my IP wants child benefit and child tax credit

[julie dobson]

I have recently had a baby, and my IP wants the monies that the government give me ie child benefit and child tax credit. This barely covers the basic costs each month of feeding my baby etc, they are only willing to allow me £80.00 a month for my baby, her costs are approx £150.00 for milk, nappies etc. Can they take these monies, and surely they must allow me a sufficient amount of monies for her basic needs. Also I'm on maternity leave, and I have to make reduced payments, but my IP won't put forward a revision for this, and says I will have to pay back all of the arrears that accumulates. Is this true?

[MelanieGiles]

Hi jsd

I am afraid that these monies do form part of your income, so they need to be included within your disposable income, although the additional costs you are now incurring will also need to be taken into account - and I imagine that they are higher than the benefits you are receiving.

I am suprised that your IP is not reviewing your situation in light of your change of circumstances, as presumably you made him aware of the situation when you fell pregnant. Your IP must consider proposing a variation to the arrangement for you, so you should go through your finances and work out what your disposable income is now and how that will change if you decide to return to work.

Who is your IP firm, and how much are your monthly payments to the IVA? What is the current level of your arrears?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[julie dobson]

Hi jsd

I am afraid that these monies do form part of your income, so they need to be included within your disposable income, although the additional costs you are now incurring will also need to be taken into account - and I imagine that they are higher than the benefits you are receiving.

I am suprised that your IP is not reviewing your situation in light of your change of circumstances, as presumably you made him aware of the situation when you fell pregnant. Your IP must consider proposing a variation to the arrangement for you, so you should go through your finances and work out what your disposable income is now and how that will change if you decide to return to work.

Who is your IP firm, and how much are your monthly payments to the IVA? What is the current level of your arrears?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

My IP is Haines Watts and I was paying £673.00 a month. My current level of arrears is £2,500 with a possible further £2,500. These arrears include my maternity pay and the initial expenses for a new baby. My IP is saying that I have to repay all of this and will not be allowed any monies for the initial cost of my child.

[MelanieGiles]

Julie

You definately need to get your IP to propose a variation to the original proposal for you. That is your right as a debtor, and he has no right to tell you no - unless there are modifications which restrict the proposal of a variation within the first 24 months of your proposal. Can you check this out by reading your IVA proposal and Chairman's report.

How much do you think that you can afford to pay now, and what are your plans when your maternity period ends. Are you going back to work? If so, what will be the cost of ongoing childcare? Try and work out a figure you can afford to pay now, as well as a revised figure for when you return to work (if you are going to). When you have this available, you should write to your IP formally and request that he puts a variation forward for you based upon the revised monthly amount.

Whilst considering all of this, and mindful of your change of circumstances, have you considered whether bankruptcy is now a more viable option for you?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[julie dobson]

Julie

You definately need to get your IP to propose a variation to the original proposal for you. That is your right as a debtor, and he has no right to tell you no - unless there are modifications which restrict the proposal of a variation within the first 24 months of your proposal. Can you check this out by reading your IVA proposal and Chairman's report.

How much do you think that you can afford to pay now, and what are your plans when your maternity period ends. Are you going back to work? If so, what will be the cost of ongoing childcare? Try and work out a figure you can afford to pay now, as well as a revised figure for when you return to work (if you are going to). When you have this available, you should write to your IP formally and request that he puts a variation forward for you based upon the revised monthly amount.

Whilst considering all of this, and mindful of your change of circumstances, have you considered whether bankruptcy is now a more viable option for you?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

I am planning to go back to work in September and my childcare costs will only be in the region of £80.00 a month as my husband works shifts. Yes we are considering bankruptcy, the issue with this is that I will not be able to continue in my current job I work for a finance house and have authorisation of monies upto £1 mil. The argument is that if we do file for bankruptcy is that I will not be working so our ability to pay over any further monies to our creditors will be impaired and based on our current expenditure a some of £100.00 a month is a realistic sum. I have argued this with the IP but he doesn't seem interested in the fact that the creditors will seriously loose out if we do this. He is convinced that our IVA will fail if he puts forward a revision based on our current circumanstances even though I am returning to work in September.

Could you also explain to me what the chances are that we will have to continue paying a monthly amount, if we do file for bankruptcy. We have no assets and are living in rented accommodation, the only item we have is a car which is worth approx £1,500 but my husband has to have this to get to work some 20 miles away. We have 2 and a half years left with our IVA arrangement. I think that we should file for bankruptcy as this is in our best interests but my husband doesn't, I think he is frightened that we will be asked to repay more that we can afford, and that we will not be able to obtain a bank account afterwards.

[MelanieGiles]

What I would do in these circumstances is ask your creditors for a payment holiday until you return to work, together with forgiveness for the current level of arrears on the basis of your circumstances. I have successfully done this on many occasions, but the key point here you must bottom out is whether you are able to propose a variation. Sort that one out first by re-reading your IVA proposal and Chairman's report, and confirm the position to me, and I can then give you proper advice.

As you have been in your IVA for 2 and a half years, I feel certain that you can propose a suitable variation - this may mean you have to extend the term of the IVA - and you have to insist that your IP puts this forward. Are you speaking to the actual IP directly?

I do not think that you need to concern yourself too much about the ramifications of bankruptcy just now, so let's part that one for a moment and concentrate on getting the IP to see sense.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[neverending]

Melanie
Isn,t it sad and wrong that Julie has to find help on this forum rather than from her own IP.An IP has a duty of care for both the debtor and creditor.
Makes me wonder that because she has paid in about 17k and the best part of her IP fees have been covered that she is not getting their best attention anymore ??

[julie dobson]

I've looked at my paperwork and there isn't anything in it to indicate that I cannot apply for a revision. Just to update you we did apply for a revision after one year, as I have Ulcerative Colitis and was unable to continue working the hours I was at that time, they agreed to a reduction in payments from £850.00 to £673.00. The following modifications apply to the standard wording of an IVA

1. Any additional income from me has to be paid over in it's entirety.

2. If additional income has been received but not paid into the arrangement as above, the Supervisor must immediately issue a certificate of non compliance.

3. Full review of income and expenditure annually.

4. My husband must pay 50% of his additional income into the arrangement.

5. Contributions cannot be lowered without 75% of the vote.

6. Contributions will be made for a period of 60 months, unless an early conclusion is agreed by creditors.

7. Funds need not be retained for the petition of bankruptcy.

8. Should contributions become 3 months in arrears, the arrangement will be deemed as in default, the supervisor will immediately issue a certifite of non compliance unless he believes a further creditors meeting should be held. Any such meeting should be conveneed within a further 60 days

I have spoken to my IP and he states that he will look at a review in September once I go back to work. And that I need to provide my wage slips whilst on maternity leave so he can ascertain how much I can pay into the arrangement. Do you think it is wise to wait until September for a revision to creditors, when we have accumulated all of our arrears, or file a revision now?

[MelanieGiles]

No - beacuse you will just incur more arrears. Get the IP to do a variation now on the basis of minimal or no payments until you return to work, with payments increasing to an affordable level from September onwards.

It is too long to wait until September to address this issue. You now need to do two sets of figures - your income and expenditure now, and what it is likely to be when you return to work. Forward these to the IP now, tell him you are concerned about the arrears, and that you are instructing him to put the variation forward now.

In accordance with your point 8 above, he has a duty to do that otherwise the arrangement will fail and you will have grounds for complaint.

I agree with you Neverending, and am glad that we are able to help people who may not be getting the best service from their Supervisors.

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

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