renegotiating an IVA

[irish_ram]

Hi all,

Was just wondering, I am in an IVA and have been since November last year, since them ny circumstances have changed for the better and i am wanting to either cancel my IVA or instead of the 5 year Term, renegotiate it to try and finish it early. Also my GF is not in the IVA but we have our finances as joint so she puts her money into it aswell, which means i am much better off with amount I can pay. Anyone know my options on this.

Also in terms of cancellation, I feel I have been misold my IVA as most people say its there to protect your assets, but I do not have any assets in my name, so dont understand why that was suggested. Any Ideas

Will prvide more info if needed, cheers

[kallis3]

Hi,

One of the technical experts will be along to give advice on your IVA payments.

I do not think you have been missold your IVA. Whilst it is there to protect houses, cars etc., it is also a way of paying back as much as you can over the term.

You should have had all your options explained to you before you took it out. The only other things you could have done would have been a DMP ( which takes longer and there is no guarantee of interest being frozen), or bankruptcy.

[irish_ram]

Cheers kallis3,

Yeah, to be honest they might have explained it all to me, but the desperation I was in at the time, think i saw it as an easy way out and went for it, which it totally my fault, but now just looking for options.

My worry is, they have calculated it at me owing them 13K in total to finish the IVA which has knocked 5K off debts, but from my meaning of an IVA, if i am able to pay more each month, this doesnt just mean i will pay back the 13K quicker, it means they might actually up the amount I pay back, which in the joob I am in at the moment, means i could end up paying back the full debt anyway which that part i dont mind, but then to me, the IVA is not doing its job as i am paying the dents back full and could do this nyself, and also then be in control of when I wanted to pay Lump sums to them and not be questioned on it

If i have got the wrong end of the stick, please let me know, just my main worry is, I am gonna end up paying them the full debt and also all the fees to IVA people who really didnt ndo anything and got lucky as of my situation when signed up

[kallis3]

To be fair, the IVA people do earn their money. They are the ones who sort out your proposal, put it to the creditors, and then supervise it for the next however many years it runs for. They pay the dividends to the creditors and are there for advice and help when needed, so they do earn their money.

If you let your IVA fail now, all the money you have paid across will probably go across to paying those fees. I believe that your creditors can put all the interest back on that they have frozen so you would owe more.

You will need to talk to your IP and tell him about the change in circumstances and see what he suggests

[irish_ram]

Cheers kallis3,

I think I am just sounding bitter at the fact if I knew then what I know now, I would never have entered an IVA as not for me but I have.

The only real thing I want to clarify is, I pay 230 a month at the moment, if I rang them and said I want to pay say 400 a month as want to pay it off quicker, would they then recalculate what i owe and could end up paying off the 400 for the remaining 5 years in order to pay more debt off, or do they stick to the 13K i owe no matter how much I pay a month.

Also, just as a summary, when I joined the IVA, I was earning 16500 a Year and had a car as an asset worth 3K, now I am earning just over 20K, have sold my car for 1500 to pay back money I owed parents and have had one bonus of 1500 back in june.

So my worry is they will say, i owe them the car sale or portion, also portion of Bonus and now I am earning a few grand more, the payments go up and instead of the 13K i owe, its re-calculated over 5 years with new payments and I end up paying say 16k back.

Sorry for going on, but just want to know exactly what situation I am in before I ring my IP and end up saying something that puts me in a worse situation.

Cheers in advance

[kallis3]

If you have the 50% bonus clause in your IVA, then you will almost certainly be expected to pay some of your bonus across to your IVA. As for your car, I am not sure about that.

If your money has increased, then you will be expected to increase your payments unless your expenditure has increased by a large amount.

You will be expected to pay more back if you can,but you will never pay back more than the original amount borrowed plus the fees.

I doubt if you would be expected to carry on paying after the five years. I've not heard of that happening.

[freelili]

Hi there

At the start of the IVA, your financial situation was investigated and a proposal was put forward on your behalf to your creditors, this was say to pay back 15K over the five year period, then your creditors agreed to write off the remaining debt plus agree fees that the company working for you would earn from it. If your situation changes for the better, then the creditors will not agree to the smaller write off, if you can afford to pay more, you will be expercted to pay more. For the term of the IVA which is 5 years. However if your circumstances change for the worse, then they would (probably) agree to a bigger write off.

In your IVA you are protected from harrassment from creditors, plus no more interest will be added. You were, as we all are, stressed out by debt, this was the tool you chose to resolve it.

