earning more than now when iva was accepted

[chimpsuit]

I had an iva approved last june, i am paying 250 a month.

I am a self employed taxi driver and currantly i am earning more than what i was when the iva was accepted.

I am getting by ok as due to the nature of my job i get a lot of cash extra ie tips.

I understand that if i earn more i will have to pay more to my creditors. Is there anything to stop me taking a couple of months off so that i dont earn any extra as i dont want to be working more than i need to if its all going to my creditors.

Any advice welcome Thanks

[MelanieGiles]

Hi chimpsuit

I am not entirely sure that that is actually in the spirit of your agreement to repay your creditors, but in principal so long as you are maintaining your IVA payments in the manner offered to creditors in theory you could take a work-break.

The very principle of entering into an IVA is that you wish to put your best foot forward with regard to repaying the debts. I suspect you need to rethink whether you are going to be acting in the best interests of your creditors by doing as you suggest. When you borrowed the money, it was lent to you on the basis that it would be repaid!

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

[finebridge]

I agree with Melanie's comments in respect of the moral issue here. If you are able to pay back more, then I believe you should try. That said, if you were unable to work through illness and had a shortfall in income for a period, would creditors be so quick to take no money?

The proper advice is to pay the money into the IVA. I'll leave the moral dilemma to you.

Brian Baker

Finebridge Ltd
22 Laud Street, Croydon, CR0 1SU
0800 180 4212
www.finebridge.co.uk

[neverending]

I,m afraid I can,t agree with both of you on this count.Morals do not come into it for me,and I hope others will agree with me,trying to sort the mess out for myself and my family is all that matters to me.
Lets be honest guys......morals play no part with banks or any other lending institution.If they had the option to turf you and your family out of your home so that they received ALL their money then they would.
Chimpsuit...........take the time off and spend it with your family,rest assured that Mr High St bank will survive.
Regards

[Skippy]

I'm sorry, I do agree with Neverending here. I didn't borrow the money with the intention of not paying it back, each time I took out a loan it was to try and gte myself out of the hole, and each time I used a credit card it was to live. However, I don't feel any guilt or moral responsibility to the banks. If I knew at the beginning of my IVA what I know now I would have petitioned for bankruptcy rather than struggling for the next five years. I am four months into my IVA and feel as if I am surviving, rather than living, and that is only due to the generosity of my partner and mum. If I had of been made bankrupt my creditors would still have got something as I am working. It's still at the back of my mind to do it.

Can I ask your opinion Neverending? If you had been me, what would you have done? I am £65k in debt, have no assets apart from a car, don't work in a job that would be affected and am not worried about the announcement in the paper. I'd be interested to know what you think.

Four down, fifty six to go until freedom!

[MelanieGiles]

You both make interesting points, and of course I am on the other side of the fence and not living through a harsh repayment regime for the next five years, but I can't help but feel that your IVA's were not properly thought through from the beginning.

An IVA is not meant to be a drachonian method of repayment - indeed neither is bankruptcy these days. What is supposed to happen is that you agree an affordable repayment programme with your creditors - which allows you sufficient room to live a reasonably comfortable living.

The role of the Nominee is to ensure that your proposals are workable and represent a solution which is likely to return the dividend originally envisaged for creditors. In both cases, it seems to me that the system has failed you - and therefore your views of the process are rather negative. I wonder if it was the creditors who put you into this situation by putting forward unrealistic modifications which you felt you had no choice to accept, the insolvency practitioners who told you what you were "allowed" to spend, or yourselves being unrealistic by thinking that you could afford the payments without taking account of contingencies.

Let's explore these issues further, as affordability is a critical part of and IVA's success, and there are far too many people at the moment being pushed into agreeing payments which are beyond their means.

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

For further details contact me at http://melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Skippy]

I was just so pleased that I could finally do something about my debt problems that I was happy to sign the expenditure form that was given to me. Looking back it was totally unrealistic, to the point where it actually worries me that I signed it.

The mortgage and bills are in my partners name, and I give him my share (we pay half each for the bills, but I earn more than him). The mortgage is approx £570 per month, and I give him £200. When my expenditure was written out, they took £570 of his money and added it to my salary, meaning that he paid it all. A lot of the bills are higher than what I actually give to my partner, but it still leaves me short by £100, which as you can imagine is a lot in my situation!

I really wish I hadn't been so desperate to get everything sorted out at any cost. The problem is, my IVA was accepted at 27p in the pound, so there wasn't much room to juggle the figures.

The budget that I was given was realistic, apart from the mortgage figure, and if I had that extra £100 I wouldn't be well off but I would be comfortable. At the moment I am surviving, not living, and I can't see that lasting for 5 years. My partner is a self empoyed handyman and has been doing reasonably recently, hence he can help me. However, this can change at any time, and we will then really struggle.

I know all this is my own stupid fault, but I really don't know what to do. My partner keeps saying it's ok, we're managing, but I don't know how much longer we can manage for. The debts are mine (he has hardly benefited from them) and it's not fair that he is going without due to my problems.

I'm sorry to ramble on Melanie and I don't know if you can answer this - would I be better going bankrupt sooner rather than later? I know it's not an ideal situation, but the next five years look very bleak at the moment, and if my partner's work dries up at all, very hungry!!!

