Naively have landed myself in a pickle in relation to my IVA

thefox180

13 months ago I was struggling to maintain payments whilst in a DMP and like many others was led into an IVA which in hindsight seems like a misjudgment. It was sold to me as if it was the cure to all my problems but of course things are never that simple. 

I moved back home in May due to declining mental health and have been hiding in my work and just getting through each day. I wasn’t aware of most of the conditions of the IVA and after doing the research I am now in a position where I have no real idea how to move forward. I understand that I should have researched what I was getting myself into beforehand. I’ve been sending almost all of my earnings into my savings since May and I sent a statement to my IP for the past 3 months which showed savings which have totalled over 7k. She has responded by asking how I have accumulated this and what the funds are for. Is there anyway I can respond to this? Am I able to say the money was saved from my expenditures dropping dramatically alongside my income increasing recently which I’ve been forthcoming about. The money has been sent to my brother (7.5k) at the tail end of this month. Could I hypothetically say that this was to cover the rent of his room for the year for which he has already paid? £625*12 = £7,500.00 

My total unsecured debts at the start of my IVA totalled £7,127. I haven’t missed a payment and have made 13 monthly payments of £100 thus far. I was recently informed that my payments were due to increase to £128 per month following my annual review. If my IVA is able to continue I’m sure that I’ll end up paying the total of my debts (or more) and all fees. I’m wondering if there is anyway I can justify recent actions or whether my only option is to accept that I need to allow my agreement to fail/cancel it and find a more suitable alternative.

Beyond confused and sorry if this reads like a big mess.

Isthisforreal99

So you managed to save more than you owed over the last few months. Why not clear your debts and start afresh instead of trying to pull the wool over the IP's eyes by sending £7.5k to your brother. You have possibly dug yourself into a deeper hole.

thefox180

Isthisforreal99 said:

So you managed to save more than you owed over the last few months. Why not clear your debts and start afresh instead of trying to pull the wool over the IP's eyes by sending £7.5k to your brother. You have possibly dug yourself into a deeper hole.

I lent the money to my brother so he could put a deposit down on his first home. It wasn’t done in an attempt to pull wool over anyone’s eyes. I will get it back but not anytime soon. At the time of doing it I wasn’t worrying about my IVA it’s only since that I’ve realised that I have made an error. The statements I provided were for July-September, the money was lent in October. Therefore my IP is not aware of it at this point. I’ve not paid any rent since moving back home so that’s why I was wondering whether I could say that the transfer of funds was due to backdated money owed for rent and for subsequent months to come. My funds now look a lot more basic across both my current and savings account.

Isthisforreal99

You do realise you are suggesting fraud?

thefox180

Isthisforreal99 said:

You do realise you are suggesting fraud?

The way I was shoehorned into this agreement feels fraudulent.

I’ve spoken to my parents and they have suggested I say the money was accumulated whilst being back at home which is true. It has been used to pay off debts I owed to them. Going forwards I will be able to make payments and come the end of the 5 year term I will have paid my creditors in full and covered the fees. I’m really not committing a disgusting crime I just would like to avoid something which a fair amount of effort has gone into already from going pear shaped. 

Isthisforreal99

Did you tell your IP about these 'debts'? No idea what powers they have but I would be treading carefully.

thefox180

Isthisforreal99 said:

Did you tell your IP about these 'debts'? No idea what powers they have but I would be treading carefully.

No I didn’t. 

I do appreciate your responses. Maybe my best approach is say I’ve been accumulating funds to put towards early settlement. I could ask how much this would cost and then try and scrape it together.

thefox180

I’ve made what is seen as a preferential payment, I can’t see anyway that I’ll be able to explain this without it going against the agreed arrangement…

I guess my only option is to not respond to the email, claim that I missed it and see what happens in the long term.

ManyWays

 I could ask how much this would cost and then try and scrape it together.

There is basically no such thing as an early settlement offer in an IVA. If you cannot afford the monthly payments, then the IVA firm may accept an offer coming from a third party. 
But if you have had a windfall or saved the money yourself, it needs to be paid into your IVA and the IVA will continue. Yes, you are likely to repay all the debts in your IVA in this situation. 

I do feel sorry for you, far too many people are talked into IVAs that are either not needed at all, or where another form of insolvency would be better.

But you are signed up to this, and lying to your IVA firm is a bad idea. 

fatbelly

You don't have a particularly good explanation for how you accumulated a lump sum while paying £100 per month into your IVA and the bigger problem is that you have given it away.

I think the safest response to what you have been asked is not to respond.

If I read things correctly you don't have assets to protect  and it doesn't sound like you should have had any form of insolvency.

Yes you could ask how much to settle. It is likely to be more than the value of your debts.

You could just continue paying and see if you can get to 60 months

You could go silent, stop paying and wait for termination. Then manage the debts sensibly.

You could try a formal complaint
https://debtcamel.co.uk/complaint-iva/

Those seem to be the options but not sure which I'd recommend

thefox180

fatbelly said:

You don't have a particularly good explanation for how you accumulated a lump sum while paying £100 per month into your IVA and the bigger problem is that you have given it away.

I think the safest response to what you have been asked is not to respond.

If I read things correctly you don't have assets to protect  and it doesn't sound like you should have had any form of insolvency.

Yes you could ask how much to settle. It is likely to be more than the value of your debts.

You could just continue paying and see if you can get to 60 months

You could go silent, stop paying and wait for termination. Then manage the debts sensibly.

You could try a formal complaint…

Those seem to be the options but not sure which I'd recommend

Thanks for your contribution and advice on this.

I think the best option I have is to continue paying and hope that nothing is made of my recent admission. I have come to realise it was sent to a Review Officer and not directly to my IP. Although she enquired about the accumulation of the funds and what they’re for, suppose I can hope that she hasn’t noted anything on my file in relation to this. I’ve been tying myself in knots about this for days and it’s really not been good for me. 

Is it possible if my payments go up again in the years to come that I end up paying a lot more than the total of my debts & the fees stated? I’m not hugely bothered by the prospect of paying the total back in full+fees over the next 4 years. I am bothered by the idea of it all falling apart and being left with a mess that is a similar size or maybe even bigger than it ever was in the first place.  

I could also consider the suggestion of stopping payments, then sorting out the debts myself, Problem with that is I would be fearful of having the creditors backdating all of the interest that has been frozen under the current agreement. The IVA also remains on my credit file for the same length of time.