www.iva.co.uk

Good Evening

First time I have posted. I am trying to find out as much as I can for my very stressed partner.

Background is my partner is in the Army he has had an IVA since Sept 2006. We are not married and he lives on base so I was not involved in the process as I had only just met him then. When he took out the IVA he was on sick leave from the Army after suffering a break down while he was out in Iraq (for the 3rd time)and his life in the UK was falling apart and he was unable to cope. He doesn't remember much about what was told him at the time, he definately didn't shop around for an IP and didn't really know what he was doing. He has now been back at work on full duties for just a few weeks after nearly 6 months off.

His debts are approx £30,000 and his IVA payments are presently £520 a month. They have just asked him for another £380 this month (making the payment £900 this month). With his outgoings that means he has less than £150 left of his £13,500 wages this month and will be unable to make his monthly visit to his son in Scotland.

Don't know how much info you need but initially can you help with the following questions - I have so many.

1. Is it normal for the IP to review every 3 months and then request 50% of any extra he has earned. They weren't bonuses or money from extra jobs just his normal wages. He hasn't had a pay rise or anything since taking out the IVA but on getting his 3 months wages slips they said he earned more than the £13,000 they agreed on. I have seen on IVAs that all extra money has to be disclosed but so far i have not seen IPs say flucuation in wages is reviewed monthly just that annual they might increase payments. The IP would have got his recent pay slips when he took out the IVA - his basic wage has not gone up since then. He does understand bonuses, inheritence, extra jobs will have to be disclosed to the IP.

2. If he is likely to keep paying them extra every 3 months does this mean the debts are paid off earlier or does it just go into a black hole?

3. He has received no paperwork saying what each of his creditors agreed on, what charges he is paying - is this normal? Can he request these? How should he word it if he wants to find out more about his actual IVA and what info should he be getting.

4. Is it possible to change IPs once he has signed. He finds it very difficult to talk to them, due to his mental state he didn't shop around and took the first company someone told him about (which is not one you recommend), he presumed they were all the same. He didn't have access to the internet at the time either.

He took out the IVA and sorted out his debts to make his recovery from his breakdown easier but it is now worse and he is worse off financially. Bankruptcy would severely damage his service career. If they increase the monthly payments to £610 (520 plus a quarter of the £380) the payments are nearly as much as he was paying on the original debts anyway and he would have paid off almost 100% of the capital after 60 months anyway. I feel that he didn't do his budget properly when he took the IVA out and he had no help or inpartial advice except for a couple of phone calls with the IP.

Is there anything I can help him do? What is our next course of action? or is this it for the next 5 years because i don't think he can cope.

Nothing he is going through seems to be mentioned on any of the IVA information that I have read. They seem such a good idea and people are alot better off.

Sorry for the essay

Karen F

ello Karen

I am not an expert on IVA's not even in one at the moment, but I understand that 50 per cent of any extra money is payable to the IP and made available to creditors, I owed 34000 ish and I proposed 350 per month but obviously if you can pay more you do. that 900 pounds you have had to pay in one month does seem high though, as I say I am not an expert and hopefully an expert will come forward to help you with the technical side of it. Have you had a look at the figures in the agreement? I really came on to say that I think you are an excellent supportive partner and I am sure you will be supported on this forum. it is really impportant to get this looked at for both of you as soon as possible, hopefully that will happen soon

What company did you go with?

Good luck, hope you can sort this out

LILY

karen, I am not an expert just someone who was looking into an IVA quite recently. First off let me say your partner has suffered by serving 3 terms in Iraq. It has caused him the instability of his mental health. You are a very compassionate and loving woman to remain in the relationship.

As for his IVA monthly payments. Let me tell you my debts are £73000 approximately and the monthly payment would have been £500 for 60 months with an added 12 months if I could not refinance. I do not understand why he is paying £520 on £30000 indebtedness unless his IVA is shorter than 60 months maybe? I am speculating here.

Believe me, a professional will answer your concerns. The problem may be the posting was done sort of late (after 9:00 pm)and the professionals have to arrive home wind down,eat,and converse with family, etc.

Please calm down, I know this is easier said than done.All will be well with you and yours.

All I have left is my humour.

Hi Karen - and welcome to the forum.

I am a practising insolvency practitioner, and was also in the Army for a number of years, so I will be able to advise you from both angles hopefully!

