Fustrated

[d1234]

I have just posted my expense and income form for my 2nd annual review. My wages will be going down in January and my IP has informed me that an extension is likely. There has been some discussion regarding this as my original debts have been sold on. i have researched this and been informed that companies buy debts for c12.5 to 20% of the original total. As my debts totalled £37,500 I assume they were sold on for no more than £7,500.

With my proposed repayments of £335 a month over the remaining 36 months of the IVA that would total £12,060 more to pay. By the end of my 2nd year I will have paid c£10,000 in to my IVA. The original figure for my IVA was £26,880 (£9,000 of which was fees for the IP).

Why should there be a need to extend and why is my IP insisting that they offer to extend rather than offer the revised monthly repayment of £335 first and see what the creditors say? My first 12 months payments were set at £448 and the second years at £503 due to a pay rise. Any clarification would be appreciated. It annoys the hell out of me that the IP doesn't seem to want to fight on my behalf, particularly as they have got £9,000 in fees from this IVA.

By the way there must be a capped time limit for an IVA to run, even with extension surely?

Thanks

[MelanieGiles]

Hi dajoco and welcome to the forum

Firstly the fact that your creditors may have sold their debts for a discounted rate has no bearing on the figures that you still owe. Companies who buy debts do so to make a profit when they receive their repayments.

I personally would not be suggesting that you extend your IVA - leaving that to creditros to modify if they so wish. It is not your fault that your salary has reduced, I assume?

There is no capped time limit for an IVA to run, neither does there need to be. An IVA is a contract between debtor and creditors to repay the amounts due over a time period acceptable to both parties. Five years in the norm in the majority of cases, but this can be shorter or longer depending upon individual circumstances.

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

[d1234]

Thank you for your reply. No, the wage decrease is due to an enforced shift change. I understand the need to pay back the sum agreed in the IVA. My annoyance is with the IP's insistence on immediately offering an extension to the IVA without any negotiation with the creditors beforehand or even seeing how they respond to the proposed repayment figures. For £9,000 I would expect the IP to be a little less defeatist on my behalf.

As for the time limit, I presume then that it means the IVA can continue till the £26,800, set as the agreed repayment figure, is repaid?

[MelanieGiles]

You make some fair points here, which need further discussion with your IP. It is unlikely that the IVA would need to be extended until you have paid the debts in full, but without knowing more about your individual case it is difficult to advise.

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

[d1234]

Thank you for your time - I am now reassured that what I am asking from my IP in this matter is not unreasonable.

[Adam Davies]

Hi dajoco1234
I know how you feel,I was told that I had to increase my IVA by 15 months at my second annual review and I felt totally dejected and angry,her i was two years into my IVA and I was now almost starting again.
As Melanie states your IP should propose the details of your reduced income and then wait for your creditors to accept or modify your IVA.
It has to be said that many IPs post creditors meeting service and attitude is poor and heavily weighted towards the creditors
Please let us know how you get on
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[d1234]

Having advised my IP of what you have said, they are still suggesting that I offer an extension of between 10 to 12 months extension as Eversheds apparently have a record of rejecting any reduction in payments out of hand. I feel I have no choice but to comply with this advice, though whether I can handle 4 more years living like I do is another matter.

It really annoys me since my debts were sold on whilst I was either in debt management leading up to the IVA or during this IVA itself, so the new creditors knew the risks. I think companies should stress MUCH more clearly the possibilities of extensions within the IVA before one signs on the dotted line. In retrospect after a year where my debt management was handled abysmally and now another potential 4 years left on to my 2 years in an IVA, I should have just opted for bankruptcy a long, long time ago.

I think your site is invaluable because there seem to be so many vagaries within the whole debt management concept, that the debtor is completely at the mercy of the creditors and one's legal obligations seem to be an absolute minefield.

[MelanieGiles]

OK - I accept your IP's view, but if you were my client I would leave that to creditors to modify and warn you that there is a strong possibility that this may be asked for. Different IP's have differing views, that does not mean that either of us are right or wrong - just different! And personally I find that Max Recovery - who are your creditor and not Eversheds are amenable to any reasonable offer.

