My husband is on the second year of his IVA. We got in to a situation now that he got a better job and me too so we voluntary increased his monthly repayments to match 1 pound for each pound of his debt, including the IVA practitioner's fee.
Even doing that we have still left some money spare at the end of the month, so we can start saving to apply for a mortgage in the next 4 years, when my husband will be IVA free and name clear.
Our doubt is, can the IVA practitioner FORCE us to clear the debt earlier than the 5 years period or if we are paying the pound for the pound already they cannot force us to repay that in less than 5 years?
Not sure I fully understand the pound for pound of debt payment..
It is somewhat dependent on what your specific IVA paperwork says about wage increases, what usually happens is the IP will allow you to keep the first 10% of any increase then take 50% of the balance to pay into the IVA. If this means you will pay 100% of the original debt and the IP fees (and possible statutory interest) within the 5 year period then it will all draw to a conclusion within the 5 years. Otherwise the IVA will continue for the full 5 years.
I am not aware of any instances where the IP had demanded the IVA be drawn to an earlier conclusion..
Paying pound to pound means, when my husband stated his IVA he was paying 0.46p for the pound, or, off a debt of £21k (including the IP fees) if he only could afford to pay 0.46p for the pound over the 5 years he would have paid 46% of his total debt. His monthly installments was £200 when he started the IVA because thats what we could afford to pay. Then we increased to £230 one year after when we got a better situation and then in the last 6 months we are paying £300 monthly. We just voluntary increased the monthly repayment now to £461 because according to my calculations (I work for a collections department in a Financial company so I deal with customers on DMA or IVAs too) if we pay £461 monthly for the next 38 months (till the birthday that he will complete 5 years paying for his IVA) we would have paid 100% of his initial debt of £21k.
My question is, even paying £461 per month to the IVA, we still have spare money at the end of the month, and paying £461 per month for the next 38 months would pay off 100% of his debit that was agreed to be paid in 5 years period when he signed for the IVA.
What I am in doubt is if his IP will say, look you are paying £461 monthly but we want you to pay £800 and finish the IVA in lets say 19 months instead of 38. (Before the 5 years period) or even pay that for the rest of the 38 months, paying more than £21K at the end of 5 years period, and paying more than was agreed on his IVA contract.
So the the initial question, can your IP force you to pay your IVA off earlier than 5 years or force you to pay more than the delinquent debit as per contract, even if you are already paying monthly the pound for the pound of your total debt?
You will always owe the full amount to your creditors until your IVA completes. If he earns more money then he will be expected to pay more across. If the 100p in the pound plus fees happens before the end of the five years then it will finish earlier.
Hi. The IP cannot force you to pay more than your net disposable income. If, as you say, you still have surplus income after the voluntary increases you have been making then, I imagine, at review, the IP will formallu increase your payments to match your DI, so, more than you are paying now.
The effect of this could be to end your IVA early, once the delinquent debt has been paid, plus the IP's fees.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Foggy is correct, you can't really 'choose' what you want to pay in an IVA as you always pay over your disposable income but normally at each review your IP will review your I&E and if you need to uplift your payments in a protocol compliant IVA you will only pay across 50% of any payrise. I guess if you voluntarily want to pay more you can, but if as you say you still have disposable income currently, then yes your IP will expect this to be included to increase your payments further if you don't have any increase in expenditure to offset it.
If this means you end up paying off the whole debt plus fees earlier than 5 years then the IVA will finish early, you won't be able to just reduce what you pay across to keep the IVA running for the full 5 years if your income has increased so much
You will pay the full amount demanded by your IP in line with the terms of the IVA. If this means the IVA can be cleared earlier than over the five years, this has to be a bonus.
Thank you for the clarification and prompt answers. Another question I have is, my husband sent his Income and Expenditure forms and all the paperwork for the yearly review in June, and it was confirmed by the IP (after we called them) that they have received the paperwork and would get in touch as soon as they went thru it. Is that just me thinking that over 2 months to check paperwork, I&E form and accept our proposal of increasing the monthly repayments is way TOO long or is that a normal practice? My husband is not very worried as if he can pay less he thinks is better, but I think that their apathy is way too much, they should send us letter or email to keep us informed or a phone call would be welcome too. As on the digital era we are used to emails, my husband used to send his questions thru email but he been told to send all inquiry thru post instead, what I think is very weird and old fashioned. Is that a normal practice for IPs to refuse to disclose information or clarify questions thru email? I feel that the service we are paying for is not being delivered with the standard I wish it would. I would love to have an yearly statements from my husbands IP stating what month he paid so far and how much he paid in each month, and from that payment what was disbursed in percentage for each creditor. Am I being very very picky and extremely organised or is my husbands IP slacking on his duties?
Hi Liana -- I have, so far, only had one review. This took about 6 weeks (over Christmas) and I was given a complete breakdown such as you describe, and would expect nothing less.
Who, might I ask, are you with ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
My last revue took ages and we had to chase to get it.
We just got a letter saying the I&E was ok, the chairmans report did give a bit more detail which we checked and found some errors and we are waiting for them to be cleared up at the moment.
What I have said before is to read all the paperwork clearly and check their figures as they do make mistakes........
I've said that to my husband already. Unfortunately it is not MY IVA so I cannot call them on my husbands behalf as they refuse to discuss anything about his account (been sending emails to them myself in answer to emails my husband received from them and forwarded to me in the past) and my husband been told by them in the occasion they could not answer my questions as the IVA is not on my name and due to DPA they cannot disclose any information of his IVA to me - this at the start of his IVA - we (me and the IVA company) had a big fight back in time as after that I refused to disclose any of my personal information to them like copy of my payslips or bank statements, as they want to see my info because I'm married to the IVA holder so I count as the income for the household, but when I want to discuss my husbands IVA they refuse to disclose info. I am a professional debt collector so chasing people is one of the things I do best. I would chase them with pleasure until I get my answers but unfortunately I cannot do that.
Surely if your husband gives his authority to them to converse with you then you would be able to contact them
My husband had his contributions almost doubled due to more disposable income, we thought it was tough but then he had the good news that his IVA completed 2 years early. So maybe ths is going to be a possibility for you also.
Another question I have is, my husband sent his Income and Expenditure forms and all the paperwork for the yearly review in June, and it was confirmed by the IP (after we called them) that they have received the paperwork and would get in touch as soon as they went thru it. Is that just me thinking that over 2 months to check paperwork, I&E form and accept our proposal of increasing the monthly repayments is way TOO long or is that a normal practice? My husband is not very worried as if he can pay less he thinks is better, but I think that their apathy is way too much, they should send us letter or email to keep us informed or a phone call would be welcome too. As on the digital era we are used to emails, my husband used to send his questions thru email but he been told to send all inquiry thru post instead, what I think is very weird and old fashioned. Is that a normal practice for IPs to refuse to disclose information or clarify questions thru email? I feel that the service we are paying for is not being delivered with the standard I wish it would. I would love to have an yearly statements from my husbands IP stating what month he paid so far and how much he paid in each month, and from that payment what was disbursed in percentage for each creditor. Am I being very very picky and extremely organised or is my husbands IP slacking on his duties?
