IVA with CreditFix has just been extended?

Lightattheend

It's been a very long time since I last posted but I could really do with some help.

So my IVA was set up with CreditFix in Oct 2019. It was at a reasonable amount to start (£136) with but then over doubled (£277) when they did my first annual review. At my second annual review I pointed out that some bills (electricity/gas for example) had increased but I heard nothing from them until an email yesterday.  They offered to reduce the payments so I thought this was a consequence of the annual review, just rather late.  I really do need to decrease my payment as I am struggling at the moment however when I signed up for it they said it meant extending the IVA by 12 months!  So my IVA was for £14,646, I'd done really well for a while but then had mental health issues, and I've apparently paid off £6336 to date.  I thought an IVA was to allow you to contribute towards the debt but no necessarily pay it all off? 

So I'm after some advice please. Have I got it wrong and an IVA must pay off all the debt and secondly can they increase the period of the IVA?  Any advice would be gratefully received as money always affects my mental health 

Lightattheend

Meant to add they've reduced the payment to £201.32 and they have to approach the creditors before agreeing it

fatbelly

They're the ones that have come up wit the extra 12 months. I'm assuming that you are not a homeowner.

This is how to complain

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

Lightattheend

I'm not a homeowner. Thanks fatbelly

fatbelly

Two and a half years in you may be best to see it through if they can be reasonable with you.

However, it sounds like this may not have been the best option for you as a non-homeowner with low surplus income and 14k debt. Bankruptcy or (if you could be squeezed in) a DRO would have been better.

I hope you're not using PIP or DLA money to fund this

sourcrates

Your IP has discretion to reduce payments by up to 15%, any more reduction than that requires a creditors meeting.

The payment amounts that are reduced, must still be repaid, they do that by extending your arrangement.

You won`t have paid anything off your IVA as yet, the money is disbursed by your IP at certain intervals during your arrangement, your monthly payment also funds and charges the IP has imposed, any fee`s, VAT, interest, and any other sundry payments, so the final figures won`t be known till this is over, its not a straightforward repayment plan, it doesn't work that way.

I agree with fatbelly that you may have been wrongly advised on this option, a DRO would probably have suited you better.

fatbelly

Debt camel has written an article about this

https://debtcamel.co.uk/end-iva-change-to-dro/

MrFrugalFever

It is entirely possible to have your IVA extended as a non-homeowner, this can happen when a debtor fails to inform their IP of a change in income circumstances (an increase in income). There must have been a significant change in income or lowering of expenses on essential items for them to alter the payment from the first I&E assessment that you would have had to do at the beginning of the agreement.

Your IP has a bit of flexibility as sourcrates suggests but ultimately your creditors must agree at a variation meeting if you are asking to lower payments significantly.

It is also entirely possible to pay back MORE during the course of your IVA than what you owed originally, This will be due to your income & expenditure over 5 years as a non-homeowner and the fees involved in administration of the insolvency.

As mentioned above, it appears that an IVA perhaps wasn’t the best solution for you. However, the situation is what it is and you will just need to learn to live with it or look at failing the IVA with a view to using an alternative debt solution, perhaps a discussion with StepChange could help here.

Lightattheend

Thanks everyone, I'll have a good read of all these messages tomorrow with fresh eyes 

Lightattheend

I know I'm late updating but just wanted to say thanks for the messages. I've decided to leave my IVA to work out, hopefully with the reduced sum and extra year but if not as it is now.

I got into the IVA when I was still recovering from 6 months off with mental health issues and took the first way out I was offered. Having been through bankruptcy in 2009, I really had been strict with myself but mental health and money usually, for me at least, mean a degree of lack of control. It wasn't a big debt but I wanted it sorted and got talked into the IVA. My salary did go up after the first year so hence the jump in monthly payments. I also think they made the initial payments lower to tempt me in. But, you live and learn. I am now back to my earlier days on here (post bankruptcy), budgeting well and feeling good. Thanks again.