I note that your partner has only been in his IVA for a relatively short period, and find it strange that his IP is seeking such a high increase so early on. How did they calculate his wages at the beginning of the IVA. Without appearing to be "too clever", I do find that a lot of professionals do not really understand military payslips, in that there are usually a lot of incomings and outgoings which are unique to Forces Personnel and which may not constitute actual earnings. That coupled with the additional expenditure - I remember those compulsory mess bills and regimental subs!

It is quite mormal for the IP to review a client's payslips on a quarterly basis. I insist on this within my own practice, and this is done to cushion the blow of having to pay over monies caught under the now commonly used 50% uplift provision - which the creditors generally expect to see carried out just at the end of the year.

For your partner to be asked for an extra £380 for one quarter, means his earnings have been on average £250 more each month than were assessed for the IVA. There must be a reason for this - has he been overseas recently and in receipt of LSA monies? What do you mean by the £13,000 the IP agreed on - was this his annual wage? Again doesn't seem to be a correct figure. What rank is your partner, and how much does he generally take home on a monthly basis after all deductions?

Your second point - no his debts will not be paid off earlier, unless of course he does manage to pay 100p in the £ over the course of the arrangement, which may be possible given the figures you have now presented.

Your third point - I feel sure that the insolvency practitioner must have sent your partner a copy of their proposals to sign, and then a copy of the version issued to creditors, together with a copy of the Chairman's Report - the detailed notes of the creditors meeting listing all creditor modifications (if any). Can you verify this with him for me? if he does not have copies to hand, ask the IP firm to send these to him as a matter of urgency.

Your point 4 - it is not really possible to change IP's once an IVA is in place, and this only usually takes place in the event that the IP dies, or moves firm. You would need to get a specific resolution from creditors and the IP himself to agree to step down otherwise - and this in unlikely (and costly). Can I ask who your partner's IP firm is? He must insist on talking to his IP personally to sort things out, as it seems to me that his payments have been set at an unusually high level and are not allowing him space to breathe - or the opportunity to visit his son, and that is an important priority which must be allowed.

Karen, it seems to me that your partner must undertake an urgent review of his finances - you can help him with this - get him to produce a copy of his IVA proposal which will detail the income and expenditure presented to creditors, and go through it with him to make sure the income figures are correct and the expenditure is reasonable and allows for all contingencies. If you find that a lower payment is required - and please make sure he allows for those regular visits to Scotland to see his little boy - then you must get him to approach his IP directly for advice. It seems that there may not have been much contact between them so far. I agree that your partner's mental state at the time of entering into the IVA has probably made him not appreciate the implications of the agreement, but it is now time to put things right.

This IVA may need to be varied, and perhaps you can post to me in a day or two when you have gone throught that budget with him - with a fine tooth comb. Tell him not to worry. There will be a solution to this, we just need to find it, and then can recommend a sensible way forward.

And please don't apologise for writing essays. This is exactly what this forum is for, and we are all more than happy to help you find a resolution. You partner has already made a generous offer to his creditors, which was perhaps (and sadly) unsustaintable. That does not mean that everything is lost!

Hope this helps you to get started.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thanks so much for all the advice so far. I feel so helpless that he is so stressed. He is away for a few more days and the minute he gets back I will go through everything with him, looking at the figures and get back to the forum and take up the kind offers. I do know the company he is using is McCambridge and Duffy. Lets hope they are understanding and a decent company. Last year was such a blur for him and I think all of a sudden he was realised that he has no idea what he has signed up for or the consequences of him not being able to keep up payments. I really don't think he included all his outgoings in his original application.

Good Night everyone.
Karen

At the end of the day, with the job he is doing, he will know what true stress is. It really puts having a few debts, which are being repaid under a sensible plan, into complete perspective.

I know some senior people in that firm personally, who I could suggest your partner talks to. Can you find out who is acting as the Supervisor, and then I can advise better. Hope to hear from you in a couple of days.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Thanks again everyone especially Melanie for taking the time to reply. Just noticed I typed twice that his monthly wage is £13,000 of course that is £1300 - make it alot easier if it was the first figure!!

Glad the company he is using is known to you - so that is comforting that they are ok. After reading as much as i have yesterday I think the problem is he just never understood what he was doing, he never declared his outgoings correctly and never asked any questions. He is quite an intelligent guy but I think his mental health at the time was not good.

Fingers crossed it is not too late to sort this out.

When I get the proper figures should I just post them the new topics from that day or is there some other way I should do it.

Thanks again for your help and this site in general has helped me understand IVAs alot better.

Karen

Karen

Once you have the information let's see if we can suggest a way forward for your both. He is a lucky man to have such a supportive partner!

Keep going on this post - it will show up as a new one anyway and I will respond as quickly as I can!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk