I've had IVA approved in February and I've been struggling ever since. I think I felt under pressure to get the things on IVA moving and I didn't think my income and expenditure through, or perhaps I thought it would work but it turns out I'm struggling financially at the end of every month. Not drastically but I am. I'm also finding it hard not being able to afford things like birthday gifts or not having any allowance for holiday. I understand I put myself in this position but I really can't imagine my life like this over the next 5 years. I now realise bankruptcy would be much better option for me. My agreed monthly payment is £158 which will over next 6 months increase to £190 (due to one missed payment - I asked for one exception as I was moving and needed extra cash for a deposit..). I can barely afford £158.. Shall I speak to Payplan (who's sorted out my IVA for me) or directly to my IP. Would they say I'm unreasonable wanting to go bankrupt? Thanks for your help in advance.
Hi --- you will initially need to speak to your case officer at Payplan and request to speak to your IP --- to be honest I would be surprised if you manage to speak to him / her directly.
There is every possibility of going Bankrupt instead. You will need the IVA to fail first and will also need to get together the £700 fees.
Be prepared for payments over three years of a similar level to those you make now --- you will not know how much they will require you to pay until after you have been declared bankrupt.
Everything you have paid so far will be lost.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
If bankruptcy is the best option you should stop paying the IVA and gather the money for the fees. The IVA will not be failed straightaway so you will still be protected from creditors. Speak to Payplan and see if there are any other options.
I agree with Michael - if you are going BR then you may as well keep your monthly payments to save up for your BR fees. It is a shame that your IVa will fail after only a short time in it but better this was if it is your only option than you struggle month to month which is not how IVAs are meant to be managed. You shouldnt have felt rushed into your IVA or given chance to consider your I&E carefully so it may have been a than an IVA fom the start was not your best option.
Chat it through with Payplan as a matter of urgency and discuss the next steps. Make sure if you do go BR that you are realisitc with your I&E to ensure you do not get ocercommitted in a BR payment that you cannot afford either.
Keep us posted how you get on.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
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Thank you so much for your response. I feel so much better now knowing I've indeed got an option here.
My Payplan case officer is hard to get hold of and I've got a phone conversation scheduled with her anyway on 1st of July. We were going to discuss new income and expenditure but I got a feeling from her there isn't much movement there especially with extra that was spread over 6 months. Shall I wait till the 1st or email my case officer before we speak to let her know my intentions?
Can I still ask them to fail my IVA even if they manage to reduce the payment slightly? Can I just tell them I changed my mind, don't feel comfortable with it and I definitely want to go bankrupt? I've only paid them 3 times, do you think that covers their fee? Will they want me to pay more towards it?
Apologies for so many questions, I always feel very nervous before talking to them.
You do not have to pay anything and if bankruptcy is the correct way forward then Payplan cannot make you continue on with the IVA. It may be worth stopping your payments until you speak to payplan in July.
Won't you be required to make payments at the same level if you go bankrupt? Are you really sure this is a better option in the long run - as your income will be assessed by the Official Receiver on the same basis - and at worse you could end up paying even more?
A shame that more thought was not put into this by all parties prior to signing on the dotted line. Did your IP discuss the option of bankruptcy with you during the early stages?
I understand that I might have to pay monthly for 3 years after being declared bankrupt however this time I'm planning on making sure the income and expenditure are just right. I don't suppose with my 35k debt I'll be able to pay £100 monthly towards IVA and I understand it will be more possible with IPA as the minimum payment there is lower.
I've put a lot of thought into this and I appreciate your help on this forum so much! I will definitely keep you updated.
I'll speak to Payplan on Monday and ask them to fail my IVA. I hope they won't make it too difficult.
The Official Receiver will compare the figures you present to them in bankruptcy, against the IVA proposals - and will want to know why there are variances, so please do be careful that you don't make the wrong decision and end up in a worse place.
We are here to help wherever we possibly can Kasia, but your own IP is really the best source of advice and support - I hope!
I am struggling to know how he can end up in a worse place, surely the OR use their own manual to look at reasonable I & E, his present IVA allowances decided by his creditors, are not written in stone for others to emulate, IVAs fail due to affordability, no-one can argue with the step change figures, and also no OR can impose figures upon the bankrupt due to needing the bankrupt to sign and agree the IPA, and also the bankrupt has recourse to the courts for final sanction something the OR will not want or have time for. Finally should the bankrupt have a period of unemployment or any other reason he cannot pay his agreed dues during the three years,then is not his order suspended until, or if, his situation recovers when he resumes not having to pay the months he misses, for example an IPA for thirty six months, employment for twelve of those months equals twelve payments only IPA over, not like an IVA when his terms are simply extended beyond his five or six year period, and finally do you not agree whether he meets his IPA payments or not his financial problems are over, unlike the IVA where unless he goes the full distance after posting his final payment he is still in debt to his creditors, please explain how he could possibly be worse off by leaving his IVA.
Trust me, The Major, it can and does happen. The OR often work to different figures to StepChange or CFS, and their staff are allowed to exercise an element of discretion - so nothing set in tablets of stone unfortunately.
If the bankrupt becomes unemployed, there is no suspension of the Agreement or Order - it can only last for the 36 months set, and if there is a change of circumstances then this has to be taken into account.
I definitely agree with you that bankruptcy is the ultimate financial conclusion - its after effects, as with IVAs and other debt solution continue into the future with regard to credit rating and worthiness.
Thanks you for the reply, however just to be clear on your first paragraph whatever table the OR uses it cannot be enforced upon the bankrupt without the bankrupt agreeing to it, if agreement cannot be reached then a Judge can preside because the courts have overall control over all bankruptcies, then your second paragraph although the IPA is set up at any time during the un-discharged period of twelve months, it will last no longer than 36 months but if income is only at a surplus for twelve of those months then only 12 months payments are made, and if at the end of the 36 months only twelve payments are made due to affordability then the IPA concludes.
