IVA Breach, advise needed.

chkychmp · 16 January 2018 at 12:34PM

Hi everyone.
I'm looking for some advise on my IVA.
My iva has only just started, only 2 payments made. We are still catching up on overdue payments for utility bills so we had to take out a loan for £400 to pay overdue amounts and so we could get food shopping for that month.
I was under the impression we were ok to do this as i thought we could take out credit of up to £500.

I informed my iva company that we took out the loan, they told me that they would issue a notice of breach because we obtained credit without their consent.

We have received the letter of breach which says because we informed them we obtained credit over £500 then we are in breach and have 1 month to rectify it.

I read thoroughly through the terms for my iva and it clearly states in there that we can obtain credit up to £500 for essential services like gas, electricity, insurance and phones. For credit over £500 would need permission from supervisor.
The credit was not over £500 and it was for essential services.

I've contacted iva and voiced my concerns about this, she responded she spoke to her manager and he says we are still in breach as iva does not cover loans of the type we took out.
Nowhere in the terms does it say we cannot take out credit of a certain type.

So i do not agree with the breach, but where do i go from here?
Can i argue the breach and complain?
Or shall i just accept it and rectify it?

PrettyKittyKat · 16 January 2018 at 9:10PM

You can raise a complaint with the company if you feel the breach is unjust and as such should not be reported to your creditors. I would put in writing, quoting the section in your IVA terms that states you can take credit under £500. You need to propose how you are intending to pay this back, e.g. it is £x per month for x months and how you are affording this, e.g. we have an entertainment budget of £40 per month which will be used to repay this loan.

A huge concern here though, is how you are £400 behind in your utilities after only 2 months? If this debt is from prior to two months ago, why isn't it included in your IVA?

Also, you say you needed the loan to buy food - why? You have an allowance for this.

The IVA company is right to be very concerned that you are needing to take credit after only two months, it doesn't bode well for the longevity of the IVA.

National_Debtline · 22 January 2018 at 12:13PM

Hello chkychmp

By all means pursue a complaint, yes, if what the company are saying is at odds with the terms of the contract. As the above poster says, however, the bigger issue is the viability of the whole arrangement - a good insolvency practitioner ought to ensure the IVA is set up on solid foundations and that any immediate priority needs are addressed. That would arguably be a much bigger ground for complaint if it transpired they hadn't taken sufficient account of anything you may have told them beforehand about energy arrears.

Dennis
@natdebtline

IVA Breach, advise needed.

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