Increase in cost of living

[BlueShoes]

Hi

Long time no post.....9 months into our IVA, all going well so far!

Our expenditure has increased as I suspect has many people's (childcare, food, diesel, school meals, gas, electric, mortgage, council tax etc...) and without exception every increase is above the rate of inflation!

At our first annual review, what evidence would we need to prove all these increases? (Receipts? Bank Statements? Utility Bills?) And will they be acceptable?

Is it also possible to review original allowances? For instance, we were allowed £50 a month for car maintenance, but i have already spent £850 and have another big service due.(needed tyres, brake discs, brake pads, full service etc) (High mileage car for work/family) Is it possible to renegotiate the original figures? Or are you expected to juggle monies to pay for things?

I am interested to hear how other people have got on with their first reviews, so that I know what to expect. We obviously want the IVA to continue to succeed, but do worry about how tight(impossible?) margins will become if we are unable to update figures.

(We have also just discovered that we are in negative equity.. a neighboring house has sold for £10,000 less than what we owe on ours! Ho hum!)

Regards
Blue

[louisa.s]

Hi Blue,

Our first review was last June/July (about 14 months in) and we had to send in payslips and proof of any sizeable increases in our I&E (ie my car insurance had gone up from £50 to £95 due to an accident that wasn't my fault)and our revised I&E. But any smallish increaes of say £0 -£10 did not need proof. We were fortunate that because our those increases we did not have to increase our monthly contributions. For the record we are with GT and did not have to submit any bank statements.

We were then lucky enough to have a substantial payrise at the beginning of this year and we resubmitted our I&E to take into account the payrise but also the changes to our I&E as we needed to add several things and increase various others. This was accepted and we voluntarily increased our contributions by £20 per month.

We have our second review coming up this April time ish and I suspect there will be samllish increases in our fuel, energy etc.

I think perhaps you might be able to increase your car maintenance but be prepared to submit evidence if they ask for it (this might be just submitting receipts for work done and a list of work that needs to be done.

As long as your increases/changes are reasonable and not excessive then there is no reason why they would not be accepted. your IVA provider will not seek to increase your monthly contribution if there is no room for you to do so!

Glad all is going well so far for you though!

Lou

[MelanieGiles]

The standards vary from IP to IP, but for my part I tend to trust what my clients tell me. If there is an unusual increase, we may ask for supportive documentation, but this is actually quite rare as the majority of my clients are very committed to their IVAs and are completely honest and trustworthy.

Can't believe you have paid for 9 months already, Blue!

[jpj]

My first review was a nightmare...I put down all my costs,sent it off,and they sent me it back saying i had to fill it in based on my initial budget from the first year.
I told them they couldnt expect my life not to alter in the next 4 years and ended up having to show all the higher bills,mortgage payments etc...they couldnt believe how much my living expenses had gone up (hello...welcome to rip off britain!! )

[Rachael24]

Make sure you update us when they reply...Good luck!

[jpj]

Its all very well IPs saying we have to have monthly payments that step up each year....but with life as it is at present,with bills well above pay rises, payments should be stepping DOWN each year not up!!

[MelanieGiles]

Agreed - and there is now provision in a lot of IVA agreements to reduce payments by up to 15% if clients can demonstrate that they are genuinely struggling.

[jpj]

But surely with minimum P in the £ set figures it just means the IVA would have to run longer? meaning all these big increases in the cost of living affect the debtor but not the creditor?

[MelanieGiles]

Most creditors have now removed the requirement to meet a minimum dividend, and with all of the nonsense flying around about fee calculations for the first time in 15 years I am no longer suggesting that my clients guarantee their dividends either. Strange times - and all in the interests of returning more to creditors?!

[olympic_torch]

Melanie
Do any of these new guidelines or proposals have any 'teeth' in respect of current IVA's?.
The whole area seems to be in a state of flux at the moment.