www.iva.co.uk

Some advice please folks.

We are just about to complete years two of our IVA and our IP has requested bank statement copies. They didnt do this last year and were concerned about what they are looking for. We havent been doing anything untoward but have to admit that we havent been mangaing our finances too well in the last few months. Generally, when this happens, what are they looking for?

One thing were particularly worried about is that we have an obverdraft (seriously didnt realise that we shouldnt). We struggle, but live within our income (and OD) and would have a problem now if we were told to get rid of the OD.

The last thing we need now is an order to ger rid of the OD, an increase in payment, a lecture on how to manage our finances and a telling off! We are two years in, and all in all doing OK if were left alone.

Many thanks,

600andy

An overdraft is credit and a breach of your IVA terms. If you need an overdraft then something is wrong with the IVA payments. You will need to discuss this with your IP as there may be grounds to fail your IVA.

Not what you want to hear but I believe you cannot have an overdraft or any form of credit whilst in an IVA without the express consent of your IP. J

How much do you owe on the overdraft? IP's permission is generally only required for credit of more than £500, although clearly it is not sensible to run up an overdraft whilst in an IVA.

Our OD is for £2000 and we use it to the full every Month - this came about after a lot of big & unexpected car repairs that fell outside of the monthly budgeted sum and we just never clawed it back. There was certainly no devious intention and if ordered I guess we would just have to find a way to clear it. We dont want our IVA to fail and have managed kind of OK even with the OD but clearly this is an issue. My Wife is calling our IP now to explain the situation so fingers crossed for a positive outcome. I have to say, even after 2 years, whilst our attitudes to spending have changed big style, our ability to budget with 3 kids and make everything balance continues to be a challenge. Nothing ever gets cheaper. When we go shopping, we pay more for ever less and our IVA doesnt track this....so its easy to find yourself in an overdraft situation - kinda like how we eneded up on one in the first place. Were feeling every bit as insecure and scared now as we were when we first requested our IVA and it isnt meant to be like this!

Michael Peoples wrote:

An overdraft is credit and a breach of your IVA terms. If you need an overdraft then something is wrong with the IVA payments. You will need to discuss this with your IP as there may be grounds to fail your IVA.

So were doomed then to Bankrupcy? OMG - just for having an OD?

It depends on what the terms of the IVA are and what modifications were proposed. I would think that at the very least your IP will need to call a variation meeting but hopefully creditors will not seek failure of the arrangements.

Michael Peoples wrote:

It depends on what the terms of the IVA are and what modifications were proposed. I would think that at the very least your IP will need to call a variation meeting but hopefully creditors will not seek failure of the arrangements.

Thank God - for our IVA to be deemed a failure would be harsh! At the end of the day, if were instucted to clear the OD and cancel, we can do somehow, but not sure how long it would take. I guess if we took an IVA payment break for 4-6 Months, that would put the majority back but would also extend our IVA term.....

This really is a simple (perhaps ignorant) mistake but one that has given yet another wake up call. Where can I get some good advice and tips about budgeting better - we really are not getting any better with it and keep getting caught out with the unexpected - the car being the worst. Last week, the clutch suddenly failed - cost £900 - we had to borrow from a friend as we have no reserves to cover this......and this seems to happen to us a lot.

ladyh wrote:

Hi there, welcome to the forum.

When your IVA was accepted was your over draft clear? Did your ip or company not tell you that this couldn't be used?

I know it is hard when you've got the kids, we had 4 at home at the start of ours and you're right everyweek you go to the supermarket and something has increased.

I hope you get all this sorted and its a possitive outcome. £2000 is a lot of money and I'm wishing you all the very best.

Let us know what your ip says. Yes you could extend the terms of your IVA but surely this has to be so much better than having it fail?

Good Luck

xx

Hi, thanks for your support. No, in fairness, quite a lot was not explained in the beginning - we were in a rush to be accepted (as you do) and the IP was in a rush to sign us up (cant think why?!) and we did comment after the event that we were carried along somewhat without really knowing the depth of questions to ask. Yes, perhaps we should have look into it more at the time but really felt that we were just days before disaster and the whole period became a scary blur.......and since then, the time has flown with no issue.

Kids, cars and shopping - they all haemorage money dont they? We find this the hardest of all - it feels impossible to budget, especially as were budgeting in arrears if you know what I mean. The bills were and are coming before we have acrrued the savings to cover them....

Thanks, yea, fingers crossed big time - happy to extend the term if it resolves the issue, but we HAVE to get better at managing, especially with the unexpected (if thats possible?!)

Have you read your agreement? Mine clearly states no overdraft or any credit over £500 without the prior consent of the IP.No matter how rushed you are there is no excuse to not read through such important paper work thoroughly. If such a clause isn't in there then I would be very suprised. I hope for your sake you have a sympathetic IP. My agreement also clearly states any breach of terms could lead to IVA failure.

Come clean with your IP and go for a payment break to clear the overdraft,and add the months onto the end of the IVA if possible.

I have had similar car issues of late and have had to take a payment break for 2 months to sort things out.

If its a genuine mistake and no one is saying it isnt then your IP should understand whats happened but please,talk to your IP if there are any other problems.

Paul

Angelrainbow that's a bit harsh. Yes, we should all read our proposals and the majority of people are desperate when they choose an IVA and would sign anything if they think it means an end to their debt problems. I'm not saying it's right, but it happens.

I hope your IP is understanding Andy, and please let us know how you get on x

Skippy13 wrote:

Angelrainbow that's a bit harsh. Yes, we should all read our proposals and the majority of people are desperate when they choose an IVA and would sign anything if they think it means an end to their debt problems. I'm not saying it's right, but it happens.

I hope your IP is understanding Andy, and please let us know how you get on x

Thanks - yes, we WERE desperate and perhaps didnt ask enough questions at the right time - many of these became clearer although we maintain we didnt know as much as we shopuld of up front.

We, like most did our very best to keep our head above water until we just couldnt and were literally days from something nasty happening. When you have a home, small children and your the sole earner, the sense of responsibilty is overwhelming - I am sure some of you will know what I mean. Obviously we did read the document through but didnt fully memorise its content and filed it away.

Even now, we do not pretend to be IVA experts and learn new things as different situations have arisen.

The overdraft thing is an easy albeit foolish mistake. I am sure our IP will not allow an otherwise perfect IVA to fail as it is in no-ones interest to allow an otherwise viable IVA to fail after 2 years - but I guess what will be will be.

I suspect (and hope) that we will simply take a payment break, clear the OD and just carry on albeit a tad wiser. If our IP takes us up BR road, then so be it - I have no control over that.

IVA's are a wonderful thing, but perhaps some IVA providers would do better if they were a little more informative, clearer and maintain closer contact than a questionnaire in the post once a year....all our contact has been by letter or telephone - we have never even been to their offices as they are far away in the North. I am not saying I want to do luch with them, but a friendly, customer focused how can I help you approach is not something we have experienced - that said, an IVA isnt a membership to some club I know that.

Generally,apart from this faux pas, our IVA journey has been trouble free. We have suffered perhaps from poor or too little info and advice from our provider and getting the info we have sought has often required some persistance - that said, on a couple of occasions they have been great - so its been a bit of a mixed bag of experiences but largely of the negative majority.

Were just waiting for a call back from our IP and then we will know the score......I will update the forum. Thanks for all the words of support (and the harsh comments which are not totally unjustified) as it is a stupid mistake to make in the first place.......

If we all hadnt made mistakes we wouldnt have all met up on this wonderful place!!

Exactly PD!