A quick summary:
Wife and I in separate IVA's (mine £510, hers £100), 2 and a half years in. 2 missed payments on mine until Xmas. Hers fully met.
Massive drop in income from me as my business went insolvent in October last year. My income was dropping over the last 12 months of trading to the extent I was earning £1000 less monthly than at the start of the IVA.
Now working on a much lower income self employed.
For the last 12 months we have barely survived so we can meet the IVA. Now no car, no prescriptions, no dental care we urgently need, and we have a house with a bad leaking roof.
IP suggested last month an offer of a payment to date, on just my IVA. However just as I'm doing the key paperwork to prove everything my IP has now suggest we freeze the IVA's 1st, to stand a better chance at a later date of the creditors accepting a "payment to date" offer.
Can anyone advise on this?
The thought of months of waiting when nothing is changing is not good.
Hi, sorry to hear that things are not running so smoothly. I'm not sure why s/he suggested freezing to freeze the IVA's first to stand a better chance. However we do have very knowledgeable posters who may be able to offer you some advice.
Have you considered bankruptcy as an option to draw a line under things for good? In no way saying this is the right thing for you just a suggestion.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
Bankruptcy may well affect my chance of any success being self employed, but I am definitely thinking it may be better than years of a frozen IVA hanging over me, then forced into bankruptcy anyway.
We have very little equity in the property, I guess £25k between me and my wife, and it would only be me going bankrupt. Not sure we'd lose the house as the roof alone to repair is £3000.
We've been really committed to meeting all payments to the extend we given up everything in the last 12 months and are barely surviving and have now fallen behind on council tax and utilities so we can meet the IVA. Nothing is going to change in my income or my wife's so Im really unsure on the freezing the payments option as a reason to give for a better chance of a "payment to date" acceptance later.
When I had to go for a "payments to date" due to being unable to meet the IVA payment without severe hardship, my IP suggested a payment break while this was being sorted out. One: It greatly relived the pressures to try to make an unaffordable payment and, Two: It reinforced the fact that I didn't have the money to make the payments.
Looking at things from the creditors point of view, you are saying I cannot pay, and then paying anyway !! So they might refuse to believe you cannot pay ( as you are doing so!).
Is this what your IP means ??? Not a "freeze", but a "break".
If the creditors still refuse the missed payments will be added on at the end.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Thanks foggy. You gave me advice on this a couple of months back, alongside Melanie which was really helpful.
It sounds like the advice by my IP to suspend payments for the time being, to stand a better chance of a payment to date option being accepted at a later date is confirmed by you as a reasonable suggestion.
My income or circumstances wont change so I guess doing this confirms to the creditors that its not just a short term income drop and hardship, but a longer term overall drop in household income.
Hi Melanie,
You kindly suggested that a payment to date option would be the most obvious path a couple of months ago, so very helpful advice.
To summarize my income dropped from £2500 to around £1300 over an 18 month period until October last year. Myself and 2 co-directors had a successful business that fell victim to the recession. Once had 20 staff then the manufacturing sector we serviced cut back massively so ended up just the 3 of us. In October last year we had to declare the business insolvent. Sad times. We then launched another Ltd company in a different sector; a low cost start up, this is paying me around £1000-£1200 a month, but in small irregular amounts, depending on cash flow. For the foreseeable future this salary won't change.
During this 18 month salary drop we placed the IVA payments above everything else. So the "essentials" on the budget sheet have been neglected. So currently behind on utility/council tax bills, no new clothes, no car anymore, no contact lenses, roof leaking. It's been over a year of hell.
Survived on hand outs from family, friends, and regularly direct debits are being returned.
Wife and I in separate IVAs, £510 and £100 respectively - 30 months in.
IP initially suggested a payment to date offer on my IVA, this was 6 weeks ago it was suggested. Told me to start getting paperwork together. However IP said my wife had not made enough pence in the £ payments for hers to be viable. I have arranged 3 missed payments in 30 months on mine, she's missed none-so not sure why hers would be different. I would have thought hers would be more viable, as we were paying back similar percentage pence in the £.
Then the IP came back this week and said the team leader on reviewing again said it would be better to suspend payments on both IVA's to show that other avenues had been exhausted, before trying for a payment to date option, on just my IVA alone, at a later date. So this is where we are now - no idea yet how long the suspension is.
I'd really value opinions on the way forward as very much in limbo.
Many thanks
Last edited by themuzza on Sat Mar 01, 2014 9:47 am, edited 1 time in total.
Hi, we are 32 months into our iva and we have had a change in circumstances. I am in a joint iva. I have spoken to our company and they have suggested concluding our iva on funds to date. I have been dealing with case administrator who is really nice who is putting the case forward to the ip and then hopefully the creditors. They said if it wasn't accepted - then they could look at a payment break. Having a payment break is not going to make any difference for us tbh - circs will still be the same. Maybe ask them to put the case forward to the creditors first and then look at a payment break if not successful. That's what our iva co have suggested. Good luck.
I agree with you Melanie and Kaz12. This would seem a much better option. Nothing is going to change so why would they want to suspend it then try later?
I will try and talk to the IP directly.
Sorry --- the point of a payment break seems to have been missed here.
If you are saying to your creditors that you can no longer make payments, so please end the IVA --- how can you then continue to make those payments ? You are telling your creditors you cannot pay and then demonstrating that you can pay.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Ok I can see what you are saying Foggy. However we haven't paid the IVA's since Xmas and the only way we managed to pay them for the months prior to Xmas was because we didn't pay for the council tax, utility bills and the other essentials that should have been met. We in effect placed the IVA over the bills we need to live. Now both utilities and council tax are on our case heavily. I thought the whole idea of an IVA was that we could meet our living costs, all but on a very reduced budget, and pay back the creditors whatever was left. What we've done is not met the essential bills on the budget sheet in order to meet the IVA payments, because our income has dropped. Surely if I prove we've missed paying our essential bills so we met the IVA and that now we owe the equivalent of the IVA payments to the utilities and council its fairly obvious the income sums cant meet all the bills plus IVA. So suspending payments to the IVA just means we can now pay the council tax and utility bills monthly, but still leaves zero surplus because of the income drop.
Ive asked if the IP will present both our IVA's as a payment to date option, they said they will review and get back to me with a decision. If it's a no then Ive no idea what's next as we just dont have the money coming in. Does that make sense?
I follow themuzza. Personally, I would agree a break with the IP ( as I think they have suggested in a round about way ) in order to meet the essential bills -- the last thing you want is to end up in deep trouble over council tax arrears or some such.
Whichever way you look at it something has got to give!
From the creditor's point of view, there seems to be very little chance of them getting anything if you go bankrupt, so to refuse a well presented case would be churlish.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I don't see a break as fixing the problem, unless the reduction in income is temporary. No point in putting sticking plaster over a wound that continues to bleed. The bleeding needs to be arrested - and I firmly believe that this IVA probably needs to be concluded in the best possible manner for all concerned.
