I am in the process of drafting my IVA with a reputable IVA company but have encountered somewhat of a problem. My IP wants me to propose a monthly payment of around GBP 670 per month on a total debt of GBP 43,000. When you do the math this is a total repayment of 40,200 less fees (I guess around 72p in the pound). As I am nearly repaying the total debt and the monthly repayment I am starting to wonder if this is right for me.
I also receive a non contractual annual bonus, which going forward should be between 5k-10k before tax.
Further, my partner has a good income but she is also heavily in debt (but will not go into a joint IVA). At the moment these are on credit cards which require only small monthly payments, so really she is just paying of the interest, but she makes larger payments to actually payoff some of the capital otherwise she will be in a debt circle.
My IP argues that if my partner has higher monthly payments stated, then the creditors would view this as my income going to pay-off her debt.
Just hoping an IP can give me their view?
Also, can you confirm if my partner’s expenditure for her creditors will be listed on the IVA (i.e. would this show a breakdown of payments to each of her creditors or rather just a lump amount paid on a monthly basis?
Thanks,
Boznich
Can you afford the £670 a month to the IVA? It looks like you could pay off your debts in full using a non fee paying DMP in just over 5 years(providing interest was stopped).
Remember that an IVA isnt just about what can be written off,its about ensuring creditors cannot continue to add charges and interest onto your debts. It would given peace of mind over a DMP. What company have you approached,as any good firm should give you all the options,not just tell you to do an IVA?!?
And your bonus would could as a windfall and be drawn into the IVA pot also.
Not sure how your partners expenditure would be broken down,but probably individuals payments to creditors would be required,but only to make sure a fair share of household bills are paid by both of you.
Do you have equity in property at all?
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
If your partner can afford to pay her contractual payments and make reductions to the balances that is her right. The income and expenditure account should be split to show each party pays their fair share of the household bills. The surplus money is then split according to income and if your partner has money it is hers to do with as she wishes.
The £670 should be your surplus alone and nothing to do with your partner who is not liable for your debts. I do think if your IVA is proposed in its current form there is a good chance of rejection for the reasons Paul has mentioned and there is a danger that your partner is being unfairly treated. Take a second opinion.
Thanks again for your help. I asked the IP and they confirmed what you guys said with my partners income. That's great news to understand as it really worried her.
Out of interest, as her debt is equally not my responsibility why would it be even included on the IVA. I think i might be missing something, but if that is the case, why would her monthly debt repayments be even be included on the IVA - should it not just be the household expenditure (rent etc)??
It is to show that your creditors and her creditors are being treated fairly. If for example she earned less than you but was paying more towards her debts than you were paying into an IVA that would be wrong. The whole idea is transparency and showing creditors that what is on offer is the best you can propose.
The 670 does seem to be very steep for us to afford, it leaves us with very little money. I have a call with the IP and will be discussing today.
I went to the IP via CAB and i can confirm both gave me several options.
And no i am renting so have no equity in a property.
Thanks,
Boznich
Your IVA lasts for 5 years(possibly longer),so please make sure that you can afford to keep up the payments from the start. If you think the 670 a month will be a struggle then explain this to your IP BEFORE you agree to anything. Dont lower your expenditure just because your IP says so. Money is tight during an IVA but it has to be affordable to work.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Is there any linkage between you and your partner - joint ownership of assets? Children? Joint debts? If not, then why is she being mentioned in your IVA at all?
We did have a joint account that was -2221 overdrawn. She was able to clear the debt on the account and I have already informed my drafter of the proposal. Perhaps it was initially included as we had this joint account.
I will contact them to clarify.
Last edited by boznich80 on Wed Mar 17, 2010 1:14 pm, edited 1 time in total.
Sorry to come back again, but in that case can we calculate the household expenditure then halve it to get my portion (although 100% disclosed) and take this off my salary to get the IVA payment?
Would i not need to include her income as well in any form? Or is that to show that she has enough to cover her portion of the household expenditure?
It does make sense and IVA stands for 'individual' voluntary arrangement. Whoever is drafting your proposal should do so based on your circumstances and not some sort of industry average. If you moved in together and the deal was you each pay have the bills then a single I&E is sufficient using your surplus to fund your IVA. Creditors have no right to delve into your partner's affairs nor does a Trustee in bankruptcy or the Official Receiver.
I quote from the guidelines;
'Where resistance to the disclosure of the partner's income is encountered, in the absence of any information to the contrary, it is appropriate for the official receiver to assume that the working partner pays for 50% of all household expenditure. This amount can then be incorporated into an IPA/IPO calculation to assist the official receiver's decision as to whether the bankrupt has sufficient surplus income against which an IPA/IPO can be obtained. It is likely that an assumption of this nature will provoke a response from the bankrupt and/or their partner and if the required information is then forthcoming, the official receiver may re-calculate the income and expenditure of the bankrupt taking in to account the information provided with regard to the actual contribution of the partner, to establish whether the bankrupt has surplus income available for an IPA/IPO. Flexibility will be required in any re-assessment, especially where the partner works part-time.'
I would treat you as an individual and if there is no need to mention your partner, then why confuse matters - however I would firstly satisfy myself that you were both paying fair shares towards the household income.
