Shock horror is there anything we can do ?

[Gina.gu]

hello, thank you for this site maybe you can help. our iva started in 2008 at 750 jointly. my ip reduced my payments without a creditors meeting in 2009 to around 500 due to us having a baby and us both losing hours at work.
we lost our house due to this also in 2009
Recently due to my partners hours being reduced once again our ip tried to get the payments reduced further, but shock horror the creditors , of which only 2 voted, now want the original amount of 750 which we do not have.
can anyone tell me why the amount has not been put back to the amount the ip reduced it to for the past year approx 500 and why it has gone up to the original amount of 750 plus arrears as the creditors want back the 250 per month not paid over the year, when our budget clearly states we do not have it.

is there anything we can do? will another provider to able to reduce the payments?

thanks for any help

[Foggy]

Hello, and welcome. I am surprised your IP could agree such a reduction without a vaariation meeting -- so the creditors might feel he has overstepped the mark. It might be worth looking at whether what the creditors view as a shortfall could be addressed by extending the term of the IVA.

At this stage it would not be easy to change providers.

Hopefully one of our experts will be along shortly to give more knowledgeable advice.

[Broke of London]

Hello - IPs can usually reduce payments by up to 15% without consulting creditors. Was the reduction to 500 possibly a payment break for you while yu were on maternity leave? An iva is a compromise between what the creditors want and what you can afford to give and this can be very difficult when one side is firm in their demands. You should speak to your IP about the options open to you if you cannot afford to continue with the ivas and bear in mind you can split them and each have a separate solution if one can afford to continue their iva and the other cannot. It is very difficult to change iva providers so do work with your IP to hammer out a plan.

[Adam Davies]

Hi
Crazy that creditors reject this when you have no assets and can't afford the payments asked for.
Have you considered bankruptcy ?
Regards

[kallis3]

I agree with Andy. How silly of the creditors to be like this when you can't afford it.

I agree that bankruptcy could be a good solution now so that you can start again with a clean sheet and put all this behind you.

Speak to your IP first though.

[Broke of London]

It seems crazy doesn't it. Unfortunately for people struggling to keep their ivas going you can't say 'they'd get nothing in bankruptcy' anymore. I wonder whether BR returned a better dividend based on a three year IPA than continuing the iva at the lower payment when creditors did their sums. Would they be this mean spirited?

[kallis3]

They don't get as much in BR. My dividend is 31p in the pound as opposed to 13p in bankruptcy.

Things have changed slightly recently though as you have to pay across anything over £20 of your DI.

[Julie]

I don't think the creditors even consider the return in BR. Ours certainly would have gained a lot more had they reduced the IVA payments. Instead their greed forced the IVA to fail.

[Broke of London]

If you are a year or two from completion, the lower monthly BR payment may be more than offset by the extra time you spend in the IPA. Funny how BR payments are worked out...my proposal was 71p IVA and 7p BR! Oh, prob because no house!

[kallis3]

I do have a house with a fair amount of equity in it so can't understand why the BR dividend would be so low.

[Julie]

18 moths into the IVA,hubby asked for IVA payments to be reduced to just over £500 a month ( needed to lease a car so he could work) - refused by creditors. ..they got a lot, lot less in BR.

[Broke of London]

So stupid. Do they even consider that they are playing with people's lives when they make these arbitrary decisions? It seems so senseless when everyone loses out.

[kallis3]

I don't think they really care.

[Julie]

I agree Jan, they don't care. I lost so much sleep over the IVA failing, but then got angry that we were forced to go BR.

2years down the line and I still hate the fact the IVA failed.

[kallis3]

I remember your struggles well Julie.