our iva is up for its annual review soon,but we got a lumpsum of 9k awarded to my wife last september(backpay),which we thought they would only need 50% of,we had planned to keep that set aside for the iva but between one thing and another its all gone now too!It wasnt wasted but spent on kids needs,house repairs,car repairs etc,our problem is knowing what to do now??Advise greatly accepted ,thanks
Are you saying that you have spent all of the £9k without clearing the need for the expenditure you have incurred with your IP at the time you were spending it? Surely your proposal required these funds to be paid into the IVA within 14 days of receipt?
Hi Kev. Welcome to the Forum. I'm no expert, but would assume all/most IVA's would stipulate that the IP needs to be informed of additional funds. The only thing I could really offer is that you contact your IP asap to declare the funds, as it will show up somewhere eventually anyway. I think it's a case of damage limitation - provide evidence of necessary/essential purchases made, which at least shows you didn't just squander the 9k. I wish you well with moving forward with this.
IVA journey started: 30th March 2009. Settled: 17th July 2012. Completion Certificate received: 13th March 2013. Breathe. x
Hi there, this is more of a question for the experts such as Melanie, the answer might be of some use though. If Kev were to come clean to his IP, explain what had happened, could and would his IP agree to some sort of extention to make up the funds rather than fail his whole IVA?
This depends on the actual proposal itself. It is likely that the money should have been paid to the IP within 14 days of receipt as Melanie mentioned so creditors may not be too happy. This would be an automatic breach of the arrangement and another meeting of creditors would need called.
Given the amount of money involved creditors may not be sympathetic especially since Kev's wife was able to keep £4500 for herself but they proceeded to spend the lot. Had it been a small amount and urgently needed creditors may agree to an extension to recoup it and the IVAs could move on.
I would not like to prejudge what the IP or creditors may say but bankruptcy proceedings could be instigated depending on who the creditors are and what their view will be.
Oh dear, that is serious. Kev doesnt say how far into the IVA he is? Could this make any difference? For instance if he was only going into his 2nd year or if he was going into his 6th year?
To go against the grain slightly, how is your IP actually going to find out about this ?. I know every IP is different so I'm guessing perhaps you only have to provide payslips once a year as opposed to mine where I have to supply my payslips every quarter ?.
I know it's 'wrong', but if for some reason this payment is going to stay 'under the radar' unless you tell your IP about it then why not
simply say nothing and see what happens ?.
I'm on course at the moment to pay back in excess of 100% of my original debt (obviously there are fees on top of the original debt). During the time I've been in my IVA there's been times when I've had unexpected expenditure (e.g. the occasional parking fine) or additional expense (my girlfriend moved in with me and could only afford to pay £50 a month less than my previous tenant, meaning I am £50 worse off every month) or other outgoings (parents short on cash due to cost incurred ferrying sick elderly relative around on a daily basis so I gave them £50 a month for several months) and I've never once contacted my IP about any such additional expenses or asked for a reduction in my payments.
Equally during the same time on a couple of occasions I've received refunds from the electricity company for monthly direct debit overpayments, or small cash presents from family members for birthdays etc, and nor have I gone running to my IP to declare that either.
For me it's all about give and take. Perhaps I'm fortunate in that I have a good job that will ultimately enable me to pay off such a high dividend of my original debt.
I would never encourage anyone to 'hide' a windfall received. Ok it's been received and it's been spent but deal with it directly with your IP now to work a way forward. A relationship of trust should be built up with your IP as these things often have a habit of coming back and biting us when we're least expecting them!
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
The vast majority of us will have the £500 windfall clause so anything paid back from your utility companies or small gifts from relatives will be ok if it doesn't go over that.
£9k is a bit different though.
Kev needs to speak to his IP as soon as possible about this.
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. http://kallis3.blogs.iva.co.uk
I was in a similar situation to you last year, albeit not quite £9k! I used my £1800 bonus to buy essential items without my IP's permission. However it was a case of using my bonus or going bankrupt that's how bad it was! Understandably my IP was incredibly annoyed with me that I hadn't ok'd it with them, I think if I had done this in the first place then they would have probably let me keep all of the bonus. Luckily my IP is not a monster, I got a telling off (I deserved it!) but they waived the bonus as they could see I desperately needed it.
If you can prove that you needed this money so badly then hopefully they may be sympathetic to you, although £9K is a hell of a lot of money to justify. Good Luck
Posts like this often frustrate me, as the rules are made pretty clear from the outset and there can be no misunderstandings about what is needed.
This will get picked up by the posters IP, as we review wage-slips at the end of the year as part of the annual review. Had the poster asked for permission to use some of the money, then it might be a different story now. All I can say here is that I hope there are good reasons for this additional spend. I come down firmly on my own clients when this happens, as there is no excuse for it - and most IPs are pretty sympathetic if there are reasons to justify the need.
Whether this issue will cause the IVA to fail is one for creditors to judge on, but expect your IP to now want those wage-slips on a monthly basis, and for the money spent to be recovered out of future bonuses or additional earnings.
The only plus side to posts like this is that it may prompt others to re-read their proposal to make sure they are complying with everything.
I am so out of it on prescription meds most of the time, the only way I could ensure we were ok was to highlight relevant parts on a copy of our proposal and stick it in our payslip folder. Each month when I filed them I could have a look to make sure it was ok.
I took the IVA as being last chance saloon for us and with our IP and this forums help I've finally managed to budget.
Hi. I find some of the posts here very disappointing. The IVA is not a 'favour' to us by IP's and creditors. We accrued debt - by whatever means and backstories; we were unable to pay them, and we were offered the opportunity to pay something of what we owe. We are all signed up to it and we are all adults not children 'playing hide and seek' with extra funds. I'm not taking the 'moral high ground', but it is what it is, and we should step up and get debts sorted as best we can. Its not worth risking failure/bankruptcy, especially if requests to spend extra funds on necessary expenditure is likely to be approved anyway. X
IVA journey started: 30th March 2009. Settled: 17th July 2012. Completion Certificate received: 13th March 2013. Breathe. x
Many people within an IVA, myself included, will ultimately end up paying back every penny we owe plus fees to our IP - and lets not be naive about it, IP's are businesses, not charities, they make money out of us. Yes we don't have to pay the horrendous interest rates, but don't forget all of us will have tried to "muddle through" before entering the IVA and thus will have paid our creditors lots of interest.
For example, I think there's a world of difference between someone who say is only capable of paying back 40% of their total debt (through their normal IVA payments) spending several thousands pounds from an 'undeclared windfall' to someone doing the same thing if they will ultimately pay back over 100% through their normal IVA payments.
Don't get me wrong, I know where you're coming from and I'm not condoning someone spending a fortune whilst in an IVA, but there are times I read this forum and get the impression that many people regard their IP is some kind of 'wonderful deity'.
I agree with what your saying too. My quality of life is pathetic in that since divorce ive been living at my parents in a box room, and will continue too until this nightmare is over. Ive never hidden any extra money and am paying paying 80p in the £ back of the debt my ex wife kindly left me. I do recall my dad saying at the start though why on earth are they charging you 10k when your already in debt. Its all a business at the end of the day, and i guess we just have to struggle through it, and be honest. At least the option of an IVA is far better than the blimin interest i was being charged. One day it will be over eh!
