What do I do?

[s.e]

Hi, I have just welcomed the birth of my first child in November and asked for my payment to be amended and calculated that it is 15% of my monthly income and deducted this off my payment total. I am in two years and just had my annual review and the IVA supervisor stated that they cannot amend payment and that I need to request a variation meeting at a cost of £500 + VAT. They also stated that it is not reasonable to for me to support both mother and baby. What do I do?

[ray_a]

Hi SE

I find that is very harsh as your circumsyances of changed and generally IVA variations on a change of circumstances of this nature do not warrant such a charge. I think Melanie will have a comment about this when she reads this!

Who is your IP as it will give us an idea of what we are up against?

We should be able to help you so don't just panic yet!

[Martin2011]

First of all congratulations s.e., really great news, even though I imagine you and mum must be pretty tired just a month in to disturbed nights!

A charge of £500 + VAT for a variation meeting seems extraordinary to me, it's a very real change of circumstances with very real costs. I understood that there are guidelines about the allowance for children within an IVA, so it's hard to see why a meeting is necesary at all! Completely agree with Ray that this is one for the experts. I'm sure Melanie or Andy will be able to offer some clear advice and help you get this sorted....certainly not something you want hanging over you during Christmas.

Once again, many congratulations to you and your new family,

Martin

[MelanieGiles]

If IPs are required to do work outside of the usual scope, then it is right that they be paid for this work. So I agree with the basis of charging variation fees - sadly these days many creditors do not.

The meeting is necessary, in order to reduce this posters payments to ensure that the IVA continues to be viable, so there is no reason why the IP should not be paid for additional work carried out, and £500 seems more than reasonable. I suggest that you ask for this to be included as an additional cost of the arrangement rather than extra monies you have to find, though.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
I guess the comment has come off a case worker and not your IP,I do hope so
Unfortunately a reduction in payments has to be agreed at a variation meeting,however most proposals accepted these days have a modification allowing the IP to reduce payments by upto 15% without the need for a variation meeting.
Ask your IP,I suggest a letter,to formally vary your payments by 15% due to the baby and also state that you are not happy with the comments made.
Congratulations to you both and let us know how you get on

Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Martin2011]

All good advice as ever.... sorry Melanie, I appreciate that anyone should be paid for unscheduled work and I guess for some professionals £500 is a reasonable fee (wouldn't doubt for one second that your worth it, and then some!) Having said that, when providing a professional service and agreeing a whole fee for managing an IVA, wouldn't the fee calculation anticipate some additional work, over and above the routine administration during a five year term? At the end of the day, I guess the initial agreement specifies the terms, and so long as it's made clear to creditors and debtors that additional activity might result in additional cost, and that some one will be liable to pay fo it, it's fair enough.

Will go eat beans on toast now and be quiet for a bit, I promise!

Martin

[MelanieGiles]

No - when you propose an IVA you don't really envisage that it will need to be varied. I vary less than 5% of my IVAs over their term. If you were to build in additional costs on the off chance that the proposal would need to be varied at some stagem, creditors would not pay for this.

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

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Martin2011]

Fair point, I stand corrected.... will offer to buy you a compensatory drink in 37 months!![:)]

Martin

[s.e]

Hi, I have asked my IP and they state that they require the money or no variation meeting!! the thing is that I cannot afford to pay the variation meeting fee without defaulting payment and that the CSA will be expecting me to pay. I have no other choice other than to go bankrupt and stand before the judge and explain the reasons why is that the IP would not resolve my issue. How would that go down? and what advice would you give me?