www.iva.co.uk

Me and my husband have IVA that we can no longer maintain payments for due to our tax credits stopping. We are only 9 months in. We have total debt of about £40000 and expect to pay back originally around £4500 each...£9000 approx in total not including an equity /12month clause. We don't want to fail and a relative has offered £5000 to pay them off. I think we've paid in around £2000 so far. What are chances of offer being accepted???

What are your actual monthly payments at the moment ? Have you requested a new I&E to reflect the reduced income ?

Your IP should have the discretion to reduce payments by up to 15% without asking the creditors -- anything more would need a variation meeting called, but is still on the cards.

If you manage to get the monthly payment reduced then the amount needed for a F&F will also fall.

Good advice form Foggy.

Please give us more information on how many payments you have left and how much they are.

Hi both,

Thank you for your replies. Our monthly payments were
Me £109 for 10 months then £73 thereafter
Husband £11.70 for 10 months then £74 thereafter
These were then increased with my husbands pay rise very slightly but now tax credits have stopped the income & expenditure showed nothing left for creditors so no option to reduce payments and therefore danger of failing.

We have put offer forward to our case officer who said she will approach the IP but I am worried as don't want to be made bankrupt after years of fighting for the house and struggling with this debt

Fingers crossed - make sure they know the money is only available for a full and final and will be withdrawn if it's not accepted. Your IP will have to put this offer forward if that is what you want as it is your IVA.

They said IP will want mortgage redemtion statement and house valuation though and I am worried about this increasing their view of the bankruptcy route? I think we owe £96000 on our mortgage and I could guess house to be valued around £110000 if we are lucky.
I can;t stop worrying.

They would normally look at 85% of £110,000 so might be lower than you think

I'm unsure how they work out their best option - ie accepting our offer or making us bankrupt? Surely the 85% is only for the equity clause to extend the IVA for 6th year. If they made us bankrupt would they not look at 100% or am I just talking nonsense. It is all so complicated and I wish I had more to offer but I don't.

Have they threatened you with bankruptcy? I know of only one company who do that and, if they do, you can get them to remove the clause.

If we can no longer make payments into the IVA it will fail so if they decide not to accept our offer then bankruptcy may be an option?

The IP has to put forward your offer if you request it.

The costs in BR are far higher than those in an IVA, so the creditors would stand to get less. Payplan, if you are with them, like to put a clause in the variation mentioning bankruptcy -- this is totally unneeded and should be removed.

We are with Payplan...does this mean they are more likely to apply for bankruptcy?

Selling a house worth £110,000 with £98,000 mortgage usually after solicitor, mortgage redemption penalties and agency fee's there would not be any equity to be realised. it would be unusual and unlikely the creditors would pursue bankruptcy for the above equity.

I would recommend speaking to your IP to put forward the 5K F&F to your creditors. F&F on paper would be a better option to the creditors it would seem based on the limited information I have from this post.

Payplan will very likely put in a clause for bankruptcy in the full and final - you tell them to remove it and they will!