6 months based on furloughed pay

Get expert opinion. This is the place for new questions to be posted.
12 posts Page 1 of 1

michael249

User avatar
Posts: 4
Joined: Tue Sep 15, 2020 9:00 pm

Post by michael249 » Tue Sep 15, 2020 9:00 pm
I have a Iva and have paid 40 months of 60, my debt was £25500, I pay £430 a month so time I’ve paid all the amount back, they have also took £2500 in ppi to pay creditors, I have been furloughed since beginning of April so only been on 80% of pay, now I have been made redundant and got£14125 payout, told my Iva provider they said I can keep 6 months pay but they calculated it on my furloughed pay which is at 80% instead of my mortgage wage before I was furloughed, so they got a over a extra £1000 pound are they allowed to base the 6 months that I keep on my furloughed pay?

michael249

User avatar
Posts: 4
Joined: Tue Sep 15, 2020 9:00 pm

Post by michael249 » Tue Sep 15, 2020 9:01 pm
I’ve paid 40 months of 60months Iva, been made redundant and they took part of my redundancy as windfall. My debt was £25500 I have paid in total 40 months at £430 they also had £2500 in ppi payout and ‘now £5300 in windfall payment, so in total I have paid them£24857 but tried to pay a final settlement of £4000 from my redundancy but they said I have still got 20 months of £430 left to pay which is £8060 left to pay so £4000 is not enough they will only except £8060 minimum which if I pay that it be £32917 paid in total so that is £7417 more than my start debt, I know they charge a few thousand for their services but can they take more than you owed? and why don’t you think they would accept £4000 as final payment, told them also my situation has changed and my outgoings are a lot more so won’t be able to pay them £430 a month anymore?

luluj

User avatar
Forum Expert
Posts: 10906
Joined: Sun Dec 09, 2007 6:54 am
Location: United Kingdom

Post by luluj » Wed Sep 16, 2020 1:37 am
To avoid duplication of answers I have locked your first post, so that answers can be placed in one place for you.

You will always owe original debt, plus IP fees, plus possible statutory interest.

An offer of £4000 is unlikely to be accepted as when the balance of time is calculated you owe just over £8000.

You could challenge and ask them to consider removal of statutory interest element, this is sometimes considered positively and this would reduce total payment.
Sharing from experiences of dealing with debt

There is a solution for everyone .... Just need to stay positive !

Look at my blog "All I wanted was a baby"

Foggy

User avatar
Forum Expert
Posts: 31250
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Wed Sep 16, 2020 7:23 am
They can take up to the full original debt, plus fees and possible statutory interest ! However, on the offer front .. I agree £4k is a bit light, but, it is your offer to make , not theirs. It is up to the creditors to decide, not the IP !
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

michael249

User avatar
Posts: 4
Joined: Tue Sep 15, 2020 9:00 pm

Post by michael249 » Wed Sep 16, 2020 8:00 am
Thankyou, my other question was im allowed to keep 6 months of my redundancy money and the rest is a windfall, they worked out my pay on furloughed wages which only 80% of my full wage when I was working back in March are they allowed to do that?

Foggy

User avatar
Forum Expert
Posts: 31250
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Wed Sep 16, 2020 8:08 am
I would say that they are -- with the caveat that your IVA payments, whilst on furlough, have also been reduced accordingly (They cannot have it both ways ! ).

Have a read here -- it mentions redundancy pay, but is far from clear, merely giving discretion : https://www.gov.uk/government/publicati ... sting-ivas
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

michael249

User avatar
Posts: 4
Joined: Tue Sep 15, 2020 9:00 pm

Post by michael249 » Wed Sep 16, 2020 9:02 am
Thankyou, My circumstances have changed dramatically over the last couple of months, I usually pay £430 a month and have 20 months left but since March I have been furloughed now made redundant but the biggest thing my mother in law died who my wife and I lived with and only paid her board to live there, now my outgoings have gone up a great deal, I now Pay the rent, council tax and all the bills, so cannot afford £430 anymore my question is will the Iva reduce my payments for next 20 months still have over £8500 left to pay to Iva?

kallis3

User avatar
Forum Expert
Posts: 75946
Joined: Mon Mar 17, 2008 4:02 pm
Location: United Kingdom

Post by kallis3 » Wed Sep 16, 2020 9:12 am
You can but ask your IP.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk

Foggy

User avatar
Forum Expert
Posts: 31250
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Wed Sep 16, 2020 9:29 am
They have room to offer a reduction. Indeed, under the Protocol Standard Terms, they can reduce by up to 15% without reference to creditors --- and have more leeway under the Covid 19 Guidance: https://www.gov.uk/government/publicati ... a-protocol

Read through that guidance and put an arguement forward.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

Foz80

Posts: 1
Joined: Thu Sep 17, 2020 9:29 am

Post by Foz80 » Thu Sep 17, 2020 9:42 am
It depends if there is anything specific in your IVA proposal in respect of redundancy. Remember, your proposal takes precedence over standard T&C's, so always look there first.
But if there isn't anything in your proposal then the T&C's are quite clear in that they have to use your take home pay as set out at your last annual review, therefore they can't use your pay from whilst on furlough, unless of course your last annual review has been completed since March 2020. Your IP has no power to change the rules on this.

Foggy

User avatar
Forum Expert
Posts: 31250
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Thu Sep 17, 2020 10:32 am
Thu Sep 17, 2020 9:42 amFoz80 wrote:
It depends if there is anything specific in your IVA proposal in respect of redundancy. Remember, your proposal takes precedence over standard T&C's, so always look there first.
But if there isn't anything in your proposal then the T&C's are quite clear in that they have to use your take home pay as set out at your last annual review, therefore they can't use your pay from whilst on furlough, unless of course your last annual review has been completed since March 2020. Your IP has no power to change the rules on this.
The IP has the discretion to complete an interim review, assuming the usual clauses, as well as the power to reduce the monthly payment by up to 15% without reference to the creditors, again assuming the usual clauses. In addition to this therre have been new Covid-19 Guidelines introduced to allow more flexibility: https://www.gov.uk/government/publicati ... a-protocol
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
http://foggy.blogs.iva.co.uk

lifenoteasy

User avatar
Posts: 3171
Joined: Thu Feb 05, 2015 2:26 pm
Location: United Kingdom

Post by lifenoteasy » Thu Sep 17, 2020 11:41 am
And regarding redundancy:

1.13 The supervisor has discretion, in relation to whether any redundancy payments in excess of six months net take home pay are required to be brought into the arrangement as set out in clause 10.6 during the duration of the pandemic.

1.14 The consumer should be explicitly told that they may have to include an amount that has been paid by way of redundancy into the arrangement in future, if the supervisor decides to use that discretion.

One of other clauses is:

(v) Creditors should be informed of the payment reduction or break as soon as practicable once it has been agreed with the consumer.

Being really cynical, it could be viewed that IVA companies will not want to follow the guidance as it imposes an extra admin burden on them in terms of contact with creditors as well.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
12 posts Page 1 of 1
Return to “Ask IVA Forum and Industry experts”