We had our creditors meeting adjourned last week until today and now I've had the phone call to say the meeting has been done. The outcome is that Northern Rock want us to pay an extra £50 per month. The thing is I don't know what to do. On the grand scale of things £50 doesn't seem too much, but on the other hand it will really really really push us to a tight budget. What I mean is, if the petrol prices continue to rise or if utilities rise in price then thats it we're stuffed!! Basically if we accept then we can't afford for anything to go up in price for the next 6 years.
Its hard to explain, I think we could afford for the extra £50 but I think it will eat in to contingency funds a bit. However, if we don't agree to it, then the only option is BR, because a dmp would take 27 yrs to clear!!
I don't know what to do. . . . . help me please!!!
Hi Kazza, sorry to hear that things haven't gone totally to plan for you.
You do need to think long and hard about whether this extra money is sustainable. If not, then your IVA may well end up failing anyway. You should not be struggling from day one, and things will go up and it's always possible that your payments may have to as well if you get payrises.
Would BR be such a bad thing for you?
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I don't think BR would be bad for us. We have a house, but its in negative equity by about £7000. Neither of us are in jobs that would be affected by it, I'm an administration assistant in a haulage company and other half is a lorry driver. I think it just the word 'bankruptcy' that sounds scarey!
You should not be afraid as bankruptcy is there for the protection of people in financial difficulties. If you cannot afford the £50 then there is no point in proceeding with the IVA as it is doomed to fail. Six years is a long time with little or no contingency and if your IVA failed after 6 months, a year, 18 months etc you would be back to square one and all money paid would be lost.
There is also the danger that when the market does start to recover you will have equity in your property and bankruptcy may cause you to lose your home whereas petitioning now would not. You have made your best offer and one that you believed was sustainable. Think long and hard about agreeing this uplift from N Rock. It may be worth asking your IP to go back to them for a last time to see if they will remove the uplift or otherwise you will petition.
They are questioning a few things, the fuel allowance - which is £245 a month, considering my partner does 50 mile a day round trip to work and I do 15 its not a big allowance. the food allowance (which works out to be £80ish a week) and the social activities (which is only about £40 a month anyway). It just seems that £50 is a small amount to turn down an IVA, but it seems to make a big difference!
your allowances seem to be inline with guidelines and your right it is the next 6yrs! Have my meeting next week and we are expecting them to quibble our petrol allowance which is about the same as yours.....what happens now then has your meeting been adjourned again or do you have to make a decision now. Could you meet them halfway at £25 or is this not an option? what does your I/P advise?
We have to make a decision now. I've got to phone IP back in a minute with an answer. the way I see it is that the £50 is a tank of petrol they are taking away, and we can't really afford for that to happen. I could see if they will meet us half way, would be better then nothing surely
Has your IP actually qualified your expenditure to NR?
Creditors asking for an increase in contributions will usually provide a breakdown of where they expect savings can be made, so if you can explain that there's no possible movement, they may accept.
Kind regards,
Angela Rosler
Insolvency Manager
Helping people with their debt problems for nearly 10 years.
Contact me directly for free, impartial, confidential help and guidance.
I have just spoke to IP and asked to go half and half, so £25 increase. I'll just take it out of social allowance and stay in more, although don't know how I'll stay in more then I do!! However we'll see what the outcome is when he calls me back in a minute
Kazza, please don't agree to anything that you can't afford. As the others have said 6 years is a long time, and if BR is an option then it's definitely worth considering.
I think NR are being unreasonable by reducing your petrol and food allowances and are shooting themselves in the foot by doing this.
Pennyless - my mortgage isn't with northern rock. If they can leave me on a repayment mortgage then yes I feel they're probably being nice to us. But there's no point being on a repayment mortgage if I can't afford the repayments because the money is going to IVA
Hi Kazza and sorry to hear that NR are pushing for the extra £50.00, life is not a bed of roses in an IVA but with careful budgeting can be bearable, I personally enjoy the restrictions in place and wouldn't want it any other way. You are 100% right in questionning whether you can afford the extra as 6 years is a long time. Bankruptcy may seem scary right now but if you read Skippy's blog it may help in your final decision. Hope it's sorted as soon as possible and good luck for your future. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
