Review / monthly payment

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MrMeC

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Post by MrMeC » Mon Dec 02, 2019 8:00 pm
Hi,

I've had my yearly review and budget expenditure - my payment has decreased but not as much as expected and I'm wondering if there's a limit set on what the monthly can be reduced by? I can't see anything in my agreement.

My expenditures have increased on 2 areas - gas increase of £88 and school dinners of £68 (losing free meals for both kids due their year of class), there's also my pension which as of April this year increased from 2% to 5%, resulting in £65 less net wage (my iva class this within the budget as deduction from source).

Since starting my iva (this should be my final review) I've always had increased monthly payments each year due to wage increases - which is fair and I've never questioned it.

Yet with my expenditure increase for this coming year and no increase with incomings I was expecting a larger decrease of £65 - this barely covers the loss of my net wage due to the increase in pension took out my wage, which happened to everyone within a private pension.

The calculation of getting to my monthly payment is fairly simple and with my new budget I worked out the payment being £190 less - I assumed the IVA wouldn't like reducing it by this much so wasn't expecting it, but £65 less I just can't work out? Is there a limit?

It seems they'll happily increase monthly payment when they notice a wage increase - again I agree with it and no argument from me - but it doesn't seem to decrease in line with a bigger expenditure.

Any ideas? Can I question them on it?

Foggy

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Post by Foggy » Mon Dec 02, 2019 8:27 pm
The IP has the discretion to reduce the payment to a level up to 15% below the initially calculated payment on day one (assuming you have the usual clauses) . Any more and the creditors have to be consulted --- they may say yes, they may not. In a nutshell though, you will be going to them and saying " I cannot afford to pay more than £xxx" --- if they do not accept the reduction they could then fail the IVA on the grounds that you have stated that you cannot afford it.
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

MrMeC

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Post by MrMeC » Mon Dec 02, 2019 8:53 pm
Thanks for the response Foggy.

My current payment compared with my initial payment in 2016 is £180 more and that's never been a problem., because expenditure has been fairy consistent.

But with my expenditure increasing for next year I can't see how they've come to a reduced payment of £65 less.

Isn't the calculation always going to be the same on every yearly review on how to get to what I can afford? Income - expenditure + partners share of bills.

I've worked out how they got to my current monthly payment, so swapping out budget amounts should give the new monthly, yet it's way off.

Feel like if I question it then, as per what you said, it'll default my iva, which I don't want, but on the other hand I don't get how the they can seemingly pluck a random payment amount and no questions can be asked 😕

Foggy

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Post by Foggy » Tue Dec 03, 2019 7:53 am
You are always free to question how they arrived at that figure --- just do not formally tell them that you can't make the payment via a variation meeting.

Unfortunately, you (we) are very much at the whim of the IP and, I have found, that, as you mention, increases in the payment are very quickly implimented, whereas you have to fight tooth and nail for any decrease ! I fear many modern day IPs work for the benefit of the creditor over that of the debtor ( but to go down that route will start me ranting about my conspiracy theories about the big boys taking over the playground ! ).
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

MrMeC

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Post by MrMeC » Wed Dec 04, 2019 11:58 pm
Couldn't agree more!

I'm still awaiting a response from IP after asking about the figure.

Quick question if I may - there's this paragraph in the budget review, which could have a bearing on the calculation they've used - "You’ll also notice an area of your budget called the net surplus adjustment. Under the terms of your IVA, you’re allowed to keep 50% of the difference between the IVA payment last agreed by creditors and any increased IVA payment."

What is meant by this part - the IVA payment last agreed by creditors and any increased IVA payment? Is the IVA payment last agreed by creditors the initial payment when the IVA started? Or do the creditors agree the payment (with the IP) on every yearly review?

Foggy

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Post by Foggy » Thu Dec 05, 2019 7:47 am
Creditors agree the yearly agreed amount by accepting the IP's annual report.
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

Lisa Thomas

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Post by Lisa Thomas » Thu Dec 05, 2019 9:09 am
Unless there has been a formal variation meeting to accept any change in your contributions then the last payment agreed by creditors would have been whatever was agreed to in your original proposals and modifications.

The IP has certain discretion to alter the figure (depending on your terms and conditions), which does not require creditor approval.

Foggy - I am not sure what you mean about creditors accepting the Supervisors APR? The report is simply a disclosure report - there are no resolutions for creditors to accept or object.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk

Foggy

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Post by Foggy » Thu Dec 05, 2019 9:17 am
What I mean, Lisa, is essentially what you said, but put in a nutshell. At the outset, the terms and conditions give the IP the authority and, to some extent, the discretion to alter the payments within those terms and conditions. So, under that authority, the revised payment is agreed by the creditors as and when it is revised.
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

Lisa Thomas

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Post by Lisa Thomas » Thu Dec 05, 2019 9:44 am
Thank you for clarifying Foggy.
I'm a licensed IP with 16+ yrs at Neville & Co covering the South West area. I have a YouTube channel with advisory videos on here: https://www.youtube.com/channel/UCMPTTu ... Z5k9ZcC2MA http://www.nevilleco.co.uk 01752 786800 Lisa@nevilleco.co.uk

MrMeC

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Post by MrMeC » Thu Dec 05, 2019 12:15 pm
Thanks both for the replies ☺️

I think this is where the discrepancy lies with my new monthly - last year when working out my monthly they used my initial payment when my IVA commenced to work out this surplus, in which I'm allowed 50%. Yet this current one they've used my current monthly amount, which is £180 more, so the surplus would be lower, making the monthly more.

I've queried it with them; either they got it wrong last year or got it wrong this time...

kallis3

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Post by kallis3 » Thu Dec 05, 2019 1:27 pm
Hopefully they will get back to you with a definitive answer soon.
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.
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MrMeC

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Post by MrMeC » Thu Dec 05, 2019 11:38 pm
I've found my previous previous budget review, low and behold they've used my initial agreed payment to work out my surplus on that one too.

They've also gone quiet on the email front.

Unless somethings changed (surely I'd need to agree on it?) then they've incorrectly used my current payment this time to work out the surplus, not the initial.

I'm hoping, seeing they're supposedly here to help folk, that it's a genuine mistake.
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