Income reduction in IVA

0ciar01

Hi
I was hoping someone could help me. Myself and my husband have only recently been approved for an IVA. We have made 1 payment so far and tax credits have reassessed us ans reduced our award by over £800 per month (i think we no longer qualify for childcare help). Anyway before the IVA was approved our surplus was £700 per month, we stressed that this would change as we suspected tax credits would reduce.
IVA firm said yes just ring when you find out what new awars will be.
We are now in position of putting payments on hold as our surplus will be in and around £250.
Can someone clarify if this would mean the IVa eill have to be extended past the 5/6 years or would the IVA be recalculated? Sorry for the ramble

sourcrates

Hi,

For such a big difference in payments, this would most likely have to go to a creditors meeting for agreement, if its passed, its also likely the IVA would end up running for 6 years rather than 5.

National_Debtline

Hi Ociar01 and welcome to MSE,


You need to talk to your IVA provider and check the terms and conditions of what you signed - you may be extremely lucky and find you are able to cancel within a cooling off period - but this would be rare I am afraid.

You should also talk to your IVA provider and see what they can do to help, especially as you made them aware of this risk before the IVA began. This would likely require a new creditors meeting as the reduction is so large and if it is agreeable then the IVA may start again. You may need to sign a new agreement so would need to check the term carefully.


However, please be careful about starting a new IVA so quickly. The calculations you have listed don't seem to add up. If your IVA payments were £700 per month, and your tax credits have reduced by £800 per month, you may find it very tight to pay £250 per month into an IVA - so check this is the right option before signing anything new. There can be consequences to IVA's failing and if you have a property or large assets this can be more of an issue as there is a risk of bankruptcy. If you are a homeowner I would suggest you call one of the free debt charities for advice ASAP. Good luck,


Laura
@natdebtline