contingent debt

[james_7]

Hi all
when i took my iva out in sept 05 i had monthly contributions to make of £293 per month, also my partner was allowed an allowance of £50 per month. in my iva i put my overdraft with barclays into this £2378 but this was a joint account so it was classed at a contingent debt. which i had to pay £50 per month . my iva contibutions are worked out to be months 1-55 £293 and months 55-60 it would increase to £343 in respect of partners allowance ceasing,i did not fully understand what a contingent debt was but arranged with barclays to take £50 per month for 55 months until the barclays debt was paid back. barclays sold the debt to max recovery and they never took no money so i immediately started paying £343 into my iva and have been since. i have since been advised that i should of kept the £50 per month to one side so when max recovery come for it i have it. i have paid it into my iva . i have just had a pay rise at work and informed my ip its about £150 per month extra after tax and ni. what i am asking is and have asked my ip is due to the fact i paid the £50 a month into iva will they let me start keepimg £100 a month of my pay rise to get the contingent debt back together. also my propasal states i get to keep 50% of all income revenue and income increses is this the same for pay rises. im sorry i going on i bit i just confused please help james

[Adam Davies]

Hi
It seems a reasonable request to ask your IP to leave you the extra £50 for Max recovery because you have afterall overpaid your IVA by this amount each month.Your proposal sounds as if you can keep 50 percent of all payrises so on the £150 rise that you have just had you can keep £75 plus the £50 that you have already overpaid so it should just be £25 extra to be paid into your IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

I find this all quite odd. If you were jointly liable for this debt, it should have been properly included within the IVA and no ongoing payments made by you towards it, although your partner would have then been responsible for the payments under joint and several liability. The debt was not contingent at all - and should have crystallised at the date of your creditors meeting.

I also do not understand what this partners allowance of £50 was for. Can you explain more about the logic of this payment please. As this debt has been assigned to Max Recovery, then I assume that the overdraft is not being used any more, so again do not understand why this debt has been treated in such manner, which has left you in a real muddle.

Isn't the sensible option here to ask your IP to refund the monies you have overpaid, and get those paid to Max?

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

[james_7]

hi melanie and thankyou both for your replies very much appriciated.
the story gets much more complicated, the iva is in my own name and i have since split with my wife so i stuck to pay debt but still thats life. Barclays account with overdraft has been closed and max recovery are going through my ip. my partners allowance i beleive was allowed so she could pay the contingent debt , i did keep questioning the contingent debt when i took my iva out but they said just pay £50 per month. i am well confused on contingent debt it might just be me being thick but still. or would it be that as i have paid the money to my iva and continue to do so my ip could sort this out?
thanks again for you time to date
james

[MelanieGiles]

James

I think it is down to your IP to sort this out, as they put together this rather strange deal at the time. I don't think that you have anything to worry about - common sense as ever will prevail!

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