Do you think it wise to go for IVA now ?

[kathy]

Sold our property two years ago. Most of assets from that have gone to repay debts or to live on as husband self employed and does not earn anything some weeks. We rent a property. I pick up around 1100 per month after deductions.

Would we qualify for an IVA because husband self employed and earnings fluctuate and would this affect us renting a property. We are virtually paying off debts out of last bit of money left from property sale but that soon will run out and we will be unable to pay anything.

Do you think it wise to to for IVA now and would we be able to hang on to any savings that we have.

[kezza]

Hi there,

From the information I have gathered, it seems that if you are self employed they will take your average monthly income as what you earn so if you earn £1000 one month and only £500 the next the average would be £750.

I don't know as to the time scale for working out your average, I suppose it depends on how long you have been self employed for.

[MelanieGiles]

Hi Kathy

Whether is is sensible for you to propose an IVA at this point in time will be dependent upon how much you owe, who it is owed to and how much you can pay back. Can you give us some more information.

An IVA is perfectly acceptable if your husband is self-employed - indeed if I go back to the mid 1980's when the IVA procedure was "born", they were specifically designed for self-employed persons. But it is always more difficult to gauge the affordability of monthly contributions where income fluctuates. For this very reason I always put a clause into the proposals for my clients which allows for payments to be made within a three month window - ie if the monthly contributions are £300 - there must be £900 paid each quarter. So it doesn't matter if you pay £100 in month 1 and £800 in month 3, so long as by the end of each quarter the full amount has been received. This seems to work quite well.

Any savings you have at the time of proposing your IVA will need to be declared, but if they are needed to be used as working capital within your husband's business then it may be possible to exclude them depending upon the amount you are holding and what is needed.

Happy to give more advice if you can give more details about your circumstances.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk