Please advise!

[clare30]

I have held an IVA for the past three years. It was set up as 52p in the £ of £23834, (with no assets in the contract), and to date I have paid in £13782.The IVA was set up accounting for both mine and my partner's income, as mine alone was insufficient to qualify. All debts however were in my name alone, as is the contract.

I am currently expecting the imminent arrival of my first child, and so have commenced maternity leave, which has greatly decreased my earnings from two jobs, down to only one allowance of SMP pay.
From filling out my new income and expenditure form, our expendable income during maternity leave will be approx £170.

My questions are:
1) If the new expendable income whilst on mat. leave is less than £200 per month, are they likely to turn around and say I will just have to go bankrupt instead?
2) If they agree to continue monthly payments under £200 per month, and extend the term, if the expendable income once I am back at work part-time, (because I do not wish to return full time), does not increase at all after child care costs, can they actually insist I must go back full time to cover higher monthly repayments?
3) My partner has recently received a monetary gift from his parents, to help towards our new family situation, from some inheritance monies they received. He is willing to offer this money to me to be able to make an early settlement offer, but the most it will be is £5,500. Will this be a reasonable offer to make? (I worked it out that it will be approx 45p in £ payback then, after "handling fees") And if he offers to give me the money, can they turn around and say they will take that money and I'll still have to make monthly payments, as his income is all part of the workings of my monthly repayment arrangements anyway? (even though, I say again, the contract and debts are solely in my name, but I am unsure how much his money situation is tied to mine with respect of all this?)
Please advise!

[Adam Davies]

Hi
1]Your IP can not tell you to go bankrupt,they can call a variation meeting to propose your reduced payments and your creditors will either accept or not.If they do not accept and you fall into three months or more arrears then your IP can fail your IVA.At that point your creditors could ask your IP to petition for your bankruptcy.This seldom happens due to costs and given your circumstances both your IP and creditors should be sympathetic.I would think that they will agree to reduced payments with an extension to your IVA to compensate.
2]They[the creditors or IP] can't insist that you go back to work full time
3]The lump sum of 5.5k,in my opinion,will be accepted by your creditors and could well be the best way forward.You will need to state that the loan will come from your partner on the understanding that it will ONLY be made if used to conclude your IVA and that you will be using any disposible income to repay them.I believe that this will return close to the original dividend due to the saving on IP fees[I note that your IP fees seem very high at close to 40% realisation]
Regards

[clare30]

Hi Andy,
Thanks so much for the advice - is great to get abit of reassurance on the whole situation, and advice on course of action and what IP can and cannot do!
I agree that the fees do seem really (heart breakingly!) high! I was so keen to sign the agreement when they said it would be accepted as a better way to try and pay off my debts, that I guess I didn't really think too much about exactly how much of the cash I pay in would go to them! And also didn't think I should maybe compare with other companies?! To date they have taken £6086 in nominees fee, supervisors fee, office holder expenses and VAT. The original contract said total fees for 5 years would be £8086 (for nominee, supervisor and "other fees and disbursments, including VAT") If they agree to take this offer to the creditors they are going to charge a further £2350 (£500 meeting fee, £1500 early settlement fee and £350 VAT), taking the total costs they will have taken,(if I am correct), up to £8436 (£6086 plus £2350), which is higher than original contract qouted! Is this allowed because the original contract will be being altered due to early settlement, or should I query it?
I am going to make the offer of £5,500 to the company in respect of change of circumstances, now that I know how to present it! And keep my fingers crossed they will accept rather than face a further extended term!
I thank you once again, and would be interested to hear your views on the fees situation. Maybe it is something that those who are thinking of looking into IVA route should take much more consideration of than I did?!

[MelanieGiles]

There is absolutely no need for an early settlement fee - what firm are you using? But they will have to perform additional work for arranging a variation meeting for you, and it is therefore reasonable that they be paid for that - but this is of course at the discretion of your creditors.

I agree with Andy that the offer is a good one - and am sure that creditors will accept as they get their money a bit earlier and can close your accounts. As you have a new arrival on the way, what better start than to be free of your debts - and if I were your IP I would certainly be recommending it to creditors.

The very best of luck to you and your partner.

[clare30]

Well, that's interesting that they are trying to charge another £1500 for "settlement fee" that they are not really entitled to, looking at what you say!
It's so good to have discovered this site and get some independent advice like this instead of having to take everything they tell me on the chin as I don't know any better!!
The company I am with is "Debt Free Direct". What would you advise that I do? Do I challenge them about it, or will I jeopardise my chances of them putting forward my offer?! Can they legally claim it if they want? Obviously, if they are not getting that money, there is more to go to the creditors, which would surely help my case?
Look forward to hearing your views, and thanks for the interest and kind words!

[Adam Davies]

Hi
There is a template letter that you can use to inform your IP of your full and final offer
http://www.iva.co.uk/Letter10_F_and_F_o ... ng_IVA.asp

You can jig it around to fit your circumstances.
DFD high fee maybe reduced by your creditors so I wouldn't rock the boat just yet,it pays to have your IP behind you when proposing a full and final variation.
Good luck and keep us all posted
Regards

[clare30]

Thanks! I definately don't want the boat rocked! Thanks for the letter templates also. I shall keep you posted!

[MelanieGiles]

I accept the point about not rocking boats, but what do they actually do for this fee?

[clare30]

Hi Melanie and Andy,
Just wanted to let you know..... my full and final has finally been accepted, 2 days ago!! (£5,500) Took a while getting the meeting sorted, but what a weight off my mind! (Especially now am up to my armpits in a little lady's dirty nappies!! No time for anything else with a liitle one on the scene, hey?) So, thank you both for all your helpful advice, and for taking the time to reply to my query, it was much appreciated. Keep up the good work!
Clare.

[MelanieGiles]

That's brilliant news Clare and thank you so much for remembering us to share the information.

I don't envy you with the nappies, but I bet she is a real bundle of joy and now you have your lives ahead of you without the worrying burden of debt.

The very best of luck to all of you for the future.