Change of circumstances during IVA

Ashige

My English is quite poor so I'll try to put it simple in hope you'll understand what I'm trying to ask. I've just started my IVA with monthly payment of 70£ and earnings of 1700£ but due to change of circumstances I'll be earning around 2500£ per month now as I understand I will pay around 300£ extra to my creditors each month. And now my question I still have over 50 payments to do but if my income stay stable (2500£/month) after 50 months I'm supposed to pay around 15000£ to my creditors which will be much greater from about 6000 I've owned them at the beginning without any deductions before IVA started any chance to avoid such overpayment?

fatbelly

Once you've paid the debts in full plus the IP fees, the IVA completes. So you won't necessarily pay £6000 extra, though fees can be a few thousand.

How much are your debts in total?

Do you own your own house?

Ashige

I'm private tenant I don't own any property. Debt taken into IVA was roughly 5700£ in total

fatbelly

Really? £5700, not £57000?

and no asset to protect?

I'd suggest running this past someone independent like National Debtline and think about a complaint

https://debtcamel.co.uk/complaint-iva/

and possible termination, followed by a normal debt management plan with stepchange or payplan, who do not charge a fee

sourcrates

Ashige said:

I'm private tenant I don't own any property. Debt taken into IVA was roughly 5700£ in total

Shakes head in disbelief......your debt is only £5700 ? and you were advised an IVA was the right debt solution for you.

You should not be in an IVA with debts that small, i suspect you took advice from an IVA lead company, and the rest is history.

This mis-selling is a problem on a massive scale, IVA`s were designed for those with assets they needed to protect, who also had massive debts typically of 30-40k upwards, so could not go bankrupt.

Debt management or debt relief order would have been more suitable perhaps, I would ditch the IVA and just pay your creditors yourself when funds allow, otherwise the fee`s will most likely outstrip the amount of debt you have, crazy.

Ashige

Well I was advised to go into IVA it's provided by FSS in my case and yes my debt in total was roughly 5700£. If I terminate my IVA won't I still have to pay management fee to FSS? 

fatbelly

They should only charge for actual work done. With other IPs in these circumstances I have known them to drop the charges but I have had no dealings with FSS

I note their own website says

Whether an IVA is suitable depends on your personal circumstances but in short if you meet the basic criteria below it could be an option for you:

• You owe more than £6,000 of unsecured debts (either yourself or jointly with your partner)

• You owe money to two or more debts

• You have a regular income from benefits and/or employment and can afford to pay £100 or more to your creditors,

I think 6k is far too low but you were not within the two of the criteria they state and so that should be the start of your complaint

Ashige

Should I complain directly to FSS or should I look for other place to do so?

Ashige

Have read my agreement and ther is only 5280.39£ of debt to be honest

sourcrates

Ashige said:

Should I complain directly to FSS or should I look for other place to do so?

You make your complaint to your Insolvency Practitioner, guidance can be found here -

Complain about an insolvency practitioner - GOV.UK (www.gov.uk)

You should do this in writing, give as much detail as you can, an IVA was wholly unsuitable for you given your circumstances, much better suited options were available.

Include what fatbelly referred too in his previous post.

Now whether you should stop paying the IVA is a difficult question, personally I would let it fail, it can take a few months for it to be wound down, but non payment usually does the trick.

You would then be free to make your own arrangements with your creditors, with your low level of debt, and your increased income, you can be debt free in no time.

I would be interested to hear what fatbelly thinks about your next steps.

fatbelly

Yes, I agree but follow the debt camel guidance to start with which says to start by getting information without mentioning the word 'complaint'

The complaint to the IP comes in at step 4