6 Months in and are in major trouble

[poxy]

If there are 7 months payments to date there would be no money to offer a settlement as it is unlikely that the fees and costs have even been met. However, the bankruptcy route is not as bad as you think as you are confused about the 15 year rule. Bankruptcies tend to last for 12 months but in extreme circumstances can be extended for up to 15 years. This only applies where there are almost grounds for jail and should not affect you at all.

Give the bankruptcy option a bit more consideration and speak again to your IP. I am sure they would be appalled if they thought you were so confused about bankruptcy after 7 months in an IVA.

Is there somone we can talk to about BR ? they gave us information on there sister company baker evans who wanted some extreme fees for there service in helping with BR. Say the BR last 12 months and then after that it is finshed. say 6 months later i land on my feet with a top job etc can anyone still come after me.

[Michael Peoples]

There is no need to pay fees for bankruptcy advice although there are many reputable firms who will assist you through the process for a fee. I am sure most of the contributors on here would give you some advice and there is also a sister site of iva.co.uk called bankruptcyhelp which is full of advice, contributors and tips.

If you are discharged from your bankruptcy there is no comeback even if you sunsequently win the lottery. While bankrupt there is a windfall clause such as that in an IVA but this expires the moment the bankruptcy is over.

[poxy]

I have wrote the letter below and would like to know if this letter is ok or is there anything else I need to include

Dear Sir/Madam

Further to out telephone conversation I would like to formally offer a lump sum payment of £5000 as a full and final settlement of my current IVA.

My Partner () has now has to give up work to look after our daughter full time as her mum who was looking after her has decided to go back to work and this will mean that I will be unable to maintain my current IVA payments due to loss of income.

As you are aware we went through our income and expenditure this morning (12.01.10 @ 9.10am) and after this have identified that the IVA is no longer feasible as there is no money left to pay any amount. I can only assume that my house is in negative equity as the house along the road from us is up for sale at £100k (100% owned) and our is shared ownership were we only own 70% which would give our house a valutation of around £70K meaning that with the mortgage outstanding leaves us 14K negative equity.

We have also taken advise about Bankruptcy from the citizens advice bureau and are considering this as a option, however we would like to offer this money instead of offering knothing at all.

I will continue to make my monthly payment until the end of Febuary and then offer the lump sum and conclude my IVA.

The lump sum of £5000 is coming from my Brother and Dad Jointly on the understanding that it is only available if used to conclude my IVA.

Would you please arrange a variation meeting and put this offer to my creditors.

yours sincerely

Poxy

I would be greatful for everyone's thoughts

[Michael Peoples]

Your letter seems fine and make sure that any monies are not paid until you receive confirmation that your variation has been approved. If rejected or your IP does not put the variation forward bankruptcy seems the only realistic option and anyone here can help you. Hopefully it does not come to that and best of luck.

[MRBLUESKY]

looks ok to me good luck.

[kallis3]

Sounds good to me poxy.

Good luck with your offer - hope to see a positive post from you soon.

[MelanieGiles]

What a shame that your IP felt that they could not help you with bankruptcy advice, but instead referred you to an associated company who then wanted to charge a fee from someone who was demonstrating a major deficiency in income.

Your letter is fine and you must insist that your IP puts forward the offer on your behalf. If this was my case, I would not be looking to charge any more fees in order to help you make the best offer to creditors.

[poxy]

Thanks to all of you for your support once again.

Melanie they have said they will put my letter forward, but can I ask in your experience do you feel I have a chance of accpetance ?

Regards

Engin

[ashb]

Hello and I have a question for the experts

Why suddenly can the payments increase by so much. I am in my first year and have not yet had a review but I hope that when that happens I too dont get a different amount demand much more than when I agreed the budget I could live on. In my case nothing much has changed in my living expenses and if so they have gone up

thanks

[kallis3]

Your next years payments will be based on your latest I&E submitted when you do your review, so do make sure you put accurate figures down. If things have gone up, then say so.

Even though I had had a payrise before last years review, we were able to show that our expenditure had increased and so our payments remained the same.

[MelanieGiles]

Payments should only increase if the figures you provide to your IP indicate that you can afford an increase - and if your IVA is with a good IP firm you will probably find that you only have to pay 50% of that net increase in any case.

Poxy - I think that your offer has a good chance of acceptance, especially if your IP makes it clear that you will be petitioning for bankruptcy in the event that it is not accepted - where creditors will not receive a sausage! Good luck and let us know how you get on.

[lisa18]

The first months of the IVA are generally difficult due to you have to make certain sacrifices in your spending habbits. 60-80 on a mobile phone contract is excessive. Why did you enter into such i high tariff when you knew the allowance for the ccs guidelines, to have a contact this high you will need to take the funds out of the house keeping otherwise your creditors will not find this acceptable. Ask your IVA manager for money saving tips and budgeting advice. If you are struggling now ask yourself have your circumstances changed. If you are earning additional monies then have you informed your IVA manager of updates on your increases in expenditures as this can be offset each month by the amount your expenditure has increased. Items such as a boiler if you are earning extra money to pay for this keep hold of your reciept as this will be able to be offset when your six monthly review is looked at keep hold of all receipts as this why you have accrued additional monies as you need to make your manager aware that you are having to spend extra. Generally the 10% allowance is used in new cases such as yours so check your original proposal when the meeting was set up and also your modifications if you had any. To confirm what additional money scenario you are on you can obtain your modifications and original proposal from your IVA manager, so request this to be sent out to you. However this does only account if you have earned over time bounus or commission if you have had a basic wage increase within the first year it will go by the 10% allowance after the 1st year it is a staight flat 50% of any BASIC WAGE INCREASE you get, only when your disposal income increases will you be expected to introduce additional money and bare in mind you get to keep 50% of it. Get into the habbit of ringing your manager up every month to introduce the extra that way a lump sum will not accrue.
If you and your wife split up your can split the IVA consult your IVA manager for details.

If you have had a change in circumstances I.E reduction in wages or increases in rent or essential expenditure you get go back to creditors by way of a formal variaiton to the proposals you request to your creditors that they reduce the monthly contributions however this more than likely results in an extension on the arrangement to ensure your creditors received a similar return.

Full and final settlement you can look at possibly doing this again this would involve a variation to your creditors and does not gurantee they will except it. The changes of your creditors accepting this proposal depend on how close you get to the original figure, ideally you need to be suggesting a dividend return of at least 20p in £, unless you have had a drastic cic such as being made redundant. The IVA is difficult every penny is accounted but bare in mind the amount of debt you are getting written off and it can be alot easier than bankruptcy.

[poxy]

Evening Everyone,

****UPDATE*****

B&E have now drafted a report to send to our creditors for a f&f payment.

We just need to sign and send back to them for the meeting to be setup. After all that has happened I feel slightly better and hopefully the creditors will accept the offer we have put forward via my brothers gift. We have given all the proof that was needed to back all our claims and its shows a minus of £97 at the end of the month so the creditors can still say no as its up to them but if they do they will get knothing so fingers crossed and I will let you al know the out come.

Regards

poxy

[kallis3]

Good luck poxy, I have everything crossed for you.

[lukeofyorkshire]

Good luck Poxy, I have my fingers and toes crossed for you!!