I believe I may have been sold an IVA incorrectly, I am not a home owner, have no tangible assets to "protect", the monthly amount I have to pay was set up at the start of the IVA 2.5 years ago and is a "rolling " amount that increases by £50 per month each year for 5 years, with my disposeable income with the cost of living increases is now at about £150.00 per month, my payments should be £450.00 per month, my partner who was not with me when the debts were incurred "subsidises" me over and above the contribution she makes to the household bills each month so that I can continue to pay. Would going bankrupt be a better option. Can you advise please
Hey v6daddy, welcome to the forum. You are half way through so I would contact your IP and see if you can lower your payments so that you can afford them, as if you do go BR then you will probably have to pay an IPA for three years. I've not heard about the "rolling" amount so hang on for a technical expert.
Why do you feel that you were missold an IVA? Is someone telling you that? Surely you entered into the agreement of your own free will and at your own choice?
I would carefully consider whether bankruptcy is a sensible route for you when you are halfway through an IVA - but if the payments are becoming unaffordable why not have a chat with your IP to see if they could be reduced.
I have been told that I should not be in an IVA, should not have been put in one as I have no assets to "protect" and that I have a good claim against the company that advised me, to get back what I have paid. I have been told that a very small amount of what I pay goes to my creditors, the bulk goes to the company that administer my IVA, also, I have read that I would have to pay a minimum of £180 per month to be eligable for IVA, that is no longer possible, and WHY should my partner have to subsidise the payments, it is supposed to be based on what I can afford. With what I am being told and what I read on the internet and what the management company tell me I am now totally confused. I still am not sure how an IVA can be set up from the start on a "rolling increase" basis, when I asked about how I could afford to pay I was told to "cut down" on other expenditure like house keeping to afford the payments. If I opt now to go bankrupt, I am told that only lasts for 1 year now and at least I can get a life !!!
Hey v6daddy, you haven't perhaps had a letter from a company you have never heard of advising you that you have been mis-sold your IVA? There are companies that scour the insolvency register and send marketing letters out stating this, but what they really want you to do is go bankrupt and pay them over £1000 to do it for you. They actually don't know anything about you.
If you haven't had one of these letters then I apologise and ignore my post.
It definately sounds like it Viki - but if the poster is genuinely struggling to pay their payments, and payments were falsely staggered without any regard for how they could be increased simply to make an IVA "fit" then this does give cause for some concern.
If bankruptcy is more appealing, it is definately an option for you.
The basis of your IVA (which I know as a "ratchet" agreement) was quite commonplace a few years back and presumed a year on year improvement in your financial position. Often they would be used in trading IVAs where the proprietor of the business is entitled to show a bit of optimism (otherwise they would never go into business!).
There are 2 problems with these agreements :
1 The optimism shown often was excessive and by say year 3 the payments become unaffordable
2 Often increasing the payments in that way was the only way to get your proposal over some hurdle imposed by the creditors.
Given the timing to which you refer I would suspect your payment schedule got you past the "magic" 25p in the £ threshold?
Whether going bankrupt is a better option for you is a moot point. It depends upon a number of factors: what you do for a living is a prime example. Also bear in mind that you only have 2.5 years to go in the IVA. If you go bankrupt and you get an IPO/IPA whilst generally it will be less money each month it will be for 3 years. Also the blight on your credit file will expire in 3.5 years, whereas if you go bankrupt the 6 years will start again. A number of people on this forum have also gone bankrupt and contrary to what some would have you believe they don't think it's a walk in the park.
If I were you I would see if you can get the Supervisor to agree to propose a variation where your contributions are at an affordable level before you start to abandon the last 2.5 years.
Have you been mis-sold an IVA? difficult to say. 80% of my clients don't own their houses and would not lose their jobs if they went bankrupt. They do an IVA for a number of reasons mainly not measurable in monetary terms. Their feedback tells me that they don't believe I have mis-sold the IVA to them. If you feel you were mis-sold your IVA, your sole recourse would be to complain to the IPs regulator. Disciplinary action could follow but contrary to what some organisations would have you believe, there is no mechanism for you to get any money back. Besides, if you followed their advice and went bankrupt, the Supervisor would be obliged to hand any money in his possession to the Official Receiver and not you.
I would see if you can make the IVA work first.
Hope this helps
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd) www.pdhl.co.uk
I have had one such letter, and some calls by phone, but I have been reading on the internet as well, my payments started at £300, 1st year, are now £450, next year £500.00, and so on, and I still cant get an answer as to why my partner has to help, its not her debt. She puts 1/3 of her salery into the household expenses, I put the rest, then she has to help out again, its not right. An IVA to the best of my knowledge is payable on what I can afford, not what WE can afford.
Thankyou Ian, thats a bit more enlightening at least. And yes, I believe the 25p mark was mentioned. But if the payments are unmanageable now, they will be worse later, pay rises dont match the monthly increase each year, and why should my partner be forced to suffer.
I would say it will make sense to talk to your IP about your ability to contribute, outlining your concerns, before you throw the baby out with the bathwater.
Work out what you can actually afford. If you have complied through the first half of your IVA and you have a sensible alternative proposal, a variation may well be quite feasible.
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd) www.pdhl.co.uk
Hi Melanie, I not what you say about the payments being "falsly staggered" to make an IVA fit, and I am still of the opinion that this might well have been the case, especially in light of what Ian mentioned, the magic 25p in the pound as it was when I started my IVA. If my monthly payments were reduced to what I can afford, would the "distance" I have to go be prolonged ??
What a hideous practice - and one I can safely say I never signed up to. How on earth an IP could safely predict a year on year improvement beggars belief. You definately appear to be a candidate for a variation, and this should not necessarily mean an increase in duratin, but of course you are back in the laps of creditors again with regard to voting.
As Ian says - attempt to speak to the IP, or better still ask for a face to face meeting. I am sure that they will share your concerns once the work of "misselling" is hinted at, and it does no harm to see what advice they can now give you with regard to your concerns.
Melanie is absolutely right of course - many of these IVAs were unworkable simply as they were over-optimistic from the start. They did have their place, but in specific circumstances, such as where a business had been in the doldrums but was coming out the other side and there were reasonable grounds to believe there would be a period of sustained growth. Having said that there was a pretty high risk of failure. I can't see how they would ever work for an employee who would have much less control over the money coming in.
In your case, my money is on the creditors accepting a sensible variation if you have got half way through and the IVA is still running as they will want to see something still coming in. It will now be up to you to make an rather more informed choice on which way you now want to go.
Ian
Ian Millington
Insolvency Director
PDHL Ltd (formerly Personal Debt Helpline Ltd) www.pdhl.co.uk
