www.iva.co.uk

we have an IVA but now the company has doubled our monthly repayment because we have paid a hire purchase loan up, we thought that we would be allowed to keep at least some of the money we would have been saving as the iva dosent seem to take into account the rising cost of living such as increases in rent, council tax, gas electric etc. will the money we are now having to pay actually shorten the term on the iva or is it just profit for the company? If your repayments increase, does it come off the total debt owed and reduce the iva term? we are confused and not very happy. So much so that we are actually considering bankruptcy even though we work we dont know what to do.Could we transfer the iva to another company who may just have our interests at heart? hope you can help.

Hi cazza and welcome to the forum

It is usual for increased payments when a hire-purchase agreement has expired to be already provided for within the IVA proposals. Did this happen in your case? Even if it did not it is perfectly reasonable for your IP to request all of the money, as he is responsible to your creditors to ensure a maximum return.

The additional monies will neither shorten the term of the IVA or "just profit for the company". (I actually do not understand your latter comment!). If you are incurring additional expenditure, I am suprised that this has not been mentioned to your IP at the annual review stage - but you should most certainly bring this to their attention now as allowance should be made for increases which can be justified.

The spirit of entering into an IVA with your creditors is that you repay as much as you possibly can afford over a set period. I think that it is sad that you are considering bankruptcy as an alternative, when you already have the privilage of IVA proceedings in place, and do beware that a Trustee in bankruptcy is also going to scrutinise your income and expenditure when deciding upon the level of payments you will make under an Income Payments Order for the next three years.

My advice is to take the increase on the chin and look forward to that last payment when you will be finally free from these debts.

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

Hi Melanie
Thank you for your advice regarding increases to my iva. I at last understand now, my practitioners are not good at explaining these things and so I was rightly concerned about the doubling of my repayments. I can just about afford this increase but as you mentioned, it does not allow for contingencies so if my husbands car breaks down, basically he cannot get to work which is 50 miles away which isnt really fair but theres not a lot we can do about that, maybe things will change eventually and these instances can be allowed for within reason. Keep up the good work and thank you again.
Regards
Carol

Cazza
Your case highlights the need for IPs to ensure that you fully understand the workings of your IVA.They should have explained to you that once your HP has finished the money that you were paying for it is added to your IVA payments for the remainder of the IVA.
If your rent etc has increased by more than your cost of living payrise at work then you should be able to off set this against the extra amount that you are required to pay since the end of your HP.
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

Cazza

Don't continue to struggle and not make allowances for car maintenance or other contingencies. Your IP can always put a variation to the original terms forward for you, based upon a lowering of payments if you are genuinely having difficulty in making the payments.

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

Hi Cazza

I understand your concerns and both Mel and Andy are very experienced in helping others in our situation have a greater understanding of what is required under an IVA. I agree with Andy that IP's should ensure that we are aware of how an IVA works and there should be no "surprises". Although I did not have an HP arrangement, I had a mobile phone which contract was going to end and the monthly payment to the phone company has been added to my monthly payment to my creditors. This is not to "shorten the term", its as Mel explained, giving the creditors the best return.

Being in an IVA is a struggle, I know, but I am looking forward to my very last payment when I know that I will be debt free and able to live my life again knowing that I did the very best that I could to clear the debts. Every one of us on this forum who are in an IVA have had the same concerns as you - you are not alone. Keep posting on this forum - we all support one another and we will support you.

Take care

Sue

cazza I cetainly wouldn't give up on the IVA as your annual review will no doubt allow you to accommodate the increases in your living costs. Your IP is there to act as an honest broker to get the best return for your creditors whilst getting you a degree of debt write off in a set period of time. There are people on here desperate to be in an IVA so it would be a pity to leave yours.