Substantial Pay Drop

[colin178]

Hi All, im new to the forum, im Colin from Lancashire. I am just over 12 months into my IVA (joint with wife).

Our joint monthly payment is £420 repaying a debt of £28000, we rely on my income alone as my wife is a stay at home mum.

When we first started paying the IVA i was earning a shift premium at work (this was not guaranteed). It looks as though in the new year i will be losing this premium, effectively knocking my wage down by £450 per month.

I am really worried because the drop in wage is more than our monthly IVA payment! I havent spoken to my IP yet. Do you think the creditors will agree to drop the repayment figure significantly or do you think bankrupcy is looming?

Any thoughts or advice would be gratefully received. Thanks.

[hubert]

Hi and welcome to the forum!

When you proposed your IVA, did your IP know the shift premium wasn't guaranteed?

In my case all overtime, bonuses etc... were ignored for the proposal. Only guaranteed income was taken into account.

If you can see this coming I'd definitely talk to your IP now and let them know because the sooner they know the better chance they have of handling it smoothly.

[Foggy]

As Hubert says, normally an IVA should be based on the guaranteed regular income, as any different could be heading for disaster!

Speak to your IP and see what they suggest. However, if the loss wipes out your disposable income, the IVA might become unviable.

Do you own your home, or rent ? If you rent, BR might not be so bad an alternative, certainly worth keeping in the equation for now.

[colin178]

Thanks very much for the replies. Yes the IP was fully aware of this when we applied. Our initial figure was £300 and rose to £420 as a final figure before the creditors meeting.

We own our own home with a mortgage. If the creditors agree to drop the figure by half then we should be able to manage, but other options are bankrupcy or selling our home and offering a full and final settlement with the equity release (approx 17k).

What are your thoughts on this??

[luluj]

If it were me I think I would look to sell and pay off iva with the equity as a full and final and move into rented to avoid bankruptcy ..... but that is just my opinion.

[Michael Peoples]

Creditors rarely demand a house sale and if you can afford the mortgage I think a reduction in payments is a reasonable offer. Let your IP know of the potential problem and they can then call a variation when it happens.