I wouldnt be too hasty to end the agreement and I doubt very, very much if they would agree to end the IVA earlier than the 5 year term you agreed to, unless you have a lump sum offer to end it with a full and final. I dont think the car makes any difference, you owned that car, it was yours to sell. (I may be wrong, though).

You may not get a BR order granted for the reasons you have suggested, if you tried that route and I also think that you would be mad to end it to go into a DMP, you would be right back at the mercy of your creditors.

Do you feel any clearer on what you should do or is there anything else we can do to clarify the situation?

Hopefully one of the professional experts will be able to shed more light on this for you.

[irish_ram]

Cheers guys,

It does clear it up a bit, but I owe 18K in total before going into an IVA and including fees and the reduced debt, I am now paying back 13K. But with my wage increase, even if they highered my payments to as little as 330 a month intead of 230 for the rest of the 4 Years, I would end up paying around 17K+ in total which is the full amount of my debt before IVA. However, with the job I am in, I get yearly bonuses of between 1500-2K, a yearly payrise of between 500-1K and good prospects for promotion, so it is very likley my wage will go up, resulting in increased payments and also if they take parts of bonus, I am at the very least going to be paying back the full debt, so exactly what happens when my monthly payments get to the point where I am paying all the debt back and then my wage rises and I can make increased payments, as if I do, then will be paying more back. Is there not a case then where I can just go directly to creditors to pay off quicker, or will my monthly payments either stay at that level for 5 years, or can they increse them and pay off over a shorter time.

One more thing is, if I give them my outgoings, they will be at very least the same if not more now. the reason being is alot of things like rent and bills have gone up, however, i live with my GF, so we split the bills meaning my outgoings are much less in reality, but my GF is not attached to me financially apart from rent and bills, so dont want to get her involved in the IVA, so do I tell the IVA all my rent and bills and not inform them of GF paying aswell, or do I inform then and end up paying lots more a month or even get my Girlfriend roped in to paying for IVA officially?

I know the first thing to do is speak with IP, but once I have told them everything, there is no going back is there.

Cheers again for help

[kallis3]

If your repayments go up considerably so that you end up paying back the whole debt in less than 5 years, then your IVA can conclude earlier.

As Lily says, if you can get together a lump sum, you can offer them a full and final and probably pay less than the original sum.

You will never pay back more than you originally owed.

[freelili]

Yes, I agree with Kallis.

Your girl friend will not be brought into the IVA, they are not her debts, so they will only consider what she pays towards the rent and bills, her money is then hers.

I am sure all companies will be well aware of the rising costs of everything, so dont worry too much about that. IP's are human beings and have to pay the extra on everything too. Its all getting quite scary now that winter is walking up the path, hey?

[irish_ram]

Cheers kallis3,

That clears that up, to be honest I want to end it as quickly as I can, maybe get it down to 2 more years, however I only want offer what I can afford and not include GF finances as that will change everything, my only worry is, if we end up savings say 1K in 3 months after bills and IVA, I would love to ring the IVA and say here is a grand, pay of a lump sum, but Im sure they would then query how I save this as they would know it as mostly my GF money, or could I say it was a gift from a family member and that would be the end of it?

[freelili]

I can so understand how you see this IVA as a millstone round your neck now but you are in a very good position. I doubt that a grand would end it for you though, to be honest. You were insolvent at the begining and now youre doing really well. I would wait for one of the experts to come on line and let them give you more definitive advice for this.

[kallis3]

A family member is allowed to gift you money, but if you can save £1000 in 3 months, then they would query where you had the money from.

There would be no point paying more than you can afford anyway as your IVA would fail. Inform your IP that you can up your payments, sort out how much you can pay, tell them you want to try and finish early and see what they say.

I hope you manage to sort something out.

[Viki.W]

Hey irish-ram, I agree with Jan and Lily, you are in a good position here. I would keep with the IVA as you are protected from the creditors hassling you and adding interest and charges. Increase your payments and pay your IVA off quicker if you can.

[irish_ram]

On your note freelili about my GF contributions. They may only take her contributions to bills and rent in, but thats alot, I mean just taking rent into account, we pay 490, when I joined, I paid 400 rent o my own, so now I would tell them I pay half of 490 which is 245, which is a big drop from 400, so my month amount would go straight up, in terms of bills, thy averaged them at like 20-25 for utility ills but now that would be half that on each bill, so again cost gone down and payment gone up by the looks of it

Also with the family member thing gifting money, that was an example, but on the current IVA payment, wemanage to save about between 300-500 a month sometimes, so it would be a regular family gift if was gonna pay it off, or maybe we just save it up for 6 months and then offer it

Again sorry for the ranting : )