IVA breach

bridget44

Hi wondering if anyone can help. I have been in an iva for 2 years I took voluntary redundancy in may I didn't realise I had to inform my IP, I have now spoken to them hoping for a final settlement. I have spent quite a bit of my redundancy, they now say I am now in breach they are sending me out information on what to do next I have 11,700 of payments left which I have offered them 15,000 to cover this but because I didn't declare my full redundancy they say I will have to pay back the full amount. what to do next and how to get out of this nightmare!!

mwarby

I'm not sure but I think this is being is maybe being over egged by whoever you've been talking to at your IVA firm. Yes you should have told them earlier, but it's only 3 month late and you are offering more than they predicted they would get over the term

it would help us to know

Are you currently in work, or still looking
Have you continued to make monthly repayments ?
How much of the redundancy has been spent and on what ? (cost of living, or items that could be deemed luxury) ?

I expect the issue comes from the fact that some of redundancy would be treated as a windfall. This cannot be used for a full and final, a full and final has to be new money they're not already entitled to.

I'm sure no creditor or IVA firm objects to redundancy money being used for essential expenditure(as per iva budget) and your circumstances have changed, this will almost certainly need a modification of some sort (unless you've started a near identical job already)

Bear in mind its in the IVA firms interest for the IVA to succeed, unless you've gone nuts with spending redundancy I'd be surprised if something can't be worked out, although maybe not the full and final you'd like

bridget44

I am currently out of work on job seekers but I am actively looking. I have continued to make all payments to date. I have spent about 20k so far about 5 k for bills 5k helping my son moving and house repairs and 10k for my daughter who is returning to uni as a post graduate and needed to pay for her course and books needed it is a law course.

Giggles_Fairy

Your IVA company is correct - this is a breach.


As you have been out of work for 3-4 months you could state that you needed 4 x the monthly wage your IVA payment was based upon to have maintained your outgoings for the last 4 months. You could also ask if you could retain a further x amount of months (say 2 so it is 6 months overall) to maintain your outgoings for the next two months and allow time to find another job. After that, it depends on your IVA proposal but the rest or possible 50% needs to be paid into the IVA asap.


if after the 6 months you have not find work it is likely you will be given payment holidays to give you more time to find one... if you still haven't by the time they are used up then you may be in a position to offer a full and final settlement based upon contributions made to date (including the redundancy you have already paid in) to your creditors.


I recommend you speak to your IVA company straight away and ask them to calculate how much you should have paid in, pay in as soon as possible that you have left. If that isn't enough you will have to wait until you find work then consider offering a variation to your creditors, you may need to compensate them for not introducing the full required funds by offering an extension.

bridget44

I have heard from my IVA they have asked for bank statements ect and my job seekers paperwork, they have asked me how am I going to rectify this problem, I wont ba able to keep the payments up and no job as yet. Really stressed about the situation,

Giggles_Fairy

Have you asked them how much they calculate you should have paid in and what process you should have followed? If you know this you will have an idea of what to offer to rectify the situation.


Has the IVA company given you your 100p in the £ figure? If your redundancy will pay this figures then you can just pay this off and complete your IVA you will not need to continue making payments.


How is the job search going?


How much of your redundancy do you have left? You mention you have spent 20k and have offered 15k to the IVA - is that everything you have left?