www.iva.co.uk

I live with my aunt who is aware of my pending IVA. I pay £350 a month rent and she is registered disabled so she gets some form of money help through the government.. not sure what.

I have been asked to provide a letter from her confirming my rent each month but she has now said she won't do it. Apparantly the tax people have said that they have overpaid her for the past 3 years and she owes them £1400.00. I found out last night that she hasn't told them that I pay her any rent.. I wondered why she always wanted cash and not bank transfer. She says that if she confirms to my IP in a letter she would get caught.

I didn't sleep a wink last night thinking about it. If I can't prove that I pay that money.. they will see that as disposable income. In that case I have no choice but to go bankrupt. Im so angry at her.. that I am trying to get my life sorted and shes ruining it.

Life is far too stressful!!

Maizie, sorry to hear you have this problem and I don't want to add to your problems but your aunt is committing a crime. It's called benefit fraud. She has to declare any income to the Department for Work and Pensions, from which she is getting disability benefits, which she obviously hasn't. This could get very ugly and you are caught in the middle.

How long have you been paying her this rental? She has now put you in a very precarious position and she has only herself to blame if she does now get caught.

I hope you can get this sorted out.

Thank you so much for your reply. Im really panicking now. I know she is committing fraud but seriously what can I do. She has put me in this position and Im scared. If I went to the council to see if they could rehome me do you think they would? Would this affect my proposed iva or bankruptcy? Would they then find out about her. I have been there since February 2005 and paying rent since then.

Life is far too stressful!!

I would get on to the council, sort yourself out and put yourself 1st. You would probably find you will be paying less in rent if you do as well.

Hi maizie,i think its very unfair the position that your aunt has put you in,especaily that she knew you were going through the iva process.
To be honest i dont know what you can do for the best,as you say you have no proof that you have been paying her,its only decencey that she will do the right thing by you and that means admitting she has recieved money illegaly,and from what you say it doesnt look like this will happen,have you already informed your ip that you are paying this money to your aunt,what will they say if she is now denieing this as an iva is a legally binding document,have you told your ip that you cannot get proof,maybe there is another option your ip can suggest.
Im sure a legal expert will give you advice where you stand as regards your iva,but i would now look at going to the council and find out how you stand regarding your future living accommadation,but as hard as this situation is i agree with kezza put your self first,and sorting yourself out has to be your main priority
i hope you can sort this horrible situation out and still continue with your iva goodluck

Hi maizie

I am no supporter of benefit fraud, and your aunt ought to stop doing what she has been doing and make efforts to repay the money back. There would be no tax liability for the rental income, as she can claim exemption under H M Revenue & Customs "Rent a Room" scheme which allows a lodger to pay up to £4,250 per year without attracting a tax liability. The money would, of course, affect her benefit as she well knows.

Why not try asking your IP to accept bank statements showing the cash withdrawals which you are paying your aunt. Her benefit fraud is her problem, but you should not suffer as a result. I do not feel that you would be eligable for council housing, as you are single and not homeless, but is may be worth a try and should be done before you enter into the IVA as the rental amount may differ from that you are currently paying.

From your IP's view, all he wants is evidence of the money you are paying out, so the bank statements ought to be sufficient.

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

Thanks for all your advice. After a long chat with her and I know it sounds mean but I did threaten to go to the Council. I explained that I was paying her in good faith and that I was not the one in the wrong as all I wanted was confirmation of my rent which any landlord would do. Finally she agreed to sign the letter to confirm my rent... if she gets caught its her problem.

Life is far too stressful!!

Glad to hear Maizie
Its only fair she write the letter for you, you have paid the money.
I really hope all goes well for you now and you have no problems. Plod on there is always a solution.

Ang x