2yrs into IVA - want to go BR

simpywimpy

Spoke to stepchange this morning about moving from IVA to BR for a friend of mine.

They tell me he needs a certificate of discharge from DFD. Having had real problems getting the to act or respond over the last few months, he has cancelled their standing order for November. Is it likely to be difficult to get this?

The reason for BR is that he is 20k negative equity and stuck in a house that has no heating/hot water and other repairs needing that he hasnt got the spare cash to repair so wants to hand back the keys, take BR and move into rented accommodation while he gets back on his feet.

fermi

In a strictly legal sense, StepChange are wrong as a certificate is not needed.

The law says a judge can legally grant the bankruptcy order if they are satisfied that:

that the debtor has failed to comply with his obligations under the voluntary arrangement,

Obviously a certificate or whatever they give out for the failure is incontrovertible proof, but depending on the judge other evidence can be acceptable. Some dig their feet in and insist on formal confirmation of the failure, while others will accept other evidence proving substantial unresolved arrears under the IVA for example. It really depends on the judge though. If you can't get a certificate or equivalent than it may be worth enquiring with your local court to see if they know what stance their judges generally take.

simpywimpy

Thanks for the reply Ive no experience of BR or IVA for that matter so trying to look for answers is proving difficult.

He has cancelled his mortgage payment too and will speak to the mortgage company - kensington - on monday with a view to voluntary reposession but info on this route seems geared towards preventing you losing your home rather than for someone who decides to hand it back.

Giggles_Fairy

Tell your friend to write a cancellation letter to his IVA company explaining he wishes to terminate his IVA with immediate affect as hehas reassessed his personal circumstances and wishes to pursue bankruptcy. Also state you wish a failure certificate to be issued wtihin 30 days - make not make any difference but no harm in saying it. Send recoreded delivery / fax or email as well if you can, i.e. cover all bases. Then chase the company for confirmation it was received and confirmation failure report will be sent. Theya re quite easy for an IP to do but they may have a backlog.

Other if he has cancelled the payment it will fall into breach when it is 3 months in arrears. Your friend will then get a notice of breach letter giving him 30 days to rectify it, then the arrangement will be failed. So potentially it could be 4-5 months before the IVA is failed. This is useful if he needs the time to gather funds to help him move on and pay for the bankruptcy without creditors taking further action (as he is covered by the terms of the IVA until it is failed) however if he already has the funds and wants to process the bankruptcy asap sending the cancellation letter is best.

SPELLKASTER

I am in the same situation as your friend with DFD.

I had cancelled my IVA end of July because I could not afford the payments any more.

They had increased my payments from a manageable £130 a month to an unmanageable £175 a month.

They made the IVA deliberately unaffordable.

I have also been told that again I need to wait 6 months.

I have approached National Debtline who have said I cant do anything without the certificate of failure to come through.

Surely this is unacceptable to wait 6 months!?

longtermplanner

Surely this is unacceptable to wait 6 months!?

well it isn't great, but does it make much difference to you? You have stopped making the unaffordable IVA payments.

If it does, then you should put in a formal written complaint to DFD about the delay.

SPELLKASTER

longtermplanner wrote: »

well it isn't great, but does it make much difference to you? You have stopped making the unaffordable IVA payments.

If it does, then you should put in a formal written complaint to DFD about the delay.

Not much point.

I spoke to DFD today and they said that they had a backlog of cases and mine would now be over 6 months!!

However I am going to make a complaint to the Insolvency people regarding the IVA in general and the fact that they took my DLA as income and not disregarding it for health costs.

DorisTrousers

SPELLKASTER wrote: »

Not much point.

I spoke to DFD today and they said that they had a backlog of cases and mine would now be over 6 months!!

However I am going to make a complaint to the Insolvency people regarding the IVA in general and the fact that they took my DLA as income and not disregarding it for health costs.

They are legally bound to document it as an income, as would be an intermediary for a DRO, or the OR in BR. They should have classed the same amount going out however as care costs, so it balances as, effectively, zero. If that has been done, and you may need to check your original proposal for confirmation, then nothing untoward there, but you certainly have grounds for complaint if it hasn't.

SPELLKASTER

DorisTrousers wrote: »

They are legally bound to document it as an income, as would be an intermediary for a DRO, or the OR in BR. They should have classed the same amount going out however as care costs, so it balances as, effectively, zero. If that has been done, and you may need to check your original proposal for confirmation, then nothing untoward there, but you certainly have grounds for complaint if it hasn't.

I have looked at the original propsal and it is clearly showing DLA as income and nothing has been disregarded for healthcare costs like dental treatment etc.

My gums and teeth are very bad now and this is why I had to cancel because they wanted more and more money which I simply could not afford.

I know for a fact the DLA is disregarded in a DRO application because when I got the checklist from National Debtline DLA was disregarded so I am complaining to the Insolvency people about this!!

tomtontom

SPELLKASTER wrote: »

I have looked at the original propsal and it is clearly showing DLA as income and nothing has been disregarded for healthcare costs like dental treatment etc.

My gums and teeth are very bad now and this is why I had to cancel because they wanted more and more money which I simply could not afford.

I know for a fact the DLA is disregarded in a DRO application because when I got the checklist from National Debtline DLA was disregarded so I am complaining to the Insolvency people about this!!

DLA is for care needs, not for you to have your teeth done. Perhaps you should sit down with someone from CAB who can see your paperwork, as last time you asked about this you'd completely misunderstood.

SPELLKASTER

tomtontom wrote: »

DLA is for care needs, not for you to have your teeth done. Perhaps you should sit down with someone from CAB who can see your paperwork, as last time you asked about this you'd completely misunderstood.

DLA is indeed used for things like dental treatment and itd also used to fund perscriptions as well.

As I stated when I went through my income and expenditure with National Debtline they told me as well that DLA should be used to pay for dental treatment and perscriptions.

I dont receive any help at all with healthcare costs.