www.iva.co.uk

Hi all,
I have been reading this forum for some time and have gained some valuable info but can't seem to find the answer to this one anywhere ???

I have been in an IVA since June 2009 paying £270 per month. On my last I+E review it was clear that parts of my expenditure had increased and my disposable income had reduced to £175. My IP suggested that I go for a variation but this has not happened yet due to me being able to complete enough overtime to cover the difference.

I currently reside with a female friend who has two children and claims single persons tax credit as we were not in a relationship, I also pay 50% of the rent + household bills. My IP and creditors were fully aware of this situation whilst completing and approving my IVA application.

The situation is changing and our friendship has moved into a relationship. Ironically enough, today she received a letter from HMRC asking if her claim for single persons tax credit was correct and also how they investigate 1000's of claims per year. She has naturally gone into panic mode and is going to advise them of her relationship and new status.

Unfortunately this will leave us with some financial problems, just accounting for basics we would be £160 short every month.
Before I contact My IP can anyone give me some sort of idea of what they may suggest or any options that I may have ???
Also,Will they accept that I will be contributing more towards the household and children cost's ???
I guess that the IVA would still be all mine and that my partners low income would not be relevant ??

Any advice welcomed

P.S - WHAT A FANTASTIC FORUM, IT'S BEEN A REAL LIFELINE AT TIMES OVER THE LAST YEAR OR SO.

Hi - your first step is notify your IP of your change of circumstances and complete a new I&E form for the household out what, if any, disposable income you have available for creditors. If the iva is not affordable you could go BR or perhaps enter a DMP. Congrats on yur new relationship! X

Thx,
Is there a minimum monthly payment for an IVA or would it be down to my creditors to decide ??

Your monthly payment is decided by the amount of disposable income you have after your normal bills and household expenses have been paid.

Usually the lowest payment is £200 but some companies do accept less. You need to speak to your IP about whether or not your payments can be lowered.

Ok,
Is there a possibilty that they would agree to extend the term if the payments were lower than £200 ??

It is possible, but it is something to take up with your IP.

The figures you give only leave you with £15pm for the iva if you take your starting point as paying £175pm current affordability. Do you have anything to lose in BR?

The only thing I own is car worth approx £1000 and I need it to work.

Would I still have monthly payments if I went into bankruptcy ??

Don't really alot about DMP's, can u give us a little more info please.

Thx for all the advice so far.

It is possible that you will have monthly payments in bankruptcy, if they made an order for payments --- at the moment this kicks in if you have disposable income over £20 and lasts for three years. The expendture allowances are different under BR, so the disposable income you end up with under BR may not be the same as under an IVA.

DMP's are another kettle of fish! Basically they are an informal arrangement (i'e not protected in law) whereby you and you creditors agree what you can afford to pay each month, and the payments will continue until the whole debt is paid, which could go on for 20 years!!. Some creditors will stop charging interest as a courtesy (they don't have to and some won't). They are also free to change their minds at anytime and demand full payment or start adding interest again! Creditors can also sell on the debt to another comapny who might want nothing to do with a DMP.

If your car is only worth £1k then it would be safe in bankruptcy.

You would only have to make monthly payments if your disposable income is over £20 once your normal bills have been paid and this would be for three years.

A DMP is where you agree to make reduced payments to your creditors until you have either paid all of the debt off or your circumstances improve and you can go back to making normal payments. The drawback is that they are not guaranteed to freeze interest or charges and a DMP can last for a long time.

Sounds to me as though BR could be a solution as you have no assets.

Thx for the reply foggy,
Reading this, I can't beleive anyone would enter a DMP agreement unless they have some sort of asset to protect.
It would certainly seem that bankruptcy is my only option at the moment.
Would I have to do it through my current IP or any other ??
I have read some post's on the forum that suggest it is easier and cheaper to do it on your own, I am not sure that I have the knowledge to do this though.

Lastly how does the expenditure allowances for banruptcy differ from IVA, are they better or worse ??

Thx agqin

You can do bankruptcy yourself. It costs £600 unfortunately although if you are on benefits that figure is reduced. There are companies that can help you but they will charge a fee on top of the court fees.

If you look at this link it will explain all about BR:

http://www.insolvency.gov.uk/

There are a couple of posters on here who have experience of BR and can give advice. We are here to help you with any questions about the forms as well.

I know the BR rules have changed recently but not sure how that affects the allowances. They always used to be more generous than those in an IVA.

Thx for all your help so far

Any time, there is always someone around who can answer your questions or who can just give you some virtual support.

Thx again