratefully received.

22cuddles

I'm sure someone with more expertise will come along with more advice however there should be some allowance for prescription medication. If you're on regular medication it might be worth considering a prepayment certificate. You can buy a three monthly one or a 12 month one, the latter can be paid for by monthly direct debit. I appreciate it doesn't help the IVA problem but might help a little with budgeting.

dogsrock_2

Thanks for the reply.
I had thought about a prepayment certificate but haven't got round to it yet. I suppose a lot depends on how long I'm going to be on medication for. It's early days yet but to be honest I'm not convinced the meds are making much difference.

I am very frustrated with DFD and really have lost all faith in them. When I signed up for the IVA in 2010 I was in a blind panic about my debts, I owed over £55k on a salary of £30k, single mum to 2 kids, 2 Labradors and a cat to feed, old car and a house that's over 100 years old and in serious need of repair.

It was sold to me as 5 years of affordable payments and then the rest written off but the budget they set was unsustainable from the start. I've worked like a dog, cut my own hair, no social life and barely scraping by for food and petrol to get to work. Because its so tight there's nothing to save for an emergency fund so every time there's a vet bill or roof leaking etc I have to miss payments and add them on at the end. So basically I am now looking at 8 years of unaffordable payments.

Now that I'm a lot more clued up about debts I am appalled at the cynical way they just screw every last penny out of me. I used the Stepchange budget guidelines when I did my review, (not setting everything at the max but so that I could keep within what creditors might agree to) but DFD say that's only for DMPs and it doesn't apply to IVAs. I said well food and clothes cost the same whichever debt solution you're on!

In the past I let them bully me into agreeing their budget, it was presented to me as if I had no choice but I simply can't do it any more. I am not well enough physically or mentally to carry on as I have been doing.

Sorry if it sounds like I'm feeling a bit sorry for myself. I know the whole mess is my own fault and I'm not trying to shirk my responsibilities but I have paid almost 20K into this IVA and whenever my creditors send me statements its clear that most of that has been eaten up by fees and the debts have hardly been touched. It is ever so slightly soul destroying. I wish I had known about DMPs back in 2010!

Anaheim

Hi Dogsrock
Our eldest was at uni when we first started our IVA in 2010, she managed uni with a part time weekend job at a supermarket, it was a struggle but she managed. We tried to get some sort of allowance for her but it wasn't allowed, but we managed because we had to, but they did take the loss of child benefit into account. When your income dropped I assume the reduction in payments would have been around 15%, that can happen at the IP's discretion and the creditors do not even have to be informed.
You worry me when you say that you are going to let the IVA fail, you will probably lose everything that you have paid so far and the last 4 years will have been for nothing, the creditors are then likely to add the interest back onto the debt. An IVA is set up to be affordable it shouldn't be set up to fail. I would be badgering them to do a proper I&E (our I&E does follow the Step Change Guidelines) and ask to speak to your IP, when we have had problems in the past we managed to email our IP directly, you are likely to get a better response than phoning the 'call center'.
You don't come across as feeling sorry for yourself, you come across as being extremely frustrated, and understandably so. Have you googled The IVA Forum? There are a few knowledgeable people on there and sometimes a rep from DFD is around, you are likely to get some sound advice from the people on the forum. I hope that things do get a little easier for you, Sorry that I cant help you but good luck with what ever route you choose to take

dogsrock_2

Thank you for your supportive reply. Don't get me wrong it's not that I object to him getting a job, he is trying to find something to fit around his studies but as yet has not been successful.

I have written to my IP, sent recorded delivery but got no reply. If I phone, the call centre staff won't let me speak to him, they say they are working on his behalf. They won't let me request a call back or anything and I just can't get them to meet me half way on what is a reasonable budget.

I know on paper letting it fail is a bad idea, but I think I need to feel more in control, even if it takes another 20 years to pay off. Up to now I have just tried to power through but I just can't carry on like this anymore. Something has to change now. I have to look after me and mine first and the creditors can have what's left instead of the other way round.

longtermplanner

dogsrock wrote: »

Anyone with teenage children considering an IVA may find themselves in a similar position in a few years time if they decide to progress to University while the IVA is still in place.

Indeed. This is why anyone looking into an IVA should create a mental 'road map' of what is going to happen in the next 5 years. Retirement, balloon payment at end of car HP contract, childcare costs falling as kids enter full time school etc. And loss of child benefit / child tax credit as a child goes to uni is one of these events.

Unfortunately you didn't raise the subject with your IP and your IP (who should have known the sort of problem this causes) choose not to discuss it with you.

Can you say how much you are currently paying each month? And whether there is any equity in your house?

dogsrock_2

Hi longterm planner. I bought the house with a 5% deposit in 2007 just before property prices plummeted and was originally paying interest only. I changed to repayment at DFDs insistence in 2010 just prior to the IVA beginning. I doubt there is much equity.

I have paid a bit under 20k into the IVA so far. My basic payment has been £454 per month plus more depending on how much overtime I have worked, at the last review in 2012 DFD estimated a return of 41p in the £.

Last month I only paid £250 which is what the Stepchange budget suggested based on my reduced hours at work but DFD won't let me use those guidelines. I hadn't even included everything, like newspapers, entertainment, hobbies and presents and didn't put the maximums for everything. I just used it to make sure I didn't exceed any of the suggested allowances.
Strangely I can't find my IP on the IP register and when I search IVA companies he isn't listed as one of DFDs IPs but all their letters say on behalf of him as my IP.

longtermplanner

hi dogsrock,

you can insist that your IP proposes a change to your creditors. Obviously it is better if the IO proposes it and says that they recommend that the creditors accept it, but in your position if you are seriously thinking of abandoning your IVA you have nothing to lose by insisting that your request for a reduction to £250 is put forward. Your reduced hours and the fact that your credito4rs will still get a decent returns are good reasons why it might be accepted.

You could also consider putting in a formal written complaint to dfd about the way your case is being handled. I often suggest this to people, because although it might sound like it will never work, in practice regulated firms do not like having to deal with formal complaints. If the complaint is rejected, you can complain to your IP's authorising body and the insolvency service. these may not do you any good, but your IP will not want the hassle of dealing with the complaints...