Can an IVA be extended?

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

jon327

User avatar
Posts: 3
Joined: Mon Jul 19, 2021 12:26 pm

Post by jon327 » Mon Jul 19, 2021 12:27 pm
Can IVAs be extended to 126 Months even though all my payments are up to date and I have never missed or had a late payment?

Foggy

User avatar
Forum Expert
Posts: 32769
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Mon Jul 19, 2021 12:51 pm
Is that a typo ? 126 months ?

They can be extended, but for legitimate, and explainable reasons. The most often is by 12 months if equity cannot be released (for homeowners).
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

luluj

User avatar
Forum Expert
Posts: 11157
Joined: Sun Dec 09, 2007 6:54 am
Location: United Kingdom

Post by luluj » Mon Jul 19, 2021 8:12 pm
If you have fulfilled your obligations of the original term of your iva, complying with any additional payments as they arose your iva should cease at the end of the prescribed term - normally 5 or 6 years depending on whether you own your own home or not and whether the equity needs to be considered.

At most IVAs extend 12 months normally to allow for equity to be covered.
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"

jon327

User avatar
Posts: 3
Joined: Mon Jul 19, 2021 12:26 pm

Post by jon327 » Tue Jul 20, 2021 8:49 am
Mon Jul 19, 2021 12:51 pmFoggy wrote:
Is that a typo ? 126 months ?

They can be extended, but for legitimate, and explainable reasons. The most often is by 12 months if equity cannot be released (for homeowners).
This unfortunately is not a typo,
I emailed them to ask the reason and got this reply, (Tried to release equity but mortgage company denied application)

Thank you for your email.
Your original term of IVA was 60 months and this has already finished in October 2020. As we were unable to collect all the necessary payments and deal with the outstanding obligation during original term- it has been extended to 129 months.
This means that we have until April 2025 to finish your IVA. Should your payments concluded before this term your IVA will finish then.
As you correctly noticed should you continue to pay for the full extension term you would have over paid. Maximum amount you can pay during term of your IVA is 100 pence in a pound. This means that for every pound you have borrowed you will return pound to creditors. This also includes fees and disbursements to IVA. Should you reach this amount before the end of the extension you will not need to contribute anymore. We can ask for exact figure to be calculated to let you know how much you still need to pay to complete your IVA.
Please do let us know if you would like this to be done ?
Kind regards


How can they set a term of 126 months and not be sure how much is outstanding, I have so far paid off 75% of the original amount of the debt and if this continues for the they have set I will pay off an extra £6500.

How can this be right?

Cheers,

Foggy

User avatar
Forum Expert
Posts: 32769
Joined: Fri Dec 17, 2010 11:14 am
Location: United Kingdom

Post by Foggy » Tue Jul 20, 2021 9:56 am
So -- your original IVA was for 60 months, with the usual clauses to attempt to release equity or, if unable to do so, extend by 12 months ??

When the IVA came to term in October 2020, equity had not been fully addressed, it would seem. You attempted to remortgage, and were refused. So, the IVA should have been extended by a further 12 months instead.

As things currently stand, the IVA is still continuing and you can either catch up the missed payments from October and then continue until October 2021, or, it seems, they will be agreeable to you starting that extra 12 months now, so the IVA payments would continue until August 2022 ( plus the usual 6 months admin period -- so technically it will end around 6 months after that final payment in August 2022. Which makes it February-ish 2023).

Their email does not, in any way, shape or form, explain why they have used these dates, or what the exact nature of the "necessary payments and deal with the outstanding obligation during original term" they refer to.

I would make a formal complaint, asking for a full and meaningful explanation.
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

jon327

User avatar
Posts: 3
Joined: Mon Jul 19, 2021 12:26 pm

Post by jon327 » Tue Jul 20, 2021 11:17 am
Thank you for the excellent advice, I am now waiting for the final amount from them and an explanation as to why they don't have this figure to hand.
I haven't missed any payments whatsoever so would expect the IVA to finish in October 2021. I have told them this in my latest email.
Thanks again, I will let you know the outcome as soon as I have one. Have a great week, Jon.

Financial Wellness

User avatar
Industry Expert
Posts: 136
Joined: Wed Oct 12, 2011 3:21 pm
Location: United Kingdom

Post by Financial Wellness » Wed Jul 21, 2021 2:11 pm
Hi Jon327,

Thanks for the posts. I have asked a colleague to get in touch to explain how we’ve got to this point in more detail – I am sorry if we have left you confused.

During the original term of your IVA your income increased but your monthly payments weren’t being updated by a regular updates to your circumstances each year (income and expenditure reviews), although given the opportunity to do so. This resulted in a build-up of a considerable amount of ‘additional monies’ during the original term of your IVA which, as it stands, you will need to pay in to your IVA to complete successfully. The amount of additional money only became apparent when you provided your outstanding proof of income in August 2020 and we discussed it with you last September. If you can evidence that your expenditure also increased, then we may be able to offset that against the additional monies that have built up.

To give you time to pay the additional money into your IVA, and bring it to a successful conclusion, we asked your creditors for a variation to extend the term. Whether or not you need all of that time will depend on how much you can now afford to contribute each month.

As yet, we don’t have all the documents we need to assess whether you have equity that is due into your IVA. If equity is available and you are unable to release it via a re-mortgage, then your IVA would be extended by 12 months. This potential extension has also been factored into the term extension.

There is a possibility that the current additional money due to paid in, plus the amount in lieu of your equity, will potentially bring you to the 100p / £ point (i.e. where you have paid back all of your original debt, plus fees and interest). How quickly this happens currently depends on the payment you can afford going forward and how soon we can assess the equity in your property and get up to date information regarding your current circumstances.

As I said, we’ll be in touch to explain this fully, review your income and expenditure and provide you with a detailed breakdown.

I hope this helps.


Ian
A member of the team at Financial Wellness Group (Formerly Freeman Jones ) - www.financialwellnessgroup.co.uk
7 posts Page 1 of 1
Return to “Ask IVA Forum and Industry experts”