www.iva.co.uk

I started an IVA in my sole name in May 2006. Over the first 4 years I paid the amount in the agreement plus 50% of any additional income (pay rises). In the 4th year of my IVA I split from my wife & moved out but still paid my share of rent & bills I was contracted on this property as well as a property for me.

As a result I was not able to pay the full amount agreed in my IVA each month. Now the 5 years are up and I have sent my wageslips for the final 12 months. My supervisor has advisd that I need to pay approximately £3k to cover additional income received, but I don't have any savings to pay this as the extra income was spent on additional bills and divorce costs.

The total amount I paid over the 5 years is more than was set out in my original IVA agreement due to the extra payments I made in the first 4 years.

My supervisor advised they can call a meeting of creditors to see whether they will accept what I have paid & close my IVA as complete. However they advise that creditors may reject this & apply for me to be made bankrupt. This seems harsh as I have paid as much as I was able to and more than the amount that creditors agreed in the original agreement. I don't want to be made bankrupt but don't currently have any funds to pay the £3k. I think the creditors would get more money if they apply for my bankruptcy as they would get all the money I have already paid into my IVA over plus the money they can get for the next 12 months if I am made bankrupt.

If I call a meeting of creditors & they refuse my proposal to close the IVA with what I have already paid, do I get a chance to pay the £3k to them before they apply for my bankruptcy ( I could possibly borrow the money from family to avoid bankruptcy, but this is far from ideal)?

I am wary of calling a meeting of creditors if it is possible/likely to end in me being made bankrupt without the chance for me to borrow £3,000 to avoid the bankruptcy.

Please help!

Hi. If a variation meeting is called and the variation not accepted the IVA will continue as before. Therefore you should still have the opportunity to make up the shortfall.

Was your IP made aware of the change in circumstances at the time they occured, as your situation should have been reviewed then, not at the last hour!

If you haven't followed the rules of your own IVA, your IP is only doing their job - and whilst they may be sympathetic about the additional expenditure you have incurred - it would have been far better to tell them about this at the time and get that sanctioned.

I am sure that creditors will accept your offer, so let them get on and present it and keep your fingers crossed. At worst, you will only be asked to extend the term to capture the lost money.

Thank you for your replies. I agree, my IP is just doing their job & I would have been much better to advise them of my change in circumstances at the time despite it being a somewhat frenetic period.

I will ask for the meeting to be called for my proposal to be put forward. Can you just confirm that if the creditors reject the proposal they can't apply for me to be made bankrupt without me first having a chance to respond? Many thanks!

Latest update - I advised my IP that I don't have any savings at present to pay the £3k plus that has been requested (I have no savings). They got me to complete an up to date income & expenditure review which shows I have £445 per month spare after bills etc each month.

On this basis they are suggesting I may want to propose extending the IVA for 8 months from now to pay off the outstanding £3k. I am a little reluctant to do this as the 5 year term of the IVA was up in May 2011 & I paid as much as I could in that time, far exceeding the original suggested return to creditors.

Extending it for 8 months from now would mean I finish paying in May 2012, plus I would then have to wait another few months for my credit record to be updated that my IVA is complete.

My IP also are still indicating that if I call a meeting of creditors to accept the amount already paid as full and final settlement (£38k paid in against the original accepted proposal of estimated £27k),and they reject my proposal then the IVA would fail and creditors may file for my bankruptcy.

I have asked my IP whether, in the event that creditors reject my proposal I would have a chance to respond to creditors & put forward another proposal or borrow from family to pay the £3k before creditors could apply for me to be made bankrupt but am awaiting a reply...

A strange situation as I have paid a lot more than the amount accepted in the proposal but am still being faced with the prospect of bankruptcy 5 & a half years after starting my IVA!

I'll keep you updated.

OK, my IP advise that all proposals would need to be presented at the one meeting, and if they are rejexted then the prospect of creditors filing fankruptcy is a possibility.

I can't risk bankruptcy having come so far, so having discusse with family I have agreed to pay the outstanding amount in 2 payments over th enext 2 months. This will mean I will have paid the outstanding amount of just over £3k in early December. Hopefully then my IVA will be completed & I can begin the process of getting my credit file updated & rebuild my credit rating.

I hipe to get a mortgage one day with my new partner (wh has been very supportive & knows all about the IVA), but understand this will require a substantial deposit and may not be easy to obtain.

Anyway at least the future is looking good & after years of money worries I will be free! And I can say that an IVA is a good lesson in avoiding getting into debt problems again!