Can things get any worse?

[kitkat44444]

Husband and I have just had our first year review in our IVA and received a letter from IP today saying they feel a continued contribution of £275 representing 41.39 p/£ is a fair amount.

Since we started our IVA our nett income has dropped by approx £330 per month. Our total debts are just under £24K. For our first year we have struggled to pay our monthly contribution of £275pm which equates to 41.39p in £ using all my husband's redundancy money and handouts from family (though they do not know why!). We submitted a revised income and expenditure account with our papers for the review offering £200 per month which would have been manageable for us.

Our IP was aware every step of the way re our change in income following my husband's redundancy but obviously feel we can somehow grow the extra needed to maintain £275 pm on our money tree in the back garden!!! Sorry but I am so annoyed I just had to let off steam and I know there will be people reading this who sympathise. Can anyone offer any suggestions on our next move?

On top of all this our interest payments have gone up again on our mortgage while we were waiting for the IP to grant permission to switch to interest only forcing us into arrears on our mortgage (an arranged underpayment) and our washing machine has broken down this week and I can't afford for someone to fix it!!!! AAAAAAAAAAARG!!!!

Kitkat44444

[catullus]

Hello kitkat44444

An annual review should adjust to your actual circumstances and not what the IP thinks you should pay but, having said that, is there anything in your proposal or modifications that could cause problems such as a minimum dividend requirement or a provision that you cannot propose a variation before a set time has expired?

[MelanieGiles]

The only way that you could reduce the payments to £200 is by specific variation of the proposal, so of you genuinely believe that you cannot pay at the current rate you should ask your IP to see creditor agreement to lower then at a newly convened creditors meeting. Of course there is no guarantee of acceptance. Bankruptcy proceedings may also be an alternative, if you feel harshly treated, or you could resort to the Court to challenge the Supervisor's decision.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[kitkat44444]

Hi Catullus,

I have double checked our arrangement details and there is nothing in there to say a fixed time frame has to pass before a variation can be made to our contributions. I have contacted our IP to ask again if a variation can be made and if not to explain how they came to the decision they did, given that the were in full knowledge of our situation. Thanks for your feedback.


Kitkat44444

[catullus]

Do you have a minimum dividend requirement ?

[MelanieGiles]

Variation would deal with that point as well, n'est ce pas?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[catullus]

Well I'm not sure on that.

If there is no minimum dividend requirement and depending on the way that the proposal is worded regarding variations and annual reviews, I'm wondering whether technically it is necessary to revert to creditors on what may only be a temporary reduction in contributions.

Thinking of the proposal that we use I can't think of a reason why we would need to seek a variation (but I may have had a glass of wine too much!!)

[MelanieGiles]

Yes - you're right as this may be only a temporary decrease until the poster's husband finds alternative employment which we hope he will.

If there are the standard Max Recovery mods, then a six-month payment reduction period may suffice or allow the necessary breathing space for this couple to get back on their feet. Formal variations should only be done if they are necessary.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp