16 months into IVA & now they tell us!

[tigger]

Hi,

I’m currently in month 16 of my IVA and have run into my first real problem. As part of the original IVA the bank overdraft (approx. 4k to NatWest) was included. Although the IVA is in my name alone the bank account was in joint names( purely to allow Child & Tax Credits to be paid in). My wife’s name only appeared on the account towards the end of 2005 (after we were married) while I had been the principle account holder since Jan 1996.

The IVA was agreed in November 2006 with the only debt being actively pursued was the NatWest overdraft. Moorcroft were initially chasing the debt but stopped in March 2007 after I sent them all the information concerning the IVA. Now a company called AIC have now contacted my wife yesterday trying to recover the full amount of the debt from her alone.

I contacted Clear Start this morning who informed me for THE FIRST TIME that “oh dear” even though the debt is included in the IVA my wife is still liable for the remainder of the debt that is not covered by the IVA dividend (my dividend is 25p to the £). During all the hassle with Moorcroft last year we were never told of this liability.

Clear Start suggested that my wife now writes to ICA requesting a payment plan based on what she can afford to pay – but we run a tight enough ship as it is with the IVA! My major gripe is that Clear Start, until today, never ever made us aware of this liability.

Any advice or further suggestions will be greatly appreciated! [:)]

[MelanieGiles]

That should have been highlighted as a priority area of risk for your wife at an early stage of the process, and consideration should have been given to how she would be able to pay off the liability - as it is a joint and several debt.

Is your wife contributing any of her income to your IVA payments?

[tigger]

Hi Melanie,

Yep, my wife's income is taken into account for my IVA. But she only earns £200 per month as a part-time dinner lady!

regards

David

[tigger]

and just to add...

From looking at my yearly review, 100% of my wife's wages is taken into account when calculationg my monthly iva contribution.

thanks

DAvid

[MelanieGiles]

So - her disposable income should firstly be required for her to pay her own creditors, and any balance used to fund yours. Your IP needs to sort this out for you, at the end of the day it should have been spotted prior to the IVA proposal being proposed.

[tigger]

Hi Melanie,

Will forward everything to my IP as a matter of course. Clear Start informed us last year that everything had been sorted out with Moorcroft regarding this matter. Am I correct in assuming that Moorcroft have simply sold the debt on?

thanks

David

[debbiw]

Tigger, if you can keep us posted of what happens with this, as I have a IVA, but had a joint account with my husband, overdrawn £1500, which was included in my IVA. Payplan have said that the bank may start asking for the money back from my husband now, but as its a relatively small amount, may not do anything. We are just waiting to see what happens.

[Hull_Tiger]

To be fair, I'm in the same position with my Natwest O/D (£1100).
Theoretical question to the experts:
If they pursue the full amount of this with my partner and we find the money to pay it, does it get removed from the IVA thus increasing the overall dividend?

[debbiw]

Yes it does Hull_Tiger. I asked the question to my IP

[tigger]

Hi

Will keep everybody updated. I've also been told that once Moorcroft were informed that the debt had been included in an IVA they probably bounced the debt back to NatWest - hence the sudden appearance of another collection firm AIC!

However, once my IVA is completed, will the debt be written off or will they continue to hound my wife for payemnt?

regards

David

[debbiw]

Hi Tigger, Payplan told me that because the debt was in joint names, they can persue my husband for the £1500 overdraft on our joint acc. If my husband paid it, I had to contact my IP, and he would take it out when he divided my IVA money between my creditors..

[ianmillington]

Where there are only 1 or 2 relatively small joint debts which makes it uneconomic to do 2 IVAs it's generally a good idea to put a clause in the proposal to release the co-debtor. Clearly the creditor concerned has to agree to the proposal and not modify the clause out.

Given that you might think your IP ought to have pointed this out to you at the start, I think you have grounds to ask him either to approach the creditor and get confirmation that they won't be claiming from your wife, The IVA could then be varied to incorporate the provision. As it won't affect any of the other creditors so long as NatWest agree (to be safe actively agree) then the variation should go through. Alternatively, you could ask for a variation to enable the payments into the IVA to be reduced so your wife can meet her obligations.

Ian

[tigger]

Thanks Ian,

Claer Start became quite flusttered when they realised that I'd never received the appropriate advice regarding this debt!

David

[ianmillington]

Sounds like you might just get them round to your way of thinking here.

[Adam Davies]

Hi
Just to clarify for all that with joint debts if only one person enters into an IVA then an allowance must be made in the expenditure allowance for the non IVA partner to service the debt as they will be chased for the full debt.
Tigger,you have been poorly advised by Clearstart and as Ian states they need to help you get this sorted.
Do you regularly earn overtime or a bonus ? If so I would insist that you use this to cover your partners debt before splitting it and paying half over to your
IP
Regards