Missed payment ..and...

[abcdefgh]

I am just about to miss my first payment in to my IVA due to a personal matter. It would have been my 15th payment and I have not missed any previous payments. There will be no problem with the next payment due in May.

Can you tell me where I stand? ie I have informed my IVA company (Payplan) - do I have to go in to the reasons for the missed payment or am I entitled to miss one payment and keep my reasons private? I am very worried about this.

While I am here, my IVA is for £27,000. Under debt management with payplan I paid c£5,500 to £6,000 in a year before they finally got my IVA. (my debts went up because my creditors refused to freeze charges and interest) and have paid c£6,500 in to my IVA. So far the latter has just gone towards Payplans fees. It is demoralising to know I have paid over £12,000 since joining Payplan (whose debt management advice and service was appalling) without any sign the debt has gone down. In December my wage will be dropping by £185 due to shift closure and an early indication from payplan is a possible 2 year extension to my IVA even though all but one smaller debt has been sold on - presumably for a fraction of the original value. The thought of 45 more months is depressing enough as I have no one to help me settle early (not a moan just a statement of my situation - its my problem but I know in the terms of the IVA I cannot make an early settlement offer myself) and an extension will finish me.

I have been advised (thank you) on what to say about the possibility of an IVA extension but though I have (reluctantly) considered bankruptcy the crux is no one seems to know whether the term is 12 months or 3 years, and the fallout from bankruptcy seems ambiguous aswell. Sorry to be so long winded but any advice would be very welcome as every aspect of my life is on hold until I am debt free and as speedy a resolution as possible is desperately sought. Thank you.

[MelanieGiles]

Your Supervisor will need to know the reasons which have caused the missed payment, but do not worry as we are rarely judgemental.

You are yet another example of the dangers of entering into informal proceedings rather than formal. Why on earth did it take so long to set up your IVA?

I do think that you should now consider whether bankruptcy proceedings are the right way forward, given your anticiapted reduction in income. To clarify the timings - you get your discharge from bankruptcy after one year, but if you are required to make monthly payments then these are taken for a maximum three years.

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

[abcdefgh]

Thank you - the IVA took so long because Payplan told me that by moving back to the family home, therefore cutting my expenditure and making high payments under the management plan, my interest was more likely to be frozen. I told them moving back to the family home was far from ideal and I wanted to retain my independent living - it was only after several months that they turned round and said your interest will not be frozen whilst you are making high repayments through [us]. It wasn't till I lost patience after daily calls from my creditors (continued for nearly 12 months) and no change in interest after 6 months or so that payplan started to act having told me to be patient with regard to the calls, charges and interest. Unfortunately I trusted them and was wary of an IVA until I realised that this was the only way I was going to get the interest frozen.

[MelanieGiles]

The advice you have received seems very odd - and to advise someone to seriously amend their lifestyle as you were asked to do is in my book "crossing the line".

Try to continue with the IVA if you feel that you will be able to keep making the payments - after all it is set up now and the end is in sight, however with the antipated salary reduction this may not be possible. It may, however, be feasible for you to apply to your creditors for a variation of the terms, and thus make lower payments. This does not always mean an extension of time, and you should discuss this with your Supervisor.

As you appear to have lost trust in your current IP firm, it might be sensible to take a second opinion if you feel that you are not getting the right level of advice.

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

[Adam Davies]

Hi abcdefgh
You have paid 14 out of 60 payments and with your income reduction of £185 in December causing a probable 2 year extension to your IVA.By the time December comes you would be 22/60 way through your IVA.
It may sound silly but have you thought of an additional job to pay the £185 per month shortfall?? I know that this will be hard but its a great incentive to know that you only have to do it for about 3 years and then you will be totally debt free.
The alternative is another 6 years of payments or possible bankruptcy.
You have a few months to look around for a second job that will fit in with your current one.
Just a thought
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Janey]

I know every case is different, I recently entered into an IVA with Payplan. The agreement I have is that I make 60 payments but the term can be spread over 72 months at the discretion of my IP, thus if I need to miss a payment for a justified reason I can.