Hi
I am half way through my IVA with 2.5 years to go. When I first agreed my IVA I was earning c£26k. The contribution was agreed at a high £500 a month (I'm a professional and had to agree otherwise I would lose my status under bankruptcy). 6 months after the start, I began self-employment and my first year income dropped to £14k, my second year was £20k.
As a result of this drop I am about £4k behind in payments. My creditors from the outset refused a £450 repayment(we tried £250 and £350) and now I've had a downturn in income can I reasonably expect my creditors to vote in favour for a variation to £250 a month? Has anyone else experienced this and got it accepted?
Future earnings may be more than £20k but I am frustrated that I was bullied into £500 a month and now mt income has dropped, find myself in arrears.
Many thanks
Hi
Your IP should hold a variation meeting and ask your creditors to agree to a payment reduction.
I can see no reason why your creditors will refuse this if it is proposed in the right way
Regards
I agree with Andy. If variations are proposed for the right reasons and with your IP's recommendation, they ought to be approved. You will probably find that most of your debts have now been sold to Max Recovery who tend to be extremely sensible and commercial when reviwing this type of proposal.
Push your IP to propose a variation explaining in letter to your creditors all the facts. Good luck.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Thank you experts.
Will they be concerned that it was my choice (and my risk) that my income fell? Will they also be concerned regarding the arrears? I don't want to extend the IVA beyond 5 years and I would be able to catch up as my income rises. Would they also look at (potential) future earnings or base the variation on £14k-£20k income? I would like to pay as much to my creditors as possible but believe that I have been asked to pay more than what I could afford in the past 2 years and would be more comfortable paying £250 - £300 a month. I thought that the IVA would make me feel relaxed, but I feel as if I'm between a rock and a hard-place.
Sorry for all the questions
Many thanks
Yes they will be concerned - but that does not mean that they will not see the commercial sense of the variation to be proposed, and may ask for the duration to be extended.
Your future earnings will continue to be reviewed by your IP, and you will have to accept that if your fortunes change then creditors will expect to share from that.
