www.iva.co.uk

I entered in an IVA in Dec 2004 making payments of £510 per month with the final payment
due to paid after 60 months (Jan 2010). However, in 2005 my job circumstances changed and my payments
were reduced to approx £375. At the time I was told that this would extend the duration of my
IVA. Early in 2006 my payment increased to £395 per month due to an increase in salary at the time.
I have been making these payments since then but have now been asked to increase my payment to £451 per
month. At the beginning of this year I enquired what my end date is and was told its Jan 2012.
By making higher payments allbeit something I'd prefer not to do as like everyone my outgoings have
increased in respect of untilities, travel to and from work etc.not mention supporting my family
I assumed my end date would be brought forward.
So I asked "by making increased payments I presume this will bring the end date forward?" this was the reply.
The increase in your monthly payments is due to you having additional surplus, unfortunately this will not
reduce the time of your arrangement. The IVA was set up that you only pay a percentage of your debt back,
therefore if additional money is available each month this is seen as a bonus to the creditors and paid in
addition to your monthly payments. It is not a permanent increase, when we review your budget again if
the money is not available we can retract the increase and resume payments at the original amount.
This really doesn't seem fair at all!! - I try to better myself and provide for my family - full time mum
and 2 daughters (6&3) and I certainly don't see having a surplus as being a bonus - I will now be in effect
approx,£100 lighter in my pocket going into the Christmas period.
Any advice would be most welcome, even if you just confirm what Payplan say I need to feel that I'm being
treated fairly.

Thanks

Steve

This does seem a bit harsh but the variation extending the IVA is in place and cannot be changed back without the consent of creditors. You could request a new variation asking creditors to accept closure of the IVA once the original dividend has been achieved. This may shorten the term a bit. Alternatively, if you are struggling and the term cannot be shortened you should request that your payments are reduced back down to the £375 and let the IVA run until 2012.

I am afraid I agree with your IP's stance on this particular point - and do not feel that another variation to reduce the timescale is worthwhile as it is unlikely to be accepted.

That works out at 7 years? I thought 6 years was the maximum? have things changed since 2004? probably being a bit thick!

Hi,

There is not a maximum time limit - I have heard of 10 year IVA's

I was under the impression that the very maximum term for an IVA was 5yrs but could be extended to 6yrs if that provision was set out in the contract at the time of inception. Please correct me if I'm wrong...

As per my comment above - they can go for longer but depends on the circumstances but the majority will finish in 5/6 years

So, if your payments end up being reduced because of a change in circumstances then does the IVA get extended by default? Or is this only when the IP has to go back to the creditors and they demand an extension to compensate?

I thought the IP has the discretion to reduce payments by up to 15% - in this situation does the term increase?

The IVA can only be extended with the agreement of creditors - this is not a discretionary power granted to the Supervisor.

in my variation meeting the payments were reduced by £170 per to £211. i was warned that creditors may ask for a extension, but luckily they didnt.