Im thinking of failing my IVA and going bankrupt!!

moodswing_2

Hello there, I'm new to this website and forum and could really do with some help.

I owe about £13,000 in total for 2 loan repayments, bank overdraft/charges, and a car payment to my sister (I owe her £7,000). In December 2005 I took out an IVA with IDS who added my sister as a creditor. The initial monthly repayments were £390 for about 10 months then it was going to increase to £690.

In January 2007 I lost my job, but thankfully secured a permanent position a month later. IDS carried out a review of my finances and increased my monthly payments to £891 to clear the arrears and bring my account up-to-date. I have been struggling even more than before and requested that I be allowed to make a temporarily reduced payment of £700 and even provided a detailed breakdown of my monthly outgoings, this was rejected.

In July 2007 I was informed that my tax code had been changed and I received less money in my pay. I contacted the Tax Office who confirmed that I would be paid less from now on. I am now finding it extremely hard to maintain the monthly payments of £700 and pay for my other monthly outgoings. I get telephone calls/comments from my sister every now and then asking whats happening with my repayments which is totally understandable and I feel like a right sh**e for messing her around like this. She advised me yesterday that she has only heard from IDS once, which was when the IVA was first set up 2 years ago.

I am not sure what to do, should I attempt to cancel the IVA and face bankruptcy or should I try and contact IDS to again request that they accept a lower sum.

To be honest, I think I’d rather be rid of IDS as my credit score has been rock bottom for years and I’m fine with that as I’m nowhere near in a position to apply for a mortgage and am very happy with my basic bank account. But my main concern apart from my sister is that the Courts will demand that I sell my car or they seize it themselves. As the car was technically an oral hire purchase agreement between myself and my sister would the Courts be in the right to do this.

Someone please point me in the right direction, I've heard about CCCS who I'm going to call either tonight or tomorrow evening.

Thanks very much

trying-very-trying

I don't know anything at all about IVAs, but I can only assume the company you are using are charging for their services. You should go over to the CCCS website and try out their debt remedy, it will show you the options. Someone else will be along shortly with more experienced advise, but it would help if you post up a statement of affairs, i.e all incomings and outgoings.

immoral_angeluk

Did you tell the company you have your iva with that you're now being paid less?

moodswing_2

I havent told anyone about this as I feel a bit silly and embarrased for getting myself into this mess.

rayday2

I really don't understand how they expect you to make such high payments they sound as much as what the debts were before you started an IVA.

Sorry I can't help but do speak to one of the debt charities, they will be able to advise much better.

trying-very-trying

You'll find lots of moral support as well as advice here moodswing. Have a look at southern scousers sticky here http://forums.moneysavingexpert.com/showthread.html?t=107280

Storm

Some people who go BR are allowed to keep their car I believe - but only if it's required for work purposes, you live in a very isolated area etc and it has to be below a certain value.

Let the company organising your IVA know about you reduced wage - you can't pay money that you don't have to them, and if they've already agreed your budget then they should accept reduced payments, especially if the reason is because of tax.

PixiePie

Hiya Mood, sorry I don't really know much about IVA's and the legalities of the car agreement with your sister, but if you post this on the Bankruptcy and living with it board you probably will be able to get some excellent advice on this stuff. In any case I would say (they'll say this on the BR board as well ) contact one of the free charities - they are impartial so you know they will be giving you the best advice for YOU not for how much money they can get out of you (sorry but I really really hate IVA companies).

Professional, free and impartial advice on debt problems can be obtained from several charitable organisations. They never make a penny from the advice they give, which means it will be given with only your best interests at heart. You can contact:

Your local CAB Office and ask to speak to a 'money advisor'.*** The Consumer Credit Counselling Service (CCCS) *** National Debtline*** Payplan.
(thank you Fermi for that, I stole it from your sig )

Good luck and chin up

moodswing_2

trying-very-trying wrote: »

I don't know anything at all about IVAs, but I can only assume the company you are using are charging for their services. You should go over to the CCCS website and try out their debt remedy, it will show you the options. Someone else will be along shortly with more experienced advise, but it would help if you post up a statement of affairs, i.e all incomings and outgoings.

I'm going to give them a call tonight as I've had enough of this crap and juggling payments here and there each month

Dr_Hook

You need to contact IDS and request that they propose a variation to creditors in light of your new circumstances. They should propose reduced contributions based on your revised income & expendiute (SOA) and should also propose that any arrears be ratified by creditors (i.e. wiped clean).

Be prepared that if creditors stipulated a minimum dividend at the meeting of creditors when the proposal was accepted you may need to extend the term of the arrangement to comply with this at the reduced level of contributions.

If you're having problems with the advisor you speak to, push to speak to the IP supervising your arrangement - you have a right to speak to him/her directly.

It's normal that your sister wouldn't have received payment yet (though she should receive a dividend soon - the first is usually on the 2nd anniversary of the IVA), but she should have received a copy of the annual report.

I think your first step should be to propose a variation, then if that is unsuccessful you still have the option of going bankrupt.

dancingfairy

Hi I don't know much about IVA's but I thknk Payplan have a sister company that deals with this. I think also that though Payplan can give advice free to actually enter an IVA you have to pay. That's not to say you are getting a fair deal or not. I think I would contact one of the charities mentioned here CCCS/CAB etc and see if they can advise on whether your IVA is a reasonable one or not.
The other thing is you could pop up your SOA (see Southern Scousers sticky) and we can see if there are areas you could cut back etc and someone more experienced might be able to give your an idea of whether your IVA is reasonable for someone in your position or not.
Also have you kept a spending diary - you might find you are spending money and not realising it.
Good Luck
df