Apologies if this is a little long-winded but we really need some advice desperately. Our IVA will have been running 5 years in July - we had the remortgage clause in our IVA in year 4 but as usual could not get the remortgage so we are assuming that the IVA will run for 6 years (although our IP has never actually confirmed this!). Our monthly payment is £640. In January this year, my hours were reduced at work and I now earn around £200 a month less than before. Although we have sent full details to our IP, we are still paying the usual payment of £640 and have been since the reduction in January. I did receive a redundancy payment of around £2,700 for the reduction in my hours but at the same time we had a shower leak and had to have the bathroom replastered and a new shower fitted, tiled etc so that money was used to pay for that (our insurance company would not pay out as they said it was wear and tear - I won't bore you with that story!!!). So basically we are struggling and I am now being made fully redundant at the end of June. I will receive £8,685 in redundancy payment and, having made an offer for a F&F to our IP of £5,280, they have now come back and said they would need £8,600 for a F&F! How is this calculated? This is more than the £640 per month x 12 that we currently pay (and can't afford to). What do we live on if I don't get a job immediately? The £85 that they are leaving us? Please help if you can. We are desperately disappointed that this is what they have said but have no idea what our position is with regard to the payments and what we say to them. If this is the case, we would rather carry on paying it for the next year, albeit at a reduced rate - is this an option? Sorry for rambling, thank you for listening.
First off it is not for your IP to decide the amount for a F&F, it is for you to make your best offer and for them to present this to the creditors. It is up to THEM whether to accept or not.
However, much will depend upon how your IP presents the variation!
Have you disclosed this partial redundancy payment to your IP, as this should have been disclosed and permission sought to spend on essential repairs, which most helpful IP's would agree to (depending upon the circumstances) if asked in advance.
You also need to find out the position regarding equity, as this will be very pertinent to the amount expected to make a satisfactory offer.
Might I ask who you are with ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Foggy has given you sound advice and agree with everything he has said so I cant really add much at this stage. Perhaps if you get chance you could answer Foggys questions and hopefully we will have more advice for you, Rich
"Always remember that the future comes one day at a time."
IVA completed . Just started a blog, if you get chance please take a look. http://rich.blogs.iva.co.uk/
Thank you for your replies. We sent them all details of the partial redundancy and also copy invoices of all the work we have had done, along with other receipts for car maintenance etc. To be honest, we usually end up chasing them for a reply to our letters. Like I say, they have never actually confirmed that due to not being able to remortgage our IVA will continue for a further year. Are they saying that our offer would probably not be accepted? Can we ask them for a reduction in payments due to my job situation? We are with Griffin & King. Thank you.
Somewhat unfairly, redundancy payments are classed as windfalls and due to creditors in full and in addition to ongoing payments. However, creditors will often allow clients to retain up to six months salary while a new job is found. And it isn't uncommon for a F&F using redundancy money to be accepted. What complicates your case is that you spent the £27k due to your creditors so they won't be feeling too warm towards a reduced offer from the second, smaller redundancy payout. It's always best to seek permission before spending creditors money!
I'm just dreaming about the bathroom I could have had with £27K [:)] Yes, sadly it was only £2,700! It is hard to know what to do for the best when you have a big crumbling hole in your bathroom wall so as we hadn't heard from the IP we had the work done.
Your payments should have been adjusted downwards by £200 when your reduced income kicked in.
Under the circumstances an offer of £5280 should be spot on [12x 440]
Go back to them and insist that they put your offer forward to your creditors, they are duty bound to do this.
Thanks Andy - that is exactly how we had calculated our offer.
We will speak to them tomorrow and let you know how we get on.
Thanks everyone for your help.
Good luck with your F&F offer - it is a good offer, but I would urge you to make sure you retain some for living expenses once your redundancy has kicked in as you don't know how long it will be before you are back in employment.
As others have said it is your IP's role to put forward your offer to creditors - it is not for them to judge or make a pre-decision as to whether or not it will be approved.
Let us know how you get on x
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There is a solution for everyone .... Just need to stay positive !
