Overtime being spent on arrears?

johnandkymberley

Hi all, 

So if you are in an Iva you declare overtime and we as a joint Iva know that but the overtime my husband is doing - £200-£300 extra a month is actually being paid on car, utilities, council tax and mortgage arrears. Literally you name it we have arrears in it. We have all evidence of these. 

Im not proud of this at all, please don’t judge. We didn’t get into this state by buying fancy clothes or holidays it was from paying for rounds of IVF for our children. However I assure you my children don’t ever go without though and this has no impact on them we will always make sure of that. On the positive we won’t get into this situation again as we won’t need treatment again! We aren’t addicted to spending. Again so please don’t judge as I find so often people do 

Thanks in advance 

[Deleted User]

What is it you wanted to know?

johnandkymberley

Is it ok to spend that extra overtime money on arrears rather than declare it at the time and at the annual review?? 

MrFrugalFever

Depending on who your Insolvency Practitioner / IVA company is will depend on how the Annual Review is conducted.
you may find that although you’ve received additional income, you’ve also incurred additional necessary expenditure and aren’t in a situation of betterment from it. You may also find that you could end up owing a % of it back in arrears to the IVA agreement for being in breach of the legally binding contract you signed at the beginning of the agreement. It all really boils down to the individual circumstance and the company whom you deal with - so it seems.

sourcrates

johnandkymberley said:

Hi all, 

"So if you are in an Iva you declare overtime and we as a joint Iva" 

Thanks in advance 

Not sure what you are trying to say here, you mention a joint IVA, you cannot have a joint IVA, the clue is in the name really "Individual Voluntary Arrangement" ?

Your "arrears" should have been put in your IVA, not the mortgage obviously, but the utilities and CT should have been.

You should budget for your mortgage arrear's payment, then it won`t form a part of your disposable income.

johnandkymberley

Sorry ‘dual proposal’ it’s called. No we didn’t mention the arrears we just said how much they were per month. We never thought about mentioning them

sourcrates

johnandkymberley said:

Sorry ‘dual proposal’ it’s called. No we didn’t mention the arrears we just said how much they were per month. We never thought about mentioning them

Ah, right, thanks for the clarification, utility bill arrears are unsecured debts.

As such they can almost always be included in an IVA. This includes gas, electricity, water, phone and even Council Tax arrears. 

How far into your arrangement are you, as it may be possible to still add them if they are a significant amount.

johnandkymberley

We have just submitted our annual review documents about a month ago. The arrears equal around 
council tax £500ish
utilities £240
car £600

All these occurred due to my business dying at lockdown and my husband lost his full time job. He got another job but is only part time - which he isn’t happy about but I said a job is a job so take it and look for something else. That is then bumped up with benefits - which we have struggled to know what we are eligible for as we have never needed to claim before. But he is super happy after receiving a call yesterday for an offer for on call firefighter job and now he’s ‘on the rung’ so to say. He’s getting old (38) to be starting a career so it’s now or never really. He’s positive and I am happy for him. Obviously extra money and a good salary if he took on a firefighter role full time eventually. Things may be looking up for us finally! 

Regarding my work, at the moment I can’t due to having twins so to put them in childcare would be too expensive. My job before was working from home 

Thankyou

johnandkymberley

Sorry our 1st annual review 

johnandkymberley

This is off topic slightly but one thing I take solace in is the fact we didn’t get into this position by being addicted to spending or habits etc. The things we paid for we won’t need again. Fertility rates drop every year you age so we just used up any money we could get as I was 26 at the time and to be honest I want a baby so much I didn’t care about money. Now it’s come back to bite us on the bum but I have 3 beautiful children that never go without. They are everything I ever wanted. ‘Health before wealth’ is true in our case. So this is horrible but not forever and in way I don’t regret the money because if I did I wouldn’t wake up to kisses every morning, I wouldn’t be waking up at all.