IVA Savings

Sekki

Hi,

I have been on an IVA for a few months and filled out a expenditure form dictating how much I spend and at the end we had a disposable income which is what we pay each month to the IVA.
My question is on the expenditure form there are things I have now stopped using so I can save this money e.g TV license, Travel (I walk to work a few weeks a month), Food (I cut down on what I eat so I can save more) etc.. Are these things okay for me to save as I am married and my wife is not from the UK, we need to save a few thousand every 2.5 years to reapply for the visa so she can stay in the UK and we can be together but we can only save that money by cutting back on things where possible.

With the things I cut out i'm saving about £300 a month which i'm just putting away for the visa application later when I need the money but i'm worried in my annual review they will ask why I have money and why I was able to put it away when I have debts to pay off, I thought you shouldn't really have any savings during an IVA but I cant have my wife being deported because I cant afford the application and long distance is heart breaking so i'm in a bit of a tough place with it.

Also we are looking to move flat for better job opportunities but that costs money too....

The annual review they ask for 3 months pay slips and bank statements and my savings account is with my bank but in a separate ISA account.

If anyone could give some advise and shine some light on the situation if you have been on an IVA before and know a thing or two It would be much appreciated!

Thanks.

mwarby

I think you might have an issue with £300 a month. When the IVA was setup you'd have signed a statement about the income and expenditure being accurate, and there will also be something about keeping the IVA company up to date with changes. All parties know it won't be perfect, but I think £300 would be seen as excessive.

I would raise it sooner rather than later, it will make the review easier. It might be that they say thats fine and we have no issues with it, in which case you can save and not worry. They might say that being able to economise and save £50 a month is fine, but more would need you income and expenditure to be redone. If they arent ok with you saving £300 a month you can be a bit less frugal and demonstrate reasonable costs (like what you need to eat well, vs to get by), if you leave it till review you might get locked in to your frugal ways, but not be able to save any of it (worst of both worlds)

Did you dicuss the visa at the outset ? I think it should really have been put down as an expense, although I'm not sure its one that would have been OK with the creditors

Sekki

@mwarby I told the debt help company who did the IVA with me but I don't think they are the company i'm on the IVA with, they are a company who submit my case as far as I know but I asked them if being on an IVA when having a visa application was fine and they knew it was a big concern but it was okay for me to make the application, only thing about saving a small amount is the application alone if 1.5k and the other parts can cost £500-700 e.g. getting a company to look over the documents and get medical tests done.

I mean I could be spending that money on what I stated in the IVA like travel and food and id happily have a TV licence again, the only reason I cut them out if to save for the visa application.

also in those savings are house maintenance, clothing allowance, meals for work, dental and optical, hairdressing and these things I don't need to spend money on every single month so it is just sitting there after everything has been paid out but with what I save from cutting back with the other things its closer to £400 

When I spoke with them they said I can save what I don't spend in my budget and as long as I have a good reason for the savings there wont be an issue but they never stated how much I would be able to save each month.

Also if they do the review and only need 3 months bank statements could I just not transfer any savings during those 3 months and they would be non the wiser, i dont want to do anything dodgy as its my wife's life with me at stake in the grand scheme of things and nothing is more important but Its not fair them not letting me save the money I need to be with my wife...

Sekki

Also my IVA amount is £7.8k
If I increased my monthly payments does that mean I could potentially pay it off early
I pay £112 now but say I get a new job and can afford an extra £200 so I pay them £300 a month that would mean I payed the full amount off in just 2 years or would I have to stay on the IVA for the full length of time?

mwarby

what was your original debt 7.8k would be quite low for an IVA ?

the maximum you'd repay is the original debt plus IP fees of 2-3k (varies)

mwarby

Sekki said:

When I spoke with them they said I can save what I don't spend in my budget and as long as I have a good reason for the savings there wont be an issue but they never stated how much I would be able to save each month.

I suspect though they didn't forsee you not spending £300 a month, that's an exceptionally high figure. Some might say its high enough to bring your original statement of affairs into question. I would be checking with them. I would also be wary of not saving 3 months before the review, that looks like your trying to hide something, which isn't a good look, it's quite likely they have the right to see all your bank statements if needed

Sekki

Im thinking of cancelling the IVA at this point but dont know if there are any fees I would need to pay.

When I started it and looking at it now there were a lot of blanks left out which ive had to find out for myself, only thing im scared of is being stuck with more debt than I started with.

Any advice?

sourcrates

You were badly advised to take out an IVA for a debt under 8 grand.

I had an IVA, but my debt was £78.000, i also had no assets, so should have opted for bankrupcy, but instead i opted for an IVA, which was an option for me, but not the best, i should have gone bankrupt, from what you say, you should have gone into debt mangement.

You can`t cancel an IVA, but you can let it fail, simply by stopping payment, these companies are more sales people than debt advisors, as they make money from the fee`s you pay, only take advice from someone with no interest in selling you anything.

Sekki

@sourcrates
If I failed the IVA would it affect my wife's visa application as if i'm made bankrupt she will be deported when we renew our visa in a years time.

Also would I be stuck with a bill from the IVA company for IP fees as when I read through my contract its just a bunch of jargon and there are no actual figures and nothing really solid about cancelling, I think its so they make it hard for you to do and would I just need to start paying all my creditors again?

Sekki

and im happy to stay on the IVA as long as I can save and there wont be any issues, I also dont mind increasing the monthly payments so I can pay it off quicker but I dont know if these things are options as they never explained this side of it to me, you hit the nail on the head with I think they were just trying to sell something for a commission and fees 

mwarby

Sekki said:

@sourcrates
If I failed the IVA would it affect my wife's visa application as if i'm made bankrupt she will be deported when we renew our visa in a years time.

Also would I be stuck with a bill from the IVA company for IP fees as when I read through my contract its just a bunch of jargon and there are no actual figures and nothing really solid about cancelling, I think its so they make it hard for you to do and would I just need to start paying all my creditors again?

You can’t cancel an IVA there’s only two routes out
- complete the IVA
- fail the IVA (many IVA contracts give the IP the right to bankrupt you)

The only way you don’t pay any IP fees are if after the IVA completes you have paid less in monthly repayments than the original debts

You have confirmed your original debts, but if they are 7800 the chances are you’ll pay off the IVA early, especially if the IVA company expect the increased repayments. I see little point in failing the IVA as you’d still be stuck with the fees and be back to creditors chasing you