IVA and rent

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rhythmb
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by rhythmb » Wed Dec 12, 2018 5:51 pm
When my IVA was first approved I told them my rent was £400 a month. I live with my parents who said that if I gave them £500 a month the spare £100 would be put in their savings account for emergencies etc. Is this allowed? I earn enough to live comfortably after the £500 payment and iva payment. Will they query why I'm paying £500 when it comes to review?
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Foggy
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by Foggy » Wed Dec 12, 2018 6:05 pm
Yes they will possibly query it and no, it is not allowed. If the rent IS £400 that is what you should have declared and you have understated your disposable income. Thisd is compounded by the fact that you can still live "comfortably" while effectively saving £100 per month. Your pledge, in return for creditors agreeing to forgive a good portion of your debts to them, was to pay back as much as you could reasonably afford.

If they do not notice it at this review, there is always the chance they could at a future review, or, indeed, during the final review when they often re-visit old reviews before completing the arrangement.
rhythmb
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by rhythmb » Wed Dec 12, 2018 8:05 pm
So would that mean they could ask me to keep my rent at £400 and pay that £100 into my iva?
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Foggy
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by Foggy » Wed Dec 12, 2018 9:11 pm
They could do --- as well as ask for the "missing" £100 per month back. It is difficult to say as what happens will depend on what they discover / if they discover and when they discover. Also depends on how it was actually presented to them / how you have accounted for the £100 monthly in your budget.

At the end of the day, the fact that you have £100 "spare" each month to squirrel away would / should raise the alarm and point to the fact that your budget is incorrect. Most in an IVA, especially at the start, just make it to the end of each month without being able to save anything at all as all surplus should be paying the debt.
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Lisa Thomas
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by Lisa Thomas » Thu Dec 13, 2018 12:04 pm
You have declared rent of £400 in your proposals - anything higher will be challenged by your IP and you could be at risk of failing your IVA.
rhythmb
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by rhythmb » Sat Dec 15, 2018 7:50 am
Should I call them and tell them what I'm doing or just start paying £400 rent and tell them whenever my review is if they pick up on it?
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Foggy
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by Foggy » Sat Dec 15, 2018 11:13 am
rhythmb wrote:
Should I call them and tell them what I'm doing or just start paying £400 rent and tell them whenever my review is if they pick up on it?


We cannot tell you what to do -- that is for yourself to decide given that you know your own moral compass and all of the rest of the picture that we do not. Personally I would pay the rent as declared and not go poking sleeping bears unless I needed to. Your I&E might need to be adjusted at review --- I am curious as to how you are funding this extra £100. Do your parents, for instance, feed you more than you buy your own food and groceries? If so, you can make modest savings, but a regular £100 is pushing it.
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