Can I request a variation on my IVA?

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stephen715
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by stephen715 » Tue Apr 24, 2018 3:23 pm
I have completed 6 years in an IVA . I am aged 66 and receiving State Pension , and small private pension. I have no seperate earnings. Due to significant changed circumstances , there is substantial negative surplus in my Income and Expenditure statement , therefore negative affordability for IVA . Supervisor proposes extending IVA to 7th anniversary , but am unable to make the payments. Should I request a Variation , conclusion or winding-up of IVA ? What is the likely outcome ?
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Foggy
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by Foggy » Tue Apr 24, 2018 3:57 pm
stephen715 wrote:
I have completed 6 years in an IVA . I am aged 66 and receiving State Pension , and small private pension. I have no seperate earnings. Due to significant changed circumstances , there is substantial negative surplus in my Income and Expenditure statement , therefore negative affordability for IVA . Supervisor proposes extending IVA to 7th anniversary , but am unable to make the payments. Should I request a Variation , conclusion or winding-up of IVA ? What is the likely outcome ?


Why is your IP suggestibng a 7th year ?
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stephen715
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by stephen715 » Tue Apr 24, 2018 4:54 pm
Foggy wrote:
stephen715 wrote:
I have completed 6 years in an IVA . I am aged 66 and receiving State Pension , and small private pension. I have no seperate earnings. Due to significant changed circumstances , there is substantial negative surplus in my Income and Expenditure statement , therefore negative affordability for IVA . Supervisor proposes extending IVA to 7th anniversary , but am unable to make the payments. Should I request a Variation , conclusion or winding-up of IVA ? What is the likely outcome ?


Why is your IP suggestibng a 7th year ?

One of creditors, Grant Thornton, entered Standard Modification "a maximum of twelve monthly contributions beyond the 60 month term at the same level as paid in the fifth year of the Arrangement " . I am unable to re-mortgage due to age and low income , although there is equity in the property. We are already beyond month 72 of the arrangement.
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Foggy
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by Foggy » Tue Apr 24, 2018 5:08 pm
OK -- so you effectively had a 6 year IVA with an extension for equity ?

Has the IP done a review since the change in circumstances ? Is he / she aware of the drop in income ?

You can propose a full and final offer based on payments made to date, but this can take a few months to process, so try to agree a payment breal with your IP in the meantime. My IVA became unaffordable about halfway through my term and the creditors accepted this arrangement in my case and basically called it quits. I have to warn that they are not bound to accept and the IVA could fail if you cannot continue payments and they do not agree to the variation.

Have a chat with your IP.
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stephen715
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by stephen715 » Thu Apr 26, 2018 7:17 am
stephen715 wrote:
Foggy wrote:
stephen715 wrote:
I have completed 6 years in an IVA . I am aged 66 and receiving State Pension , and small private pension. I have no seperate earnings. Due to significant changed circumstances , there is substantial negative surplus in my Income and Expenditure statement , therefore negative affordability for IVA . Supervisor proposes extending IVA to 7th anniversary , but am unable to make the payments. Should I request a Variation , conclusion or winding-up of IVA ? What is the likely outcome ?


Why is your IP suggestibng a 7th year ?

One of creditors, Grant Thornton, entered Standard Modification "a maximum of twelve monthly contributions beyond the 60 month term at the same level as paid in the fifth year of the Arrangement " . I am unable to re-mortgage due to age and low income , although there is equity in the property. We are already beyond month 72 of the arrangement.

Referring to the Standard Modification , the 60 month term has now elapsed, ( now at month 72 ) therefore a further 12 month contributions would be double-counting and excessive. The duration of the IVA arrangement ( from April 2012 ) was for a maximum of 64 months ( to August 2017 ) plus a further 6 months for any final administration or realisation ( to February 2018 ) . Whilst there has been a reduction in arrears below £2000 , the further extended duration is excessive and punitive. Should I request the IP for a Variation ?
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Foggy
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by Foggy » Thu Apr 26, 2018 8:20 am
I am afraid the modification proposed by creditors at the meeting overrides that wrtten in the proposal. It is pretty much standard in a 6 year IVA to extend again for equity release purposes. The first modification was to increase dividend and the further extension to compensate for non-release of equity .Theyy are for different reasons and not double counting. I can add no more to the comments in my post above.
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stephen715
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by stephen715 » Thu Apr 26, 2018 8:31 am
Foggy wrote:
I am afraid the modification proposed by creditors at the meeting overrides that wrtten in the proposal. It is pretty much standard in a 6 year IVA to extend again for equity release purposes. The first modification was to increase dividend and the further extension to compensate for non-release of equity .Theyy are for different reasons and not double counting. I can add no more to the comments in my post above.

However there was only 1 modification i.e to extend for 12 months AFTER month 60 . The IVA was from April 2012, 64 months plus 6 months . Now beyond 72 months ??
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by Foggy » Thu Apr 26, 2018 8:53 am
stephen715 wrote:
Foggy wrote:
I am afraid the modification proposed by creditors at the meeting overrides that wrtten in the proposal. It is pretty much standard in a 6 year IVA to extend again for equity release purposes. The first modification was to increase dividend and the further extension to compensate for non-release of equity .Theyy are for different reasons and not double counting. I can add no more to the comments in my post above.

However there was only 1 modification i.e to extend for 12 months AFTER month 60 . The IVA was from April 2012, 64 months plus 6 months . Now beyond 72 months ??



Yes, the modification was to add 12 months. But there is also a clause to release, or attempt to release, equity and if unable to do do extend by 12 months in lieu of equity release -- this is what is being triggered now.

Your IVA was proposed to run for 60 payments (plus 6 months admin time) with the potential to have 12 months added for equity --- so would actually have run for 72 months (plus 6 months admin time). This was modified by creditors to run for 72 payments (plus 6 months admin time), still with the potential to have 12 months added for equity. So the IVA, if left to run its natural course will run for 84 payments (plus 6 months admin time).

As mentioned in my post above, you can propose a variation based on payments made to date.
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