Advice re IVA and Furlough

fedupiva

Hi, I am currently in year 6 of IVA having been unable to release equity after 5 years.  I have just been Furloughed and therefore salary has reduced by 20%.  I have requested Stepchange reduce my monthly payment by 25% as per their new limits without a variation for 2 months as I expect to be back at work after that.  They have said this amount will have to be added to the end of the iva, which is not what is suggested in the article on here, it says only repayment holidays have to be added to the end.  The whole point of an iva payment is based on your income minus your agreed budget.  My income has reduced through no fault of my own, so should they be honouring this request without adding it on at the end.  Really don't want to extend it past the 6 years.  Thanks

Jeremy535897

Their website seems comprehensive and clear. I doubt you'll do any better.
https://www.stepchange.org/debt-info/coronavirus-advice-for-clients.aspx

Grumpy_chap

As you are furloughed, some parts of your agreed budget may also have changed, for example commuting cost.

fedupiva

Grumpy_chap said:

As you are furloughed, some parts of your agreed budget may also have changed, for example commuting cost.

Nothing has really changed in terms of the budget as all business miles were paid by my company and I did very few personal miles to make a difference.  I was working away 4 days a week before so all food, utilities were less than now with me being at home, so if anything my budget has increased..

diggingdude

out of interest if salary drops 20% why would payment reduce 25%?

fedupiva

Jeremy535897 said:

Their website seems comprehensive and clear. I doubt you'll do 

Its not clear about reducing your payment due to your available amount reducing, only If you want to take a complete payment holiday ie nothing for a couple of months,  I understand why they are added to the end.  Im requesting a reduction for two months resulting from my disposable income changes and therefore you do not have the same amount spare to pay into your iva, compounded by the fact im in year 6, so I have already paid 5 years and paid substantially more back than was first agreed.  I get I owed it, but either it's there to help or not.

fedupiva

diggingdude said:

out of interest if salary drops 20% why would payment reduce 25%?

I know it sounds weird but that's not how it works.  20% of salary is approx £400, the most they can reduce payment without variation is 25% which for me is £105, so I would still be net £295 a month worse.  In reality I only have £20 a month spare to pay into IVA now whilst Furloughed but they would never accept that

Jeremy535897

All you can do is try to argue your case with them. I think you can reduce your payments. This is on their website. But you would have to make it up I think.

Can you reduce my payment or give me a payment break?

If you’re seriously affected by coronavirus and need a payment break or reduced payment, please contact us first to let us know.