Is there a limit of how much time IP & creditors can add on?

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kirstyandjon
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by kirstyandjon » Wed Aug 16, 2017 1:02 pm
Hi, I set up an iva agreeing to 5 years, with a possible extension of 1 year as our payments were low and probably wouldn't be able to remortgage. My husband changed jobs and I forgot to mention it so they added another year to accommodate extra pay. They now say my husband earned an extra £800 last year even though his job hasn't changed in 2 years?? So they want to add another 6 months. Feels like they are going to keep adding on time forever. Can they do this and is there a limit of how much time they can add on?? Thanks
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Radish
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by Radish » Wed Aug 16, 2017 1:12 pm
I know the creditors can claim all the money you borrowed plus lost yearly interest. On top of this the IP can claim the agreed expenses for managing your debt and setting up the PPI in the first place. From my own experienced I owed £19k and with PPI I must have paid £24k back (or thereabouts) and I still hadn't paid 100% when I received my certificate. I even did the PPI myself, so it all when straight in the pot with nothing taken off (i.e £6 k claimed - £6k in the post)...

If you had a huge windfall - you would pay in full (amount owed + interest + fee's) - anything over that would be yours.
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Foggy
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by Foggy » Wed Aug 16, 2017 1:27 pm
They should not be adding extra time but should increase the monthy payments to absorb increases in income. Why are they so interested in your husbands income -- is he in an IVA alongside you ? Or are you with Payplan ?
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Michael Peoples
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by Michael Peoples » Wed Aug 16, 2017 1:40 pm
I am also curious. If your husband is in an IVA then he would be in breach for not declaring extra income or a change of job. If however, he is not in an IVA, then this is nothing to do with him and your IP has no right to even ask for his income details.

Is he in an IVA or not?
kirstyandjon
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by kirstyandjon » Wed Aug 16, 2017 1:54 pm
We are in a joint iva. So should have mentioned it but completely Forgot!. They can't increase payments as they already take our excess money after bills etc.
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Foggy
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by Foggy » Wed Aug 16, 2017 2:31 pm
"Hi, I set up an iva agreeing to 5 years, with a possible extension of 1 year as our payments were low and probably wouldn't be able to remortgage. My husband changed jobs and I forgot to mention it so they added another year to accommodate extra pay. They now say my husband earned an extra £800 last year even though his job hasn't changed in 2 years?? So they want to add another 6 months. Feels like they are going to keep adding on time forever. Can they do this and is there a limit of how much time they can add on?? Thanks"

OK .... so -- you had a 5 year IVA with payments set to your disposable income as calculated at the time. Was any extension applied at the creditors meeting, or was it accepted at 5 years ?

Husband changed jobs ( which you should have informed them of, so you are on the back foot here and in the wrong ) -- and so his salary changed -- presumably increased. So your payments should have increased by 50% of the increase in his income ... no extension.

The £800 they say earned extra -- is this based on the new income, or is this £800 over the old income when you started the IVA ? How are they saying theis £800 arose? Overtime is treated differently to a permanent payrise --- but, either way you should only need to pay around half the extra into the IVA.

So ... first establish if they are right about this £800 ---- if they are it will be classed as arrears and they can extend the IVA by however many months it takes to repay them. What is your monthly payment ?
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Michael Peoples
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by Michael Peoples » Wed Aug 16, 2017 3:54 pm
Foggy has summed this up perfectly. While your husband should have informed the IP of the new job as it is a change in circumstances, any increase would not normally take affect until the next review and only then after allowing for increased costs of living. Therefore there may not be anything due at all so I suggest you contact your IP directly and ask for a file review and a complete breakdown of where they get the figures from. It is possible that some or even all of this money is not owed.
redboxtree
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by redboxtree » Thu Aug 17, 2017 7:23 am
Also ask for confirmation that creditors have been contacted and they have agreed to this - and if they have why weren't you told.

At the end of the day an IVA company is acting as the representative to the creditors - they cannot extend an agreement without their permission because it forms part of a contract that allows them to be paid for their work.
kirstyandjon
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by kirstyandjon » Tue Aug 22, 2017 8:53 pm
Sorry for late reply been camping with no signal! I really appreciate your replies. I finally got all the original information down from the attic (didn't think I would need to refer to it as didn't realise they could add time on). Apparently 1 of our debts refused 5 years so agreed to 6 years. After the first year my husband worked away for 6 months in same job (which is why we forgot to mention it as was only meant to be 2 weeks, which turned to 2 months then 6 months!) He didn't keep receipts so it has literally taken 2 years to get back to us with this add on as there was a lot of us going back and fore as to weather they would accept certain costs. He is now earning same as originally which is why it's strange that they say we owe them another £800 due to increased income last year. Especially as we have an 18 month old and in the review they said they will reduce our payments from £129 to £100!! They seem to be contradicting themselves. So I have just written and asked if i can have a breakdown of how they came to this as you suggested.

So our iva now stands at 8 and a half years!! Can they just keep adding time on??

It is worded that it's the iva people who are suggesting the additional 2 years so the iva does not fail. "The debtors do not wish the iva to fail and would like to make an offer to creditors in lieu of the income reviews owed". Not that the creditors are requesting it??

Many thanks for your help kirsty
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Foggy
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by Foggy » Wed Aug 23, 2017 8:34 am
It's not that the creditors are requesting it, but the IVA can be failed under it's original terms, if money is, in fact, owed and your IP is requesting them to accept an extension instead. That said, you need to establish if money is actually owed first and they need to prove it to you!
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Michael Peoples
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by Michael Peoples » Wed Aug 23, 2017 9:12 am
Any variation must be agreed by you and if you do not want an extension then tell the IP so. If the payments are to be reduced because of higher expenses and the arrangement has already been extended then personally I would just ask for the payments to be brought down. You dispute that there is any extra money owed but if creditors seek a further extension then you have the option of accepting this or refusing so I would not offer something at this early stage.
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