Myself and my wife are 2 and a half years into an IVA (the IP did an IVA for each of us, jointly, but as separate policies). My payments are £510, my wife's £100 per month, 5 years with an equity release, or extra year payments to 6 years (only £25k equity in house and 90% mortgage, so will be 6 years I guess).
My wife has never missed a payment. However my income has dropped considerably (over £500 drop) per month since commencement, meaning I have had 2 months added to the term for missed payments, and I am also in arrears by 2 months. These have occured over the term not all together. I have had good communication with my IP throughout. She has told me that I need to make up at least one of the missed payments in early Jan (the missed payments occured over the last 12 months)or risk failing. In our annual review in July we are in a "negative" by £20. We are barely surviving.
My IP has said "can I raise a cash offer from a family member to offer the creditors, based on our circumstances". This suggestion was made as she said she can't call a variation meeting because we have no surplus from the annual review.
To compound matters I am a Director of a business that sadly has gone insolvent in the last few weeks. We have launched a new company in a different industry (I'm a joint Director)which is growing well and starting to pay a small income (less than before) but it's early days. It may or may not be able to cover my £510 in the forthcoming months through drawing a salary. As a Director I can't risk bankruptcy, and certainly I do not wish to fail the IVA then owe the whole debt we started with pre-IVA. I havent yet informed my IP of the company insolvency as concerned she will fail the IVA.
So what are my options?
I dont think i can raise any family sum as an offer, and even if by a miracle I did, what % would even be realistically acceptable?
I really dont want to fail above all.
She can call a variation meeting asking creditors to accept what you have paid to date in full and final settlement. Although you are only half-way through the IVA, unless you have a realistic prospect of increasing your income in the short term, this may be the only option apart from bankruptcy - which will clearly affect your home and ability to serve as a company director.
It is vitally important that you keep your IP informed of all developments - including your corporate affairs, as none of like to get nasty surprises long after the event.
Thank you Melanie, I was hoping you personally would respond as clearly you give sound advice, very grateful. It was my intention to be very upfront with my IP and let her know exactly where we are. It can't go on as it is, we can't even pay for medical prescriptions we need, contact lenses etc, and falling behind now with utilities and council tax. We only have £25k equity in our property, and as it would be me forced into bankruptcy (my wife's IVA is only £100 a month so we'd keep that going), there would only be £12500 available anyway. Clearly as a Director however I'd really do anything not to be forced into bankruptcy.
Although it's a million dollar question, are creditors even prepared to accept settling so early, surely they'd rather let me fail the IVA and then go for my house in bankruptcy?
And any advice on the salient points I need to make to get both my IP and creditors to be fair and even consider the prospect of closing the IVA early?
In simple terms - yes. Creditors are generally very supportive in circumstances such as this, and with only £12,500 of equity in your property before costs of sale, none of that would be likely to be returned to creditors as the costs involved with bankruptcy are generally quite penal.
Thank Melanie, feel a little more positive about the situation now. I will draft a letter to my IP outlining our situation and feed back the response.
Fingers crossed. Have a good Xmas.
you may be better off getting a per paid certificate for any medical prescriptions that you need. I pay £10.60 month, but the best part is I dont have to have the money in middle of month when I need to get the prescription.
I would not worry about the time your iva has run, my f&F was accepted with in a year of starting my iva.
Last edited by kev59 on Thu Dec 26, 2013 2:23 pm, edited 1 time in total.
IVA now over with and it was worth it.
now starting my life again,
Hopefully Mel's words have calmed you a little. Creditors can be sympathetic. There is little point in failing if you have no surplus income due to a change in your circumstances.
Our circumstances changed within a year of starting our IVA and all our creditors were very understanding and accept a full and final offer.
I would also echo what kev has said - get a pre-payment certificate. I have to have 8 items a month so paying £10.40 per month is a godsend.
Hi all,
Many thanks for your comments, and advising on the prescription issue.
If my IP agrees to a variation meeting to see if they will accept our payments to date, as a full and final setlement, how long does it take to call the meeting? And in the meantime will the expect us to maintain payments, which we don't have for the above reasons?
Hi themuzza. A little while ago I was is a similar position -- for different reasons. My marriage went south and we found ourselves running two households, which took our disposable income down to £5 !
Our firm, Grant Thornton, were extremely supportive and assisted us by putting forward a variation to our creditors to accept payments made to date. Whilst we were waiting for the meeting ( the creditors have to be given 28 days notice) they agreed a payment break (as we weren't in a position to make payments in any case). Logic should tell them that you cannot maintain you have no disposable income, yet make payments into the IVA without sacrificing an essential outgoing (food?).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thanks for advice so far from all.
Im assuming I can ask my IP to carry out a variation meeting to request a F and F on payments made so far? If she insists on an IVA freeze for 3-6 months then nothing will change and we will still be in the same situation, just pray she is supportive.
Thinking in advance on the things I will need to prepare for this variation meeting, I'm assuming:
Bank statements - showing much lower income, 3 or 6 months?
Business insolvency details?
Possibly house valuation?
What about the issues such as roof damage,details on council tax and utility bill arrears?
I just want to make sure the IP and creditors fully understand we are in a bleak poverty situation and desperately need help.
This month we have literally nothing in our bank accounts so trying to sell house stuff on ebay-it's that bad.
I guess what I'm asking is if my IP requests a F and F from creditors do we outline everything including lack of prescription money, no car, roof problems, bill arrears, or is it just lack of income they look at to make a decision?
