IVA help

Rachelm91

Hi guys, any help would be appreciated.
I started my IVA in November 2018 and my payments were set at £85 until my car finance was due to finish in December this year, and it was then set to increase to £175.
However, I started a new job a couple of months ago and was involved in a car crash which led to a significant increase in my car insurance. Aswell as other increases in expenditure and without my car finance I now have roughly £130 excess to pay to the IVA but my question is, my circumstances won’t change when it comes to the payment increase so if I pay the £130 I can afford will my IVA have to run for longer?
I also sent documentation at the beginning of June, my new income and expenditure but haven’t heard anything back as I expected to have payments increased straight away. My yearly review is the end of October.
Thanks in advance

sourcrates

Things will be moving slower due to covid-19, its at your IP`s discretion how long your arrangement runs for.

Your payments will remain based on your available income.

Just out of interest, how much debt do you have, and who recomended an IVA ?

Based on your monthly payment alone, i would say your debt was less than 10k.

Rachelm91

It was about £17500 I think, I can’t remember who advised me for an IVA but I was put through to who ever it was by citizens advice. 

I now know that an IVA probably wasn’t the best decision as I don’t own a house and live with my parents. Definitely wish I’d put more thought into but it sounded perfect at the time.
Im just worried that if I can’t afford to pay the amount it was agreed to go up to that they will extend my IVA as I was told it would only be 5 year when I took it out.

fatbelly

Rachelm91 said:

It was about £17500 I think, I can’t remember who advised me for an IVA but I was put through to who ever it was by citizens advice. 

I now know that an IVA probably wasn’t the best decision as I don’t own a house and live with my parents. Definitely wish I’d put more thought into but it sounded perfect at the time.
Im just worried that if I can’t afford to pay the amount it was agreed to go up to that they will extend my IVA as I was told it would only be 5 year when I took it out.

As someone who's a debt adviser with Citizens Advice, that's a bit worrying.

I wonder if the CA adviser referred you to Stepchange or Payplan  for a debt management plan and then they suggested an IVA?, 

I can't imagine a CA adviser would ever recommend an IVA for a non-homeowner with 17k of debt. It could be dmp, dro or bankruptcy but an iva would have no advantage, except to the insolvency practitioner who set it up.

Rachelm91

The person I spoke to at Citizens Advice went through the various options including an IVA. I can’t really remember whether I had decided on the IVA whilst speaking with CA or whether it was the company I was put through, but the person at CA definitely spoke to me about it and didn’t advise me against it.

sourcrates

Rachelm91 said:

The person I spoke to at Citizens Advice went through the various options including an IVA. I can’t really remember whether I had decided on the IVA whilst speaking with CA or whether it was the company I was put through, but the person at CA definitely spoke to me about it and didn’t advise me against it.

A standard monthly payment IVA lasts for 5 years. Over this time you are required to make 60 monthly payments towards your debt.

This period is not legally prescribed. In addition it is not dependent on how much you owe. It has simply become a generally accepted standard length for most commercial creditors.

After all of the payments have been completed it is possible that some of the debt included in the Arrangement will remain outstanding. This is then written off by the creditors.

The length of an IVA can be extended past 5 years. One of the most common reasons for this is if payments are missed.

These will then need to be made up by adding them at the end. As such the length of the agreement is extended.

Another reason for an IVA to be extended is if the monthly payments are reduced.

This may be possible after a fall in income or increase in living expenses. However it will normally result in an extension of the Arrangement for a further 12 months.