DLA in an IVA

lilypie

Hi, I am almost ready to make the decision and go for an IVA, just firming up through research who to go with.


Am worried though about my son's Disability Living Allowance. It looks quite a healthy amount going into my account each month but we use it purely to benefit him. Can this be counted as our income? The debt is all in my name so the IVA will only be in my name. Should I redirect the DLA into my husband's bank account, even though I'm the one who pays out for what he needs (specialist diet, swimming etc)?


Also, does anybody have any experience of being married but only one partner entering the IVA? I give him a lump sump of money every month into his account towards all our household expenses as all the bills and the bills bank account itself are in his name. As this is the case, will the IVA company accept on my income/outcome list my contribution towards all our household bills? On paper it will look like I am transferring money to my husband each month with no proof of where that money is going, unless they looked at his bank account, which surely they wouldn't be entitled to do? We're not trying to hide anything, we just about get by as it is on my current DMP and there is no spare cash floating around anywhere!! It's just the thought of having to change names of bills, bank accounts etc fills me with dread as I work practically full time, have my son with his illness to worry about as well as my other two children. I am happy to try and pay back as much as we can, it is my mess after all, just trying to get though this stressful time with the least hassle possible.


As always, any advice gratefully received, thank you.

longtermplanner

You need to talk to a possible IVA company about your situation.

your husband The IVA company will want to know how much he earns and will expect you to divide the household bills so that you and he pay appropriate amounts of these. It won't matter if you pay your share by a monthly transfer to his account, but they will want to know what the bills are and how your share is being calculated.

the DLA You need to tell the IAV company about this income and explain what it is being used for. If they say that you have to pay some of this into your IVA, then you should walk away and talk to someone else. We have people coming back here who are getting disability benefits who have agreed to too high an IVA payment. It may seem as though you have a lot of money, but it is needed! Switching it into your husband's account won't help and might look as though you are trying to conceal it, it's better to be up-front about what you get for you son and what it is spent on.

I repeat my suggestion on your previous thread that it might be better to stay on a DMP and then make F&F offers.

Who are you considering for an IVA firm?

ilikewatch

Hi,

The first thing to remember is that every IVA is different and you'll get the best advice by speaking to a prospective IVA firm about your concerns...

I wouldn't imagine that your sons DLA would count as income for you for the purposes of the IVA, however, would it not be easier to have it paid straight into your sons bank account? - I know that my 7yo niece has all her benefits paid into her own bank account so that they stay "ring fenced" from other family income.

Regarding you entering the IVA, but your husband not, although the IVA will be individual to you and your debts the IVA firm will be keen to ensure that you are paying a fair amount. i.e. If your husband earns 20K PA and you earn 10K PA the IVA firm will expect that your husband is paying twice as much towards utilities etc. thus freeing up more of your income to pay into the IVA. I assume that they will therefore request evidence of your husbands earnings?

I'm not quite sure what would happen to any joint debts etc. But before you even start the IVA process I would ensure that you have no financial links to your husband, because if you have any joint financial products your IVA will utterly trash his credit rating.

DorisTrousers

Looking at the previous post, is all the £20k propective windfall yours? If you have to split that with hubby, or whoever else, then your half will not be anywhere near enough, in my experience anyway, to fund full and finals via a DMP route.

If not, and it is all yours, then asking the question re the full and final through the DMP won't hurt, and if not then you can fall back on the single premium IVA if you wish.

National_Debtline

Hello there,

We generally wouldn't use DLA towards someone's income - especially if the DLA was actually a child's. Any respectable Insolvency Practitioner should do the same.

I really hope this helps!

Best wishes,

David @ National Debtline.

lilypie

Thanks as always for such helpful advice. We actually earn almost the same but he pays more household bills than me, but then I usually pay the child care, boys bus fare to school, childcare etc. I have an appointment with an IVA provider next week so I guess I'll just have to see how the want us to split it. Am happy to pay as much as we can, it's our debt after all, just don't want to be utterly penniless in the process. The windfall would be joint but we would both be happy to put it towards clearing the debt. It's difficult to be objective in that although the debts are all in my name, we are jointly responsible for living beyond our means for too long....