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Hi there, I am under an IVA at the moment. The question I have is a little long-winded but I will try and make it brief as possible.

After speaking with Blair Endersby (after information received in post) to discuss the possibility of an IVA, we decided we liked what they were saying and my partner and I filled out the pre-requiste forms, gathered all the required information together and set off down the route to what we thought would be a way to paying our debts and still being able to 'live'. We are approximately 8 months in and things have gone from bad to worse for us. At the initial consultation, the process was explained and after several LONG phone calls, we were told we had a case, both having left previous relationships with nothing and having to start from scratch. The contact at BE said that we should make token payments and start the process of obtaining a new bank account etc. which we did. The proposal was put forward in joint names (after a great deal longer than the initial 4 - 6 weeks we were quoted) only to be informed that my partners IVA wasnt accepted as it was felt that she didnt have enough 'outstanding' to warrant the IVA. We were given a choice as to accept the IVA solely in my name or not. We were also told that if we did accept this, my partners debts would not be covered and that we would have to satisfy these ourselves. At this time, the stress we were under grew to such a proportion that the IVA felt like the only way out for us and we had no choice but to accept the proposal.

With that background in mind, I ask if BE should have made some allowance for this fact and also whether my partners incomes (wages, child maintenance, tax credits etc.) should have been considered especially as the IVA is in my name solely and nothing to do with my partner?

We are in the situation now whereby we are finding unfeasible to live having outgoings which effectively clear our joint account by around the second week of the month leaving us with no money for the remainder of the month until we get paid.

Thanks in advance for any advice you can offer.

regards,
Andy

Hi Andy

It is always difficult when IVA's are put forward for couples, and only one is accepted.

It appears that your IP firm gave you the option of going it alone, or sticking with your partner, and you felt that you needed to accept the IVA. In these circumstances, only your income and expenditure should have been taken into account for the IVA payments, and you (and the IP) should have made certain that your partner was left with enough money to service her share of the household expenditure and ongoing payments to her own creditors. Your post does not make it clear how much assistance you were given by the IP, who I assume you have never met or had little personal dealings with.

What you need to do now is sit down with your partner and work out a family income and expenditure budget, to see whether you can afford to continue with the IVA and make ongoing contractual payments to her creditors. It may be better for you to bring the IVA to a conclusiom and consider whether a debt management programme or bankruptcy proceedings provide you with a better option.

Remember that family comes first! Do you have any assets which would be at risk in bankruptcy proceedings?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Hi Melanie,

Thank you so much for the prompt reply.

I have been away with work for a few days and this is the first chance I have had to reply. In answer to your question, it is true to say, the only face-to-face dealings I had with BE was when a representative of theirs came to our home to collect copies of bank statements, mortgage statements etc. When we started the IVA process, as is the case for most people, we felt that we had completely run out of options and the IVA seemed the perfect way to help us out of the situation and, at the same time, make us feel like we were at least making a positive step towards paying back some of the money we owe. In the early stages, everything was going well with regular communications from BE keeping us informed of the progress etc. The initial 4 - 6 week turn-around time actually lead in to approximately 3 months, during which time, we had attempted to pay token sums against our outstanding debts.

When the IVA was finally 'accepted', allbeit in my name and for my debts only, we were offered the choice of continuing with the successful application with all the incomes and expenditures based on our joint income/debts, or going through the process again with revised amounts but felt that we couldnt wait another 4 - 6 weeks. At the time we were advised that there was no guarantee that the application would be successful, potentially leading to a case where we would be back in the same situation as before we started down the IVA route only worse off having paid only token amounts where possible. I personally felt there was no option but to go through with their original proposal.

In answer to your other question, we have a house between us on which is a secured loan in addition to the mortgage, we both drive cars of no major value (although one of the stipulations I found out AFTER signing was that I had to either sell my car, keep 3k and give them the rest OR pay them 2725 by the end of the IVA period). I also received an RX1 form telling me that I had to sign the house over to BE until the end of the IVA. I was not aware this was going to be the case so there was obviously a communication breakdown somewhere. We have no savings, no other properties etc. The house, with the secured loan is in a negative equity situation. BE advised that if I were to file for bankruptcy, there would be a potential that my ex-wife's house could be called as, when I left, I signed the property over to her including the equity so that she and my son are secure. She now has a mortgage on the property in her name and has been paying the mortgage for approximately 3 years or so. I, for obvious reasons, didnt want my ex-wife to know my situation.

We have a loan secured against the property which was a prior attempt to resolve our financial difficulties. There is an insurance policy on this loan that matures at 5 years (apprx 12k) which we will receive. I have suggested to BE that I make reduced payments and bring the account up to date when this policy matures (Nov. 2008) and, at this time, the payment amounts should start to reduce on the secured loan giving us the ability to revert back to the full amount for the IVA. They have asked that I document the proposal and submit this to them so that they can approach the relevant companies with the details.

If I were to file for bankruptcy, what would the effects be? Would we lose the house? Would we still be able to keep the joint bank account etc.? I know this a sweeping question, but in essence, am I better sticking with an IVA which we cant afford or would I be better going through bankruptcy? An obvious concern is my partners credit rating. Is she automatically lilnked to me through the property or could her credit rating be disassociated from mine?

If I were to file for bankruptcy how likely is it that we would lose everything? I am fine with being the one who has the 'blackmark', but there are going to be times ahead in the future when we need to purchase something (my partners car is on its last legs and will need to be replaced soon)which may require an additonal injection of funds...

Once again, many thanks for the assistance you are offering. It is truly appreciated as is the service given by the forum and its 'keepers'..

regards,
Andy.

Hi Andy

You will not lose your house in bankruptcy if it is in negative equity - as it is only the equity portion which vests in a Trustee. It does sound to me that bankruptcy might be a kinder option for you at present, as you offer of the £12,000 insurance payback is at risk if you claim off it during the next five years.

If you car is worth more than £3,500, the be prepared to have it sold and find a cheaper replacement, but that is the only asset which is likely to be effcted by bankruptcy.

As you are already in an IVA, it might be better for you to rework your finances to a level that you feel you can comfortably afford and then ask Blair Endersby whether they feel a variation would be possible. Your IP is the best one to give specific advice, and try and speak to them directly with regard to your options.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Hi Melanie,

Thanks again for the prompt response! Is there any possibility of changing IP's after an IVA has started? (kind of a jokey question but I have seem to have had more positive feedback and response from yourself in the past few days than in all the time and dealings with BE!!)..

I will complete an amended I/E form and submit based on new payments which are possible but wonder if its worth mentioning to them that as it is solely in my name that my partners debts arent covered and therefore her income shouldnt be part of the information required?

kindest regards,
Andy.

andyg

Alas not, or only with either a Court Order or the resolution of your creditors, and you would struggle to get Blair Endersby to agree to that!

However, I am here to help at any time with queries or problems that you feel your own IP has been unable to deal with.

I entirely agree with you on the point of your partner's income, and you should certaibly mention this to the IP.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk