I have to admit I am really scared.

[pjk]

Hello - I am in year 2 of my IVA. Year 1 was fine, but I have defaulted in year 2 by not increasing the payments or paying the overtime - I could not afford the proposed increase and have to admit the past year personally has been quite horrific. The Supervisor is questioning this now and has sent me a copy of the Report she has sent to the Creditors - I didn't realise this happened either. I'm scared of the consequences of all this and what bankruptcy would mean. I have no property, just my salary which feeds me and my daughter (just started a poorly paid apprenticeship) and no financial support from her father (we have been separated). I had to pay around £600 to get the IVA set up and waited over 6 months from the time of application to the IVA going through the system although I paid contributions in that 6 months which have not been taken into account. How do I know I've made the right decision, can I get out if I want to and what are the consequences of my defaulting. I have to admit I am really scared. Thank you for any advice, P.

[MelanieGiles]

Hi pjk and welcome to the forum

Firstly, how were the contributions you paid to the IP pre-IVA recorded in the IVA documents? Hopefully as a payment on account of the Nominee's fee?

If you feel that the IVA is no longer a sensible option for you, you ought to discuss a reduction in payments with your Supervisor firstly to a level you can afford. Why were your payments increased in Year 2? Your IP may be able to recommend a variation in the IVA terms to your creditors, but this can only be done by calling a new meeting of creditors.

Even though your daughter is poorly paid, she ought to be contributing something towards the household bills.

If bankruptcy seems to be a better option for you now, do discuss the implications of this with your IP before proceeding, and be aware that the Court costs are now £485 which need to be paid in cash at Court on the day of your hearing.

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

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

[lily]

Hi

Just wanted to say that I feel for you in your position, why did you pay 6 months before your IVA was set up??? It seems unfair, what company are you with???

Although I am not an expert I feel that you have tried your best to repay your creditors and now you have to think about what is best for you and I would say with no assets that would be BR. Some members of this site have been through it already, although its daunting its not as bad as it seems, read skippy and scaredkez blog to see what the experience was like for them. You could save the fees by missing the payments on your IVA. I wish you the best of luck with this.

Good luck for you and your daughter

lily

[pjk]

Hello
Thank you both for your replies. I have just trawled through the mounds of paperwork I have - I hadn't realised how long this has been going on and that I have actually entered year 3! A summary of events:

I contacted a Debt Councelling company in August 2004 and paid a total of £600 and they passed me on to an Insolvency Company (they were called Capital but are now called Synergi - hope its ok to quote their name??),

I signed up with Synergi in Sept 2004 though the whole process took until May 2005 for my IVA to be officially set up, so even longer than I thought,

In December 2004 I sent a cheque to them for £582 but cannot remember what that was for,

At some point (I will have to check with my bank the exact date, as I have on-line banking and the records are not clear), I set up a Standing Order payment of £366 before the IVA was officially set up so I am guessing either late 2004 or early 2005,

I continued receiving 'hassle' letters from all my Creditors until the IVA was set up, despite repeatedly writing to them and explaining Synergi was acting on my behalf. I think I have a CCJ as a result. Eventually they stopped from May 05,

I've checked the paperwork but cannot see where the pre-payments of £366 are recorded. The Proposal states 60 payments of £386 per month,

The reasons for the increase to the original figure is because the Agreement states an annual review and increase plus 50% of any overtime payments. My salary increased by a cost of living increase and I assume this has been taken into consideration,

Does this all sound acceptable? I'm not sure how I should check what happened to the pre-Agreement figures I paid and if included somewhere?

Many thanks for your time,
PJK

[Adam Davies]

Hi
Write to Synergi and ask them about the pre IVA payments.There have been other instances on this forum of the same thing.
Having to pay 50 percent of overtime is a standard clause however your cost of living payrises should have been cancelled out by your increased expenditure.Have you been filling out fresh income and expenditure forms each year ?
Do you feel that you can pay into an IVA for another three years even with a reduced amount ? If not then bankruptcy will draw a line under your debt problems and may be a huge relief for you.
have a look at the blogs page as several forum members have gone through bankruptcy and have written about their experiences.
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

[MelanieGiles]

Hi there

If you feel that you cannot afford the new payments set by your IP, you need to explain to them why and show them the additional costs you have incurred over the last year. You will need to be more careful in future about the 50% uplift monies, as these need to be put away each month and not spent.

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

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

[iva_squirrel]

Hi

Im afraid Melanie is right. In this case you really need to talk to your IP and explain why you can't afford the new payments.

Regards,
Michelle P.

[pjk]

Many thanks to you all for your advice.

I will ask my IP for a statement of the amounts I have paid per month since before the IVA officially started and up to date. I assume they will be willing to provide this for me so I can cross check their calculations and figures against my own records? I was so meticulous in year 1 with my record keeping, but the past year I haven't been, mostly due to exhaustion with my job and my ridiculous working hours / days and naively I just let things 'tick along'. I have certainly learned a hard lesson!

I have created a new income and expenditure sheet and detailed the additional costs I incurred during the past year. I will send these to my IP and guess I just have to wait and see what she says.

However, a couple of things puzzle me including a contradiction in documentation. One letter identifies the proposed increased payment last year by an increase of £129 per month and to continue sending 50% of overtime. However, the Report they have sent to the Creditors said the increase figure was 'in order to ensure that her 50% of regular overtime did not need to be paid in a lump sum'. Surely that is a contradiction (and I don't get regular overtime, by the way)?

Also, looking back through my documents, my actual monthly salary increase last year was by £139 per month, so the increase my IP wanted me to pay towards my IVA was the full amount of my salary increase except for £10 per month. It seems to me, if these are the rules, there is no point me having any further salary increases because year as my expenditure may increase, but I have to pay the full salary increase to the IVA.

The more I look into this the more depressing the whole thing seems. If I talk to my IP about the option of Bankruptcy, how will I know she is going to be honest with me as, surely, it is in her and the Creditors interest to try to keep the IVA going but may not be the best option for me?

Sorry for so many questions.... I am so confused ...
PJK

[MelanieGiles]

In my practice, we review a client's income over a previous year, by taking average earnings over that twelve month period, and then using that revised figure as a benchmark for future reviews. Why not suggest that your IP uses this method, as I feel that it is a fairer measure of ongoing affordability, and also allows for increased expenditure which does occur from year to year.

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

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

[Edwina]

Surely you have the annual reports with which to refer

[Edwina]

Did you make your IP aware that you were receiving hassle from your creditors? And whats more did you make your IP aware that there was a creditor threatening a summons?

Are you sure that you have a CCJ registered against you.

Hello
Thank you both for your replies. I have just trawled through the mounds of paperwork I have - I hadn't realised how long this has been going on and that I have actually entered year 3! A summary of events:

I contacted a Debt Councelling company in August 2004 and paid a total of £600 and they passed me on to an Insolvency Company (they were called Capital but are now called Synergi - hope its ok to quote their name??),

I signed up with Synergi in Sept 2004 though the whole process took until May 2005 for my IVA to be officially set up, so even longer than I thought,

In December 2004 I sent a cheque to them for £582 but cannot remember what that was for,

At some point (I will have to check with my bank the exact date, as I have on-line banking and the records are not clear), I set up a Standing Order payment of £366 before the IVA was officially set up so I am guessing either late 2004 or early 2005,

I continued receiving 'hassle' letters from all my Creditors until the IVA was set up, despite repeatedly writing to them and explaining Synergi was acting on my behalf. I think I have a CCJ as a result. Eventually they stopped from May 05,

I've checked the paperwork but cannot see where the pre-payments of £366 are recorded. The Proposal states 60 payments of £386 per month,

The reasons for the increase to the original figure is because the Agreement states an annual review and increase plus 50% of any overtime payments. My salary increased by a cost of living increase and I assume this has been taken into consideration,

Does this all sound acceptable? I'm not sure how I should check what happened to the pre-Agreement figures I paid and if included somewhere?

Many thanks for your time,
PJK

[MelanieGiles]

If you are already in an IVA, having a CCJ registered against you is irrelevant. IPs are not miracle workers, and it is fairly difficult to stop creditors continuing with legal action in the run up to a creditors meeting, without resorting to Interim Order procedures which would not be used merely for an impending CCJ.

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

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

[pjk]

Thank you, Melanie. I will take note and contact my IP with your suggestion.

Thank you to everyone who has given me advice and your thoughts this week. I clearly need to spend the rest of today putting my paperwork in order, going through everything with a fine tooth comb and making a clearly documented proposal for my IP. Your thoughts to my concerns and anxieties this past week have been a great help.

I wish I had known about this Website before I entered into an IVA, but I guess as with most things in life, it's a case of 'learning as you go'!

I will let you know what the response is from my IP - fingers crossed.

PJK

[Adam Davies]

Good luck PJK

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