Dear Panel,
I am 10 months into my IVA (which I expect to last 6 years in total) and I am pregnant. This means I will be on a short maternity leave in early 2016 and will have significantly reduced pay for 3 months (50% my usual pay.)
My initial thought was to apply for an IVA break and/or mortgage break for 3 months. BUT I am now thinking that I'd rather NOT do either. I have found out that mortgage break may go down as being in arrears on my mortgage in addition to adding time to the end of my mortgage (even if approved which is unlikely.)
I am even MORE reluctant to ask for an IVA break as I am only 10 months into a 6 year commitment. The thought of extending my repayments even longer to account for a 'break' is not something I want to consider.
It then occurred to me that the IVA repayments are calculated on 'surplus income' each month. So my question is this, IF MY INCOME IS SO LOW FOR A 3 MONTH PERIOD (due to a short maternity leave) THAT THERE IS NO SURPLUS TO GO TOWARDS THE IVA THEN WHAT WILL HAPPEN? Will the creditors just have to accept a very minimum repayment for this period until I return to work?
Or will the IVA fail, forcing bankruptcy?
It would seem pointless for my creditors to fail my IVA just because of a 3 month reduced income, which is temporary and for a known time period. Nobody wins in my IVA fails, but if my creditors could see that I literally don't have enough income to pay into the IVA for 3 months due to reduced income, then by April I will be back at work and all will return to normal!
Please could you advise where I stand on this issue as I cannot be alone. I am 43 and so this issue will not reoccur during the remainder of my IVA!
Many thanks. I look forward to your expert advice very much.
A lot will depend on how willing the IVA company is to work with you on this.
Basically if there is no surplus you will be asking for a payment break.
No-one wants to see their IVA extended but unless you can introduce a third party lump sum to close the IVA an extension is what you are faced with.
Goo luck with the pregnancy and I hope you find an answer that you can live with re. the IVA.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
The only realistic option here is a break. Failure to make payments in full for three months will see the IVA fail. This is not a choice, but is written into the contract by which all parties are bound.
Yes, an IVA is governed by the amount you can afford to repay, which has now been built into the contract and can only be amended under those terms. Dropping below a certain level, which would make the IVA unviable, would see the arrangement fail.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
