Hello, advice needed please. Currently in an iva with stepchange. I live alone with one adult dependant and one child. Income is my salary, universal credit, child maintenance and adult dependant contribution. We are considering my partner moving in. He would contribute 50% toward the house related bills, rent, council tax utilities etc. Our incomes are roughly the same if I include all my avenues of income so this seems more than fair as I have two children. His contribution would be equal to what I would lose in universal credit so my income would remain the same. I contacted Stepchange to ask how this would affect my iva and their response has thrown me. It seems that his entire income would go on the i & e, and he would be expected to pay 50% of the total expenditure including all mine and my children’s personal expenses, I understand I can add his outgoings too but his are far less than mine as I have car loan, children’s expenses etc. They would then look at the total disposable income and this would also be split 50/50. His disposable is far higher than mine as my outgoings are more. So essentially he would not only be paying some of my personal expenses, he would also lose a fair amount of his disposable so I can pay it into the iva? He would also be restricted by the spending allowances I.e if his phone bill was over the allowance it wouldn’t be allowed, same for clothing etc. Am I understanding this correctly as this seems really unfair, I thought his income would count only so far as to make sure he is paying a fair share of house related bills and his disposable income is his own and not countable for the iva? I’m the one in the iva yet he would be restricted in his spending and have to use his disposable to increase my payments? Thanks in advance
Hmm .... Payplan, the other "charity" based IVA provider do this, which results in the solvent partner effectively repaying the insolvent partners debts, which flies right in the face of an IVA being 'Individual' ! To be honest I have not heard before that StepChange were doing this as well
Yes, most providers will only use the partners income figures to calculate their fair share of expenses, as you say.
Usually the cleanest way of moving a partner in is to treat it as a house share arrangement, with the partner having his or her own room on paper and a specified share of relevant expenses. However, when on benefits, this could cloud the issue and, in any event, StepChange are now aware that he is your partner as opposed to a lodger or housemate.
How long do you have left to run in your IVA ? Could you wait until then to move in together ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you for your reply, can I just say this forum has been invaluable to me in the last year. Every question I’ve had Ive been able to find answers to which was a great help during a very stressful time. I’m answer to your reply I would no longer be in receipt of benefits if he moved in as our combined income takes me over the threshold, I don’t have a spare room but yes had read that I should treat him as a lodger but too late now I’ve asked stepchange the question! There are four years left so don’t really want to wait that long, but also I can’t expect him to use his income to support mine or my children’s expenses let alone my iva payments especially as we weren’t together when i incurred the debt nor when I took out the iva. If this was the case I don’t think he would be willing to move in and I agree as it’s extremely unfair. He would be being financially penalised for my mistakes. I’m not sure he would be keen on having to provide all his financial details either as we keep our finances separate. If this is the case would a full and final be a better option? We have briefly discussed the possibility of him taking out a loan to pay off my iva so there would be no nasty surprises with regards to repayments.
A full and final is certainly worth considering, assuming, of course, that your creditors accept. Not only would it keep him at a distance from the IVA, it would also free you to get on with life with fewer complications and ongoing scrutiny into, what is, your private life.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Yes that was our thoughts too. In the event full and final is not an option, I have just found an email from stepchange from prior to my iva being accepted with creditors requested modifications as follows:
If any instances of co-habitation with the Debtor by any person aged 18 or over occur during the term of this Arrangement and where there is reasonable expectation that Board and Lodging should be paid, the contribution will be added into this Arrangement in full.
There is no mention of their disposable income being taken into consideration so could I use this to argue the point? I’m happy for his full contribution to be added to my i & e as it makes no difference to my overall income as I would lose the same amount in benefits.
Can I ask how much you are paying to the IVA at the moment? And how large the debts are?
Does your new partner also have a car, or would he be using yours? When does the car finance end?
Hi, I current pay £162 into iva, so around 8k left to pay. Car finance is £127 ends in July but there is a ballon payment to be made for which a provision that I would refinance was made in my iva. Yes my partner has a car we both drive to work.
Sat Nov 20, 2021 12:19 pmKatherineSW wrote:
Yes that was our thoughts too. In the event full and final is not an option, I have just found an email from stepchange from prior to my iva being accepted with creditors requested modifications as follows:
If any instances of co-habitation with the Debtor by any person aged 18 or over occur during the term of this Arrangement and where there is reasonable expectation that Board and Lodging should be paid, the contribution will be added into this Arrangement in full.
There is no mention of their disposable income being taken into consideration so could I use this to argue the point? I’m happy for his full contribution to be added to my i & e as it makes no difference to my overall income as I would lose the same amount in benefits.
I would certainly give it a go -- so, basically, his contribution towards rent and household expenses would be used to increase your IVA payment by that amount.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Yes that is how I read it, and the fact that my income would reduce by same amount due to loss of benefits should theoretically mean my payment remains the same.
Hi again, so I had a conversation with Stepchange today, and my understanding was correct, they would use the entire household income/disposable to work out my new payments. While they were helpful and sympathetic to my complaining it was unfair, those are the rules so that’s that. My partner would be considerably worse off and contributing to my debts. Not the best way to start living together so that idea is shelved for now. New plan is for him to pay off my iva with a full and final offer. I have 51 payments left at £162 so £8262. What would be a decent offer? I do have a car loan at £128 ending in July but also a provision to take out further finance to pay the balloon payment, so this wouldn't necessarily be available for the iva. Also worth mentioning I would lose over my child maintenance and most of my universal credit in two years so unless my circumstances changed dramatically for the better I would really struggle after that point. Any thoughts appreciated.
Disappointing --- those most certainly are NOT 'the rules', just the way Stepchange have decided to operate !
As for the F&F offer - most creditors will accept a lower amount to reflect savings in time and admin costs and I would normally consider an offer around £6k as worth putting forward, but StepChange might baulk at less than £8k although it is not their offer to put forward, but yours, their recommendation to creditors will carry a lot of weight.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I have to add that I would be inclined to make a formal complaint --- the IVA was drawn as an INDIVIDUAL arrangement, between you and your creditors --- no where do the terms agree to drawing in another party. The only difference your partner moving in, which are in accordance with the agreed terms, would be the increase in your disposable income, due to the sharing of certain expenses.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thank you Foggy. It really is soul destroying. Just when I thought things were going right it’s another hurdle and more stress and anxiety. I haven’t slept well and have felt constantly sick since finding out it isn’t as straightforward as I thought. It really does feel like my life will be on hold for four more years if I can’t sort it. I accept the financial restrictions on myself as they were of my own doing and getting the iva was such a relief after so much stress, but to feel like I can’t move forward in my personal life without other people suffering because of my iva is an awful feeling. As far as a formal complaint goes I really don’t want to rock the boat as I need stepchange on my side if I can put forward a full and final offer. I’m going to have a think about how much etc, but as I just want this over and done now I can’t live like this for another four years I’m thinking nearer the full amount would be best if I can. Can you advise on something else they told me - as my iva is under a year old it would need to go through the IP to decide if it can be put forward, and there is also a possibility it could be accepted without having to go to the creditors if stepchange think it’s a good enough offer? I may have that wrong I was so stressed when speaking to them i forget everything I wanted to ask. Is there a standard procedure/timeline for full and final offers?
As regards a full and final, it is your offer to be put forward and Stepchange should do that. However it does have to go to the creditors. It is them who will decide whether to accept or not, the same as with your original proposal.
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