The only asset I have is my car, and I do need a car for work. I appreciate I would probably have to sell the car, but would the OR let me have money for another one?

I know I will have to make payments if I am made bankrupt, but will I be able to re-negotiate them, or would they automatically be the same as the IVA ones.

I'm sorry for all the questions, but I really am getting desperate. No one knows about this - I'm good at hiding my feelings!

Thanks in advance for your advice.

Four down, fifty six to go until freedom!

[freelili]

I have to agree with neverending, why should we be loyal to the banks, when they are forcing honest people into poverty for trying to protect their home? Furthermore they would rather see people go bankrupt and get nothing because they simply cannot afford their increasing demands through an IVA. How many of us have been bombarded with calls from the bank to take out more and more credit? They should take some of the responsibilty with lending limits. They descend on us like we dont deserve to live when we have problems and cannot maintain payments, being on the recieving end of their attack is not nice, some have taken their own lives because of it. If the banks are insisting on a certain percentage, ie HSBC, NR) how can be deemed as 'affordable'? I doubt if anyone on this forum has not gone through hell when realising what their financial situation is and we are constantly reminded that our 'sins' are visiting our children, its tough. I am not an immoral person, I will put the needs of my family before the duty to the creditors everytime.

Skippy you will not pay as much to and IPO in bankruptcy, they are much more generous with outgoings and their own fees come first, the creditors get whats left and it would be much less than in an IVA would give, you have tried, put your own needs first.

LILY

[Skippy]

Thanks Lily. I phoned my case manager today and she is going to send me a new income and expenditure form and I am going to make sure it's realistic this time, even if it results in bankruptcy. There is a clause in my IVA stating that there can be no variations within the first 24 months, but I am not prepared to struggle on for the next 2 years, making my payments and be told that they won't accept the variation so I'd have to go bankrupt anyway!

Four down, fifty six to go until freedom!

[freelili]

Skippy

The car is needed for work and myvesta told me that the OR would never look to take a car that you rely on for work, unless its worth thousands of pounds. It cost them to sell it so if its a rolls I think you may be OK. Even if they do want it you would get funds for a suitable replacement. Good luck with the form and whatever you decide is best for you.

LILY

[Skippy]

They also told me that there is very little leeway with my figures as I am only returning 27p in the pound as it is. I can't help feeling that the figures were jigged about to make sure that the IVA would be accepted, even though it was unrealistic to expect me to live on those sums. Although I knew about the forum then I wish I had asked for advice before I agreed to anything. Mind you, I feel better than I have done for a long time - what will be will be, and if the outcome is bankruptcy, at least I have tried.

Four down, fifty six to go until freedom!

[freelili]

I am sorry chimpsuit for gate crashing your post.

I really dont understand this pence in the pound thing, I have read several times that less than 25p is un-workable. I am probably not the best person to talk to about this at the moment, I am still a bit miffed about this moral thing. Who would put themselves through this debt stress? Its the worst time in all our lives. right? Its not too far short of sack cloths and ashes for you guys is it, for 5 years. People may think I have a get out of jail free card but I have lost so much more than the creditors. If I had accidently ran over a person I wouldn't feel as guilty as I do right now. Dont be scared Tracey, do what you need to do, for you. You were honest with the creditors, your trying to be honest with the IP, yes, what will be will be.

Good luck
Over and out.

LILY

[MelanieGiles]

Skippy

The only person you need to be honest with is yourself! It seems to me that you are struggling at a very early stage of your IVA, to the extent that you are starting to resent it. In other words the IVA has simply replaced the pressure you were under from the creditors collectively, and therefore it is not giving you the opportunity to move forward.

You admit that you do not understand where some of the figures came from, and that you probably signed the paperwork under duress, without really thinking things through carefully. I do wonder whether you had the best advice in the first place - who is your IP? Did you meet them personally or was everything done over the phone?

You are entitled to declare yourself bankrupt to get away from the pressure, and Lily is right that the Official Reciever tends to be more generous with regard to allowable expenditure - after all you are going bankrupt because you cannot afford to pay the contributions any more, so they are not going to make you pay the same amount - and your partner's income does not come into the equation.

With regard to your car, you will be allowed to keep a car up to the value of £3,500 in bankruptcy. If your car is worth more than this, then it will have to be sold but you will be given a £3,500 allowance from the sale proceeds to source a replacement.

If you feel that you want to continue with the IVA, but have your payments reduced, this can only be done by formal variation. I have many times managed to vary arrangements providing a lower dividend than 25p in the £ - so give it a go if you think it is worth it. If it doesn't work, then maybe bankruptcy becomes more appealing.

Continue to post for us, as you are one of our most valued members - you too Lily!!!



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

For further details contact me at http://melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[phill]

Firstly I agree with the 3 of you!
Skippy i was considering an iva but the figures the banks expect you to pay back are unrealistic (HSBC and MBNA) and reading your post has almost convinced me that bankruptcy is the best way forward. Does any one know the best way to go about this? Going to try and see if i can get in with Cit Advice Bureau next week I want to try and get on with this as quick as poss though

[freelili]

Hello Phil
I think I have spoken to you before, I would try www.myvesta.org.uk. They will practically walk you through bankruptcy, there are also videos on the subject for you to watch. You can also talk directly to someone online. CAB is an option but with so many people in debt these days they are usually really busy.

Good luck and keep posting.

LILY