IVA Breach - Extra Credit

[Free Bird]

Hi,

I am new to this excellent forum, but have been reading it for the last couple of years since being in my IVA.

My IVA is generally going OK, and I have managed to get a credit card with a £500 limit (all OK with my IVA terms).

A few Months ago, the card firm upped my limit to £1,000, which did not bother me, as I regularly use it, stay below £500, and pay it off every month.

But last Month was one of those where a number of things went wrong all at once: New fridge needed, new electric shower - and had to upgrade the associated wiring. In short, I struggled, but got the funds together from a small reserve that I had accumulated.

Then last week, it cost me £400 to get my car through its MOT and I got the repair done on the card (had no other choice).

Got the statement through and, what with a few other transactions, I now have a balance of £700 to pay off.

I am able to pay off the balance by the due date, but I am worried that my IP will check my credit file, find out about my 'breach', and fail my IVA.

Can my IP access my credit file to find this stuff? If so, am I better confessing, but reassuring them that I can manage it, and beg for mercy?

Or am I better of not rocking the boat, and quietly pay my card off, safe in the knowledge that if I do so, my IP won't find out anyway?

Sorry if this sounds sneaky, and I know that officially I should request a payment break. But I find the staff at my IVA company pretty unhelpful - and that is if I can get through to them in the first place.

Any help would be welcome, and thanks for reading.

[Michael Peoples]

You cannot get credit over £500 without the consent of the IVA supervisor so you may be fine if you seek that permission. I doubt if your IP can access your credit file but even so it would be best to peak to the IP and advise what has happened. It does not sound like a hanging offence to me.

[MelanieGiles]

As a practising IP myself - my best advice is pay the balance off as soon as possible and make sure that you don't exceed the credit limit again. You can also ask the credit card provider to reduce your limit to £500, to avoid this happening again.

[UpToMyNeckInIt]

Hi Free Bird, and welcome to the forum,

Some great advice already, and I think we have all had one of those months at one point or another.

I'm pretty certain you will get away with this one: I don't think your IVA firm can access your credit file, so if I were you, I would keep quiet, and just get below your £500 limit ASAP.

In any event, the worse that would happen is that your IP issues a notice of breach, which you will have 30-Days to put right.

As you suggest though, why risk that? You don't want un unhelpful customer service person (I have similar issues with my IVA firm), potentially making all sorts of threats.

Finally as Mel suggests: get your card company to reduce your limit back to £500, to avoid future temptation/mistakes.

Good luck.

[Free Bird]

Hi all,

Thanks for all your advice. I am just going to stay quiet, and reduce my balance asap.

[back on track]

just out of curiosity,who gave you the credit card?

[Free Bird]

It's with Vanquis.

They're ok, but they say they routinely apply credit increases to customers who use it responsibly.

Knowing how much trouble credit card debt contributed to my situation, I think it could be a slippery slope for some.

Just breaching my iva by £200 brought me out in a cold sweat, so I have learned my lesson.

[UpToMyNeckInIt]

I too have a Vanquis card, but IVA customers need to be aware that acceptance is by no means guaranteed (I think Vanquis use their own criteria, unrelated to your credit rating).

I understand that 'Aqua' also consider applications from IVA customers.

I must stress the point that I only did this because my IVA allowed £500 credit.

So my advice to anyone considering doing this is: MAKE SURE YOUR IVA ALLOWS IT, because not all do, and only do it if you think you will be able to usually clear any balance each Month.

[Shining]

Once the balance is in your accepted zone of credit, ask Vanquis to reduce the credit limit for now so until the IVA is over this can't happen again causing you worry x

[back on track]

make sure your proposal actually says £500 credit as this usually refers to credit for things like gas/electric and insurance etc.not credit cards or loans.

[UpToMyNeckInIt]

In relation to obtaining additional credit, there are subtle but significant differences in wording that apply to how you interpret this clause in your IVA.

For example, mine is worded:

'Apart from my self-employed liabilities, I propose that I shall not incur any credit greater than £500 during the course of my IVA except in relation to domestic utilities and to re-finance a balloon payment at the end of a vehicle Hire Purchase Arrangement without prior written consent of the Supervisor'.

I interpret the above as meaning that theoretically, I can obtain any credit I want for my Ltd company (self employed liabilities). Additionally, I can take out £500 in personal credit AND have credit for 'utilities' on top of that. It's only if I wanted to borrow more than £500 that I would have to seek consent.

The 'self-employed' bit probably won't apply to most, but it is an interesting exemption - fraught with all sorts of potential pit-falls if abused.

Additionally, I understand that some IVA's do not make the exception for 'domestic utilities', in which case, back on track's interpretation would most likely be the correct one.

[Foggy]

Bottom line, on the face of it, is that it is your IP's interpretation that carries the weight --- so always get it ( in writing) from the horse's mouth.

[MelanieGiles]

A limited company is a separate legal entity to you, Uptomyneckinit, and the company is not bound by any of the terms of the IVA.

[kathryn222]

As a practising IP myself - my best advice is pay the balance off as soon as possible and make sure that you don't exceed the credit limit again. You can also ask the credit card provider to reduce your limit to £500, to avoid this happening again.

[kallis3]

Not sure what you want to know on such an old thread?