Following recent copy of my quarterly payslips to PayPlan as per the terms of my IVA (I am 20 months into a 5 year IVA) I immediately received a Protocol Payments letter demanding a one-off payment (about £1K) and that I have 14 days to do this. No other explanation.
I accept I was paid a small bonus before Christmas and had some tax rebated over this time due to over-payments, but I have the following issues:
1) During the first year of my IVA I became out of work without income but my payment schedule was not adjusted or suspended. After regaining work I finally (and with much difficulty) repaid the full arrears due, albeit I was given some time to do this.
2) Due to changes in my income and circumstances, I completed revised I&E forms last year which showed significant reduction in my disposable income which continues today, compared to the original IVA calculation. The was effective from July last year, but again no reduction in my payments was offered although the I&E calculation showed that I could not afford the original payment schedule.
3) A 15% reduction in my monthly payments has finally been agreed effective 1st Jan this year but this is still above what I can afford (in summary, my monthly payments were originally £755, my disposable income fell to £500 in July 2011 and my schedule payments have just been reduced to £640, all figures approx).
My concern is that as I have maintained payments to date at a far higher level than I can afford as per revised I&E calculations, should there not be some consideration of this in the recent demand, especially as I suspect some of the payment calculation might be due to tax overpayment (although as stated there is no explanation of the figure given in the letter).
Unsurprisingly I'm really struggling with this IVA and am seriously considering my options as it has not worked for me and been a real worry. This extra payment demand feels like the last straw. Any advice or comments would be greatly appreciated.
Without knowing the full facts of your case, I'll share my initial views with you:-
1 Did you ask if you could make reduced payments or take a payment break whilst you were out of work? If not, your IP would have been unaware of your difficulties and less likely to allow a retrospective adjustment. How did you manage to keep up with your payments during this period?
2 Your IP should have questioned the reduction in your dispoable income and enquired how you were going to manage to make the payments moving forward. It is up to you to ask for a payment reduction, rather than your IP suggest one - but some talk should have ensued if it was obvious that your disposable income had reduced.
3 You should ask your IP to call a variation meeting to see if creditors would be prepared to accept a lower sum. Your IP only has discretion to reduce your payments by up to 15%, but it is fairly clear that if your DI is only £500 then you could not afford to pay £640!
You are right to be concerned, and if I were your IP I would be taking all of these things into consideration - however you have a duty to keep your IP informed of changes in circumstances as they occer and not retrospectively. Ask them to provide you with details of their calculations, and try and arrange a chat with your IP directly if you still have concerns about the way your case has been handled. IVAs need to be fair to all parties, and not just to your creditors.
Hi Daniel, without knowing all of the facts it is difficult to comment on your post. I would recommend that you contact your case officer as soon as you can and run through all of your queries with them. Alternatively you can contact me directly and I can look at this for you.
Regards
Nick
Hi, my name is Nick Payne and I am an Insolvency Practitioner with Payplan.
Read the Payplan blogs by visiting our website www.payplan.com
It is always best to keep your IP informed of any changes to your circumstances and if somthing isn't working for you, it's up to you to be pro-active and initiate discussions with your IP. Simply keeping hold of additional monies which are due in full or in part to the creditors to resolve problems yourself isn't good.
I've often 'overpaid' myself but wouldn't dream of witholding my bonus to offset this. Payplan are within their rights to request a % of this and any other additional monies you have received over the past year.
Thanks for your comments on this all. It's of some relief to have found this forum and I'm sure I will need and continue to seek further help and guidance this way.
Some clarification on my original post:
1) I have always kept PP informed and up to date on my circumstances and have regularly communicated with my CO via email and phone giving precise details of my change of circumstances, never doing this unduly retrospectively.
2) The reaction to this has always been that reductions in my payments would not be considered or possible, despite the difference between my disposable income and the original payment calculation (although payment breaks were given as previously stated, but the arrears have always been based on the original schedule).
3) There was no deliberate intent to withhold monies (I was conscious that my payslips would identify the small +ve payment differences), but not unreasonably I anticipated the fact that I had been paying payments for so long above my revised disposable income that this would be taken into account (which my CO had indicated would happen during previous discussions on this).
4). I've managed to maintain the payment schedule due to negotiating payment delays/instalments on my utility bills/council tax and trying to reduce my other expenses, plus assistance from friends has helped too but it still has always been a struggle.
5) I will of course ask PP to provide a breakdown of the extra payment calculation and will respond to the letter as I have here, but I was keen to get your comments first.
6).I will also ask again for a variation meeting (which has always been resisted by PP previously..).
Thanks again for your comments all. If there’s anything you can add based on the above then by all means please post your comments (and Nick, thanks for your offer of help, I may be in contact separately in due course..).
I am sure that Nick Payne will be able to deal with the points yoy have raised directly - particularly in addressing your actual affordability of the payments and why your own particular circumstances do not appear to have been taken into account, and also why direct access to your IP appears to have been denied.
Give him a chance - he is a great guy and is bound to want to put things right.