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

[d1234]

Thank you - what is worrying me in this matter is that the IP is saying I risk the creditors rejecting the new repayment and the IVA failing. At this point the IP says they could back date interest on the original debt back to when the IVA started, which means that I would have wasted another two years as the money I have paid so far in the IVA has only covered the IP's fees. This is why I have told them to go ahead with the revised payment and offer an extension but it does not sit comfortably with me at all.

If someone could guarantee that bankruptcy only lasted 3 years maximum then I would take a risk and just offer the revised payment and see what happened as I have no assets. But even experts seem to have varying views on bankruptcy - some state twelve months, some state 3 years and some say it can last 7 years which would be even worse than my current predicament.

It angers me that some people seem to get in to debt without any intention of paying the money back and they seem to get away with it. I have been in debt since graduating 15 years ago and before joining a debt management scheme I rarely missed a payment. All I wanted was some protection against the interest, so that I stood a chance of paying off my debt. I do not deny the debt is my responsibility but I do feel aggrieved at the way this is evolving.

Thank you for your advice - its been very helpful.

[MelanieGiles]

Your IP can adjourn the meeting for up to 14 days to enable you to consider improving your offer if they do not accept the proposed variation.

With regard to bankruptcy, you are generally discharged after one year, if required to pay an IPA or IPO this lasts for 3 years, and the bankruptcy will remain registered on your credit file for 6 years. But you are only bankrupt for one!

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

[d1234]

With regard to bankruptcy - if my IVA fails due to my possible refusal to offer an extension, is there a chance that an application for bankruptcy could be rejected? I have c£37,000 worth of debt, no assets and from January a monthly take home of c £1350?

[R1chard]

i have the same amount of debt as you, and bring home around the same amout but only pay £286.00 into my iva.

57 PAYMENTS TO GO..

[Adam Davies]

Hi
Your application for bankruptcy would not be rejected,it would cost £485 and you would be discharged in one year[possibly earlier].You may have to pay a monthly amount[maximum of 70% of your disposible income]for three years.
If you drive you may lose your car if it is not needed or it is worth more than £2500.
Regards



Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[richy]

I understand how you feel.
my experience with an i.p has also left a sour taste.
I think alot of them are in it for as much money as they can get out of you ,the more you want their help the thousands of pounds more it costs you and so far they have got away with it but a site like this is at last starting to help the thousands of people who need to talk and get help.
I think its still quite a taboo subject and people have suffered in silence until now,i know i did.
Are I.p 's there to help you ,as advertised, or the creditors which seems like what really happens.
It seems because its a legal document and courts are involved the average person panics more and with the stress already involved for at least a couple of years before you get to this stage it is hard to think straight, but keep on at that i.p . if the worst comes you can go bankrupt and probably not have to pay as much back,a glimmer of satisfaction, just a thought,. I paid back all the money i owed and now owe nothing to anyone , although now i,ve got no house, have to pay rent upfront,no credit available , and cant get a motgage of any sort . so was i right who knows, is that any different from being bankrupt, not much ,at least it will be and end to the stress.hope it works out for you well done so far or not losing your head totally can easily happen

[MelanieGiles]

SOME IPs may be in this just to earn money, but to the vast majority of us it is a bit of a vocation.

An IPs role in an IVA is to ensure that monies are repatriated to creditors to the best of a debtor's abilities. The choice to enter into an IVA is the debtors. We did not borrow the money or encourage it to be lent, we are just there to help sort out problems, when things become unaffordable. We are highly experienced and trained professionals, the majority of whom take a great pride in the quality of their work. I give of my time freely and without charge to assist members of this forum, and do resent the general and often critical bashing of my fellow members of a profession of which I am extremely proud.

Of course there are probably some bad apples, but this is the same with any profession and thankfully mine is highly regulated in order to investigate these rare occurances and to take action if necessary.

Just to be a technical bore - it is not an automatic right to have a bankruptcy order, it is at the discretion of the Court. They are rarely refused, but I have known cases to be turned away if the judge feels that there is an alternative solution which could be explored. If an IVA has been rejected, this will lend a lot of support to an order being made.

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