Hi, I am only four months into an IVA which has been set up with my wife. Our monthly IVA payment is £900 a month and I have just found out that due to current economic situation I am likely to be made redundant in the next couple of months. I would be entitled to 2 weeks redundancy pay plus 4 weeks notice. At present our income is £3200 per month but without my salary would drop to nearer £1100 per month. Any advice on what will happen to our IVA would be really appreciated.
You will have to speak to your IP and inform them of the circumstanes, as you will not be able to keep up the payments as they are once you have been made redundant.
They may allow you to take a payment holiday to allow you to look for further employment.
I imagine that the money you will then have coming in will be used to pay your priority debts.
If you cannot keep up the payments, and your creditors will not agree to a large drop, I imagine your IVA will fail and you will have to look at either a DMP or bankruptcy.
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
Hey havanaman, welcome to the forum. I'm sorry about the redundancy, let's hope it doesn't come to that. If it does then your IP will give you a payment break whilst you look for work. Do you think you have a chance at getting a job in your field quite quickly?
Thanks for your help, glad I found this. I have already been onto a few agencies for other work just incase it comes to the worst but the chances of getting a similar type of work/pay in the North West were I live are quite slim. I could find employment in the South East which I am more than willing to do but would then have to pay for somewhere to stay during the week and am worrying I couldnt afford that plus pay my family home.
Your priorities have got to be finding work, your family and home and the IVA last. As Kallis has said, if you can not afford the IVA then there is a debt management plan or bankruptcy. Don't think the worse just yet but be prepared and keep your IP informed. Good luck and I really hope it works out for you. X
Last edited by Viki.W on Mon Sep 22, 2008 4:57 pm, edited 1 time in total.
Debt management is an informal agreement between you and your creditors in which you agree to make lesser payments than you should. You will pay back all of your debt, but it will take much longer and there is no guarantee that creditors will freeze interest or stop charges.
Bankruptcy means that you will be declared bankrupt by a court, you may lose your house if you own it (but that is not 100% certain), but all debts are included and you are usually discharged in 12 months. If you have over £100 disposable income after your normal bills have been paid, you may have to pay money across to the Official Receiver for up to 3 years.
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
Freeman Jones, and I have requested a meeting with them to discuss what my options would be. When I took out the IVA they didnt really go through the debt management or bankruptcy fully.
They should have explained them to you but never mind. Listen Havanaman, don't panic yet. You haven't been made redundant and if you are, you may get another job with similar pay in the north west. Your payments could be reduced slightly. Cross that bridge when you come to it. Your IP will NOT want your IVA to fail so will help you as much as they can. It's good that you have a meeting with them. Please keep in touch with the forum and let us know how it all goes. X
As the other posters have already stated, it is essential that you keep your IP informed and they ought to be pretty supportive in the short term whilst you look for another job. Putting food on the table and keeping a roof over your head is far more important than having a few debts, so try to concentrate on that for now and what will be will be with regard to the IVA. Your creditors will understand, as a lot of people are in your situation at the moment.
My policy for dealing with clients who are about to or have been made redundant will be to ask for a 12 months payment holiday. In today's economic climate, this would not appear to be unreasonable, and gives sufficient time for rehabilitationg back into the workplace hopefully when things do eventually improve.
