www.iva.co.uk

Just received a letter stating that we are no longer eligible for tax credits, our proposal was drawn up that we were claiming £44 per month, now we will have nothing, due to just inching over the new earnings limit, called my IP and we have a £50 contingency to cover things just like this built into our plan and now this is wiped out, I am really worried now because there is no further contingency and we are only in month one. The mortgage and stuff like that will go to variable rate in August and what with gas and electric prices and diesel prices going up I am starting to panic.

I would have thought your IP would have factored in this change but if not they should allow you a reduction of 15% to compensate. You still need a contingency and being in month one you should get this sorted out before it goes on much longer.

i just spoke to them and they said that that was what the contingency was for and that if it does become a problem to contact them in the future, they had put the proposals forward including the £44 per month Tax credits and I naively didn't realise that we were slightly above the earnings level. He also made reference to the fact that we had only just been approved into the IVA so maybe we should just carry on and see if it does become an issue.

It is already an issue and it is nonsense to say that a contingency fund is for loss of benefit entitlements. Your payments should have been set at a higher rate until April and then reduced in line with the advertised reductions in tax credits. Your payments can usually be reduced by 15% and this would make more sense than just 'seeing what happens'. You should be able to put money aside at the end of each month and if you cannot do this your IVA is liable to failure down the line.

Speak to the IP themselves and explain that your contingency is now to be used to make up for a shortfall in income that they failed to spot and something needs done now.

Thanks for the advice Michael, I am with Payplan and I just assumed that they know best but it is a worry as we are at the start of our journey and are already looking at tightening our belts.

Contact Lizzy from Payplan who posts here and she may be able to help. Otherwise speak to the IP who signed out the proposal and get it sorted quickly. You need to have money set aside for car repairs, home maintenance, medical, dental, optical etc never mind contingency and being in this position after only one month is wrong.

Disgraceful to say that you only just got approval for the iva therefore you should do without a contingency allowance due to losing tax credits! Don't be afraid to stand your ground!

Paul

we've lost our tax credits too and are both public sector so have no hope of a rise either! Our annual review is June / July so just hoping to manage until then but with increased car insurances / petrol etc etc we're really feeling the pinch so £40 is a massive amount to be saying goodbye to [:(]

Hi relieved - I do know how your feeling, we have not lost our total tax credit award, but we have lost 62 pounds per month.
My husband has had a small pay increase of 590 for the year (not monthly!) So we need to wait & see what his wages come out with now, not much but we hope to try & sort it out soon x

I'm glad Lizzy has caught up with this. The contingency fund does what it says on the tin, it's not supposed to make up a shortfall in income.

I can't priase this forum enough, Lizzie from payplan has sorted my querie out, it turns out that one they recieved my letter from tax credits they have now reduced my monthly payments, phew!! without everyone on here I would have just settled for what the chap told me on the phone and would be £44 per month down.

Power to the forum again. So glad it's sorted for you Hayley. x

That's excellent news Hayley - glad it's been sorted.

Fab news! What a relief for you all! x

It shouldnt take the forum to force the right decision to be made but great result.

Paul