IVA Queries

Dparki79

Hi, I am currently 3.5 years into an IVA with Payplan. I have been pretty lax with things and I have decided I need to be more proactve so I know where I should be.

I recently have secured a 8k payrise - I have not yet informed Payplan of this but I would need to provide the payslips at my next review. With the payrise in mind I am just wondering if there is something I can do to be able to retain any of this by moving my expenditure. Is there any sort of guideline as to what is to be considered reasonable. I presumably have to inform about this straight away rather than in June when my yearly review happens or I would be liable for back payments.

I am currently paying £370 a month with a salary of 21000 which makes things pretty tight. I have an old car and at the point where it needs replacing, maintenance costs are mounting and it makes things tight to juggle. My intention was to make do till the end of the 5 years.

As I understand things, I will be making payments for 5 years, does this mean my last payment would be the month before my first payment, just so I am not making extra payments.

Any feedback would be appreciated, as I would need to question payplan as I am not sure if they are working for my best interests. I have not missed any payments and everything is going to plan.

MrFrugalFever

Hi, 

It sounds like you haven’t fully understood or engaged with the terms and conditions of an IVA agreement fully.
You MUST inform the IP of any significant changes in your circumstances such as pay decreases, redundancies, additional expenditure AND pay increases. I would suggest another £8k pa is a significant change.
If you wait until your review, they are likely to give you a couple of options - pay the difference of disposable unexpected income since pay increase immediately in full or add it to the end of your IVA, meaning it will exceed 60 months. You could also risk having a ‘breach’ marker on your annual review reported to creditors. 

You can potentially get away with increasing expenditure to counter additional pay in areas of essential and necessary expenditure such as food shopping, but invariably the creditors will want a larger slice of the pie, after all, you owe them money.
In the very worst case, your IP fails the IVA and creditors petition for your bankruptcy.

You’re a good chunk of the way in to the IVA, personally I would comply with payplans terms and suck it up until final 60 month payment is made and you have your completion certificate in your hand then what you do after that is entirely up to you.

Dparki79

I intended to inform them I was more so just looking for information as to what was kind of expected, I am to phone them during the week so I can increase my payments as I want things to end when they should especially as the markers stay on for a year afterwards.

I totally expect my payments to go up and rightly they should do. I was just wondering if there was a percentage base I could push my expenditure up by and if I could actually have a way to keep a little of it. When I first did my expenses I found it hard as I was unsure of what the expected ranged were in each field. Shortly after my IVA, I was diagnosed with Type 1 diabetes, so my expenses went up. At each review I have been reluctant to change anything, but I was going to use the payrise to try and negotiate at least 10 percent of it for myself as things are really tight.

Ah right so it is potentially 60 payments, so my last payment should be the month before I started 5 years on. I am just really looking forward to the end of things. I certainly would suck up whatever is said, just am not sure if I should willingly accept everything or whether to approach them with a view of upping my expenses a little.

Thankyou for the feedback. I only just checked as I didn't get a notification of a response initially, appreciated.

sourcrates

Your payment should always be affordable, likewise your budget should always be realistic.

Your IP has discretion to lower payments by up to a certain percentage without the need for a creditors meeting, but if you are struggling financially, then you must tell them so.

If you need to alter things to any great extent, then a creditors meeting will be necessary to approve it.

Dparki79

sourcrates said:

Your payment should always be affordable, likewise your budget should always be realistic.

Your IP has discretion to lower payments by up to a certain percentage without the need for a creditors meeting, but if you are struggling financially, then you must tell them so.

If you need to alter things to any great extent, then a creditors meeting will be necessary to approve it.

I will try and remain as I am and just see if I can keep any of my payrise.

The only time I have really found it hard was when I had car expenses - £850, having an old car makes it pretty difficult, as it is at the point where if I had spare money it would make more sense to actually replace it.

I was also diagnose with type 1 - so perhaps should have asked to increase my food expenses at the time. Now I only have 15 more payments left so I think I would rather just get by and get to the end of things, and get my life back on track.

Many thanks for the feedback, extra knowledge for when I discuss things with payplan next week.

MrFrugalFever

You can ‘save’ money in an IVA. If you find that you can cut back the odd £10 here and there you can put that aside in a savings pot and use that towards any unexpected bills, such as the car payments. You are also entitled to have payment breaks (up to 9 in total) but remember this will prolong your IVA completion by the same amount of months taken in payment break.

if your expenses have increased, naturally they may well have done since you started, especially as cost of fuel and energy has soared, you might find re-evaluating your I&E is appropriate at this stage anyway.