things may not be quite as straightforward

[kit]

Hi
I read the comments in the Forum with interest, and realise things may not be quite as straightforward as I thought.

My partner and I are 1 yr in to our IVA. We pay just over a thousand pounds a month into our IVA, which our Supervisor was very happy with and commented that our creditors 'obviously' would have had to accept a lower amount if we didn’t earn as much - this I think has given us a false sense of security. You see, I am currently going through a merge/restructure at work. We are in a 3 month public consultation period, and the likely outcomes are: nothing changes same wage etc, redundancy, keep job but drop to a lower band (£5,000 per annum pay drop), keep job either on current salary or lower salary but reduce hours slightly, go to a day job and lose shift allowance (again £5,000+ pay drop). The other main problem is that I will most likely end up living two hrs from work instead of literally two minutes, so obviously my travel expenses will increase dramatically, and one option for a few of us is to consider reducing our hours slightly so that we don’t have to work a 60+ hour week including the travelling time, though this also would obviously have an affect on my wage.

Because we thought we were in a good position with the amount we are paying, we thought it would be a simple case of finding out my new salary, informing our Supervisor and adjusting/reducing the payments we make accordingly which has reduced my stress levels compared to my colleagues no end – however, on looking at the comments on the website, it appears that we appear to have been very much mistaken.

At the time of deciding whether to go for an IVA or bankruptcy, we chose an IVA because we wanted to pay as much as the debt back as possible and were advised that if we went bankrupt our creditors would only get a few pence in the pound, but one year in to it, we really don't to have to consider this option if my salary reduces and the amount we pay into the IVA halves.

Another point to add, as seen in some other suggestions, if my salary does reduce, it is not an option to gain additional employment, as I will still probably often do eight shifts in a row as standard.

We are therefore left wondering what is going to happen and would appreciate any advise. I am also unwilling to contact our supervisor at the moment.

Thanks - very confused

[MelanieGiles]

Hi kit and a warm welcome to the forum

Your case highlights one of the clearly obvious factors about voluntary arrangements - no-one has the benefit of a crystal ball when they make their original proposals, and they do have to be capeable of change when circumstances dictate.

I feel that you are stressing yourself out about something which at the moment is relatively unimportant. You cannot control that consultation issue at work, it is out of your hands. All you can do is accept the eventual decision and move onwards. Although you are in an IVA, your other work colleagues will also have their own difficulties as well - some may have debts of their own, or super high mortgages which they may struggle to repay. So you are probably not alone, although I can understand why you feel so vulnerable.

Your IP, if they are worth their onions, will also understand that they didn't have their own crystal ball on the day of the creditors meeting either! When you know the outcome of your employment situation, and have worked out what the implications of that are in terms of reduced working hours or additional costs, you should present your revised financial picture to your Supervisor and seek his/her advice with regard to presenting a variation to the IVA terms. This should be based on a revised calculation of your disposable income, providing for lower but affordable contributions.

If you do not wish to discuss this with your own IP, please feel free to continue posting on the forum, but ensure you give us very specific facts about your case - such as the amount you originally owed creditors, the basis of your IP's remuneration, and whether you are property owners who are required to release equity during the final year of the IVAs.

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

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