Current Iva payment problems due to change of circumstances

fatbelly

I agree with Many Ways. If you get to the point where you have to give up work or seriously downgrade your income then your IP should consider completing the IVA on the basis of existing payments. Whether they do or not, you would stop making payment.

I would not be surprised if this doesn't work as you are not far enough into your IVA

When it is terminated you can look at a DRO

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

samb65

Thank you for that link it’s very helpful. IF my available income is above the 75 pounds a month would I be able to go BR? Sorry, this is last question. I presume while I await creditor contact once the Iva is failed I can save any money if there is any to save? 

Grumpelstiltskin

Look forget going bankrupt for the relatively low amount you owe.

If you can't do a DRO ( but that is way down the line) you can do a DMP if you can't get the debts written off.

ManyWays

As you have no other debts outside the IVA, your best options in order are likely to be (1) getting the IVA completed, not failed (half way through this may be possible) (2) a DRO and (3) bankruptcy.

You can go bankrupt if your surplus income is over £75 a month, but (a) you have to pay a £680 fee and (b) you may need to make monthly payments for 3 years. But if the £200 IVA monthly payment is hard at the moment and your income is going to reduce, it's pretty likely you may then qualify for a DRO!

Living in a DMP is unnecessarily stressful if an insolvency option is available, 

If you are struggling at the moment, ask the IVA firm to reduce your payments. Then if your income reduces more, ask them to complete the IVA, not fail it.

This must all be very stressful, but there is no great urgency. It is better to make the decision about which debt solution after your income reduces, even if you feel you would like to get all this sorted now. 

sourcrates

The IP has discretion to reduce your IVA payments by up to 15%, if you insist they go more than that, the missed amounts get added onto the end of your arrangement, so its a short term fix that will still need to be addressed longer term.

I personally would go the whole hog and ask them to accept payments to date in full and final settlement now, if you do this, you will need to give good reason why they should accept, so a deteriorating health condition, leading to a potential loss of employment, would likely fit that bill.

It would have to go to a creditors meeting, so you must make your case as credible as possible, if the choice is accepting payments to date, against IVA failure, and nothing else in the pot, creditors will usually take a commercial decision and accept the loss and move on.

If they don`t accept that, allow it to fail anyway, it will take up to a year for that to happen, and until it fails, you have legal protection from any further action.

Once the dust settles and debt collectors come out the woodwork, employ a similar strategy with them, you can`t afford payments due to ill health and potential loss of employment, its more likely a debt purchaser that paid a few quid for an old insolvency debt will cut their losses and walk away without too much trouble.

samb65

Hi Socrates
i have emailed them with my plight. I have reiterated that my marriage broke down 6 months ago and I moved out the marital home. I have said I still have large items to buy for my home with no cash to buy them. I have tried to keep up to my payments so far. I’ve asked if they can consider lowering my payment as I’m a sole occupant in my flat. I’ve asked them to hold my payment this month whilst they consider. I have mentioned my ill health is a problem and I’m struggling to stay in full time work due to ill health. I looked at my last statement, it looks like as much as I pay ( 2500 ish a year) goes back on in their charges. I owe 18k Many Thanks 

sourcrates

I think you should make a decision, and stick with it, if you decide to ask them to accept payments to date, put it all in a letter, not an email, and send to your IP.