Would a reduction be considered by creditors?

[speedster]

Hi,

I have an IVA and am in month 16, total debt £23k. I am thinking of moving in with my long term girlfriend who has 4 children (2 mine), she does not work. Obviously my bills are going to increase as will be paying towards rent, council tax etc.. My monthly IVA payments are £303 and wouldnt't with all the other bill there is no way my wages would cover that as well. Would a reduction be considered by creditors? If so what would they be likely to consider a reasonable value.

Thanks

[ianmillington]

Hi

If you want to reduce your payments you will have to ask your Supervisor to propose a variation. You need to take a long hard look at your income and expenditure and come up with a realistic figure for him to propose to your creditors. It requires a creditors meeting and approval of at least 75% in value of those creditors that vote.

Question - Does your girlfriend currently claim benefits as a single parent which she will lose if you move in? If so, that could well significantly affect the amount you have available. You must factor that in.

It seems to me that the proposed changes could affect your ability to continue with the IVA at all, in which case you may have to consider your priorities. If you don't own any property and bankruptcy won't cost you your job, then that might be the tidiest exit route. However, before you do anything (even contacting the Supervisor) do the sums first.

Ian

Help is at Hand!

[speedster]

Thanks Ian. I am considering the bankruptcy as there would be no point in continuing paying the IVA if I was to move in. When the meeting of the creditors occured they stated that I had to put in an extra £2000 into the IVA or sell my car and pay £3000 into it. I decided to keep the car as I didn't want to get an older one which might have had more problems. If I did decide to go bankrupt would I lose the car? If so would I be in trouble if I changed the registered owner to another person such that I no longer had an asset before actually going bankrupt.

[MelanieGiles]

Cars which are valued at £2,000 or less are generally exempted from bankruptcy proceedings providing that you require them for work purposes.

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

[CoverItAll]

Hi Melanie,

Not that your posts need any support, but in 1995 the Trustee in my Bankruptcy was the local Official Receiver. At our first meeting she immediately agreed that I could keep my car, then valued at £1,500, as I needed it to get to work.

John Tegg
www.protectiva.co.uk
0808 180 0099
We will make all your IVA payments for you if Accident or Sickness stops you paying them yourself.

[MelanieGiles]

John

I am grateful for the support, and it is always good when someone can back up by boring technical information by actual experience.

On a separate matter, Spring is definately in the air, and a lot of my female clients are announcing pregnancies, which is keeping my staff busy in preparing variation meetings to lower payments during maternity leave. Given that your IVA insurance covers sickness, is it at all possible to get cover for say a six month maternity period just to cover the eraning shortfall? I am sure that this would interest a lot of our lady forum members as this has been a topical subject lately? Just a thought.

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

[CoverItAll]

Hi Melanie

Unfortunately standard wordings on Sickness insurance policies exclude pregnancy, simply because it is a condition, not an illness. However, abnormalities in pregnancy are covered. Also, the industry regards Maternity Leave as paid employment, as does the Benefit System.


John Tegg
www.protectiva.co.uk
0808 180 0099
We will make all your IVA payments for you if Accident or Sickness stops you paying them yourself.

[ianmillington]

Bear in mind that when a Bankruptcy Order is made, there is a chain of events.

On the car, and based on the assumption that if it can go wrong it will, I would check with the Supervisor (or take independent advice) on whether the car has actually been excluded from your arrangement. Assuming the IP has used the R3 Standard Terms, and these were not modified at the Creditors Meeting, from what you say there is a potential for the car to be excluded from the arrangement but subject to the cash introduction. So it might just not have been properly excluded and if it is locked in a trust for the arrangement creditors (basically the R3 Standard Terms do this for "arrangement assets") the bankruptcy might not override that and the car could potentially be in the arrangement (especially if you didn't pay the money in). So, whilst you will most likely be OK, if you want to wear belt and braces, get someone to interpret the proposal, the standard terms and any modifications so far as your car is concerned before you pull the trigger.

Hope this helps

Ian

Help is at Hand!