IVA arrears and monthly payment reduction

itstricky

My IVA increased from £200 p/m to 350p/m due to car finance being settled leaving me with surplus income. I am struggling to make the payments as I have done when the payments were £200pm along with £150pm car finance. I emailed my IVA company with a revised I&E report and my options are listed below.

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"Your account is currently in breach so if you wish to put forward a request to your creditors to reduce your payments there are 2 options.

The first option is to make a payment to get the account back below your breach level and we then approach your creditors asking them for a reduction in payments.

Arrears are currently £1,612.30

Breach level is £605.10 so you need to get the arrears below £605.10.

A payment of £1,010 would put you just below breach level but you would also have to maintain your payments going forward.

The second option, if you are unable to get the arrears below breach, is we approach your creditors and advise them of the breach giving then the option to terminate the arrangement but then giving them a further option asking them to allow you to continue in the arrangement at the reduced rate and put forward an extension to the arrangement to address the arrears."

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How can I provide an I&E report that shows me having £0 left at the end of each month and then just come up with over £1000 out of the blue? I am making contact with my creditors via the IVA company to tell them I am struggling financially. This doesn't make sense to me?

The second option states that they can approach my creditors as things are without fronting a grand to take me out of breach but they may terminate it. I can't risk having my IVA terminated three years in. That would put me back to square one and my main goal is to get my finances/life back on track after losing a business which subsequently plunged me into the debt.

Any advice would be greatly appreciated so that I can proceed and try to get my IVA lowered slightly to make life a bit more bearable.

Thank you

sourcrates

Hi,

You say you were struggling with the payments before they went up, why in that case did you agree to increase your payments when the finance stopped ?

You can say no to your IP, if it was unafordable, why didn`t you say so ?

Whats your situation, are you a homeowner ? how much did you owe ?

Why did you choose an IVA ?

Second option looks best, termination is the last thing anyone wants as they get nothing basically, they will gladly take a reduced amount over nothing at all.

itstricky

sourcrates said:

Hi,

You say you were struggling with the payments before they went up, why in that case did you agree to increase your payments when the finance stopped ?

You can say no to your IP, if it was unafordable, why didn`t you say so ?

Whats your situation, are you a homeowner ? how much did you owe ?

Why did you choose an IVA ?

Second option looks best, termination is the last thing anyone wants as they get nothing basically, they will gladly take a reduced amount over nothing at all.

Hi,

The first thing I knew about an increase was when I checked my bank account and £350 had been debited by the IVA company. I then cancelled the direct debit and here I am.

I'm not a homeowner and I owed approx £40k.

I chose an IVA because someone I knew recommended it and I saw it as a way to pay some debt back and have have it cleared after the IVA was completed. Was there a better option?

Thanks for your reply.

normanna

itstricky

You probably agreed to increase the monthly payment at the outset when the IVA company knew your car finance would end.  Check your agreement for mention of this.  Cancelling the dd was really not a good thing to do which is why you are in arrears over this.  If you could afford £350 to include the car and you no longer have car payments then what's changed that you now can't afford the £350?  Have you built up other arrears also?

itstricky

normanna said:

itstricky

You probably agreed to increase the monthly payment at the outset when the IVA company knew your car finance would end.  Check your agreement for mention of this.  Cancelling the dd was really not a good thing to do which is why you are in arrears over this.  If you could afford £350 to include the car and you no longer have car payments then what's changed that you now can't afford the £350?  Have you built up other arrears also?

Hi,

You're correct it's in my agreement. I'm very naive about all of this. My car has started giving some wear and tear related costly issues and I also have another child to take into account financially.

Thanks for your reply

normanna

You really need to enter a dialogue with your IVA company to explain your added expenses to see if they could amend your monthly payments in any way to allow you to get back on track.  This may very well mean your IVA is extended to allow your creditors to get back the monies they expected out the outset.  For example they may allow a break to pay for car repairs, however, getting into arrears without discussing your expenses issues and cancelling your direct debit will not have placed you in a favorable position.  Speak with them now before your situation worsens.