www.iva.co.uk

Hi All
I am currently 2 years into a 6year IVA with Debt Free Direct. We have struggled the whole of the time and we are now on the verge of failing. We have spoken with DFD who say they can reduce our payments slightly but suggested creditors would want an extra year worth of payments, making it a 7 year IVA! The problem we have is even with the reduced payment we feel we will still struggle and may end up failing anyway. We feel maybe bankruptcy is our only other choice but we cannot pull out the money needed to do this. We are negitive equity in our home and have nothing of great value we risk losing.
I have read in places that on failing an IVA the company then petition for bankruptcy. Is this the case with all IVAs? If not, what other options do we have?

Its not the case with all IVA's. Some IVA's have modification put in place by creditors stating that some funds need to be retained for the debtors bankruptcy. This will be individual to each case and you will need to check your Proposal and your modifications to see if this is relevant in your case. Your IP will be able to confirm this for you.

Have your circumstances changed or have your had a reduction in income or an increase in expenditure. if this is the case, you may well be eligible for a variation or a reduction in payments.

Hi

I think it is very unlikely that DFD will petition for bankruptcy on behalf of your creditors given that you have no equity.

If your IVA fails then you could consider bankruptcy or a debt management plan

Regards

Thanks for the replies.
My wifes hours of work have reduced due to the need for childcare which has reduced our income. We did a new income and expenditure with our IP which they basically ignored and they told us how much we should be spending on stuff and told us how much we could afford to pay into the IVA.
Is there a recommended company to use to file for bankruptcy or is it straight forward to do this our self?

Your IVA needs to fail before you can petition for bankruptcy. Usually IVA's fail after 3 missed payments.

You can petition for your own bankruptcy, it's fairly straightforward, if you go through a company, they may charge....

You can obtain the bankruptcy forms from your local county court, however you will both need to petition separately and pay two lots of bankruptcy fees (currently £700). Your locab CAB can help out with completing the forms, however it's likely that you may need to wait for an appointment with your CAB. Until your IVA is failed, you cannot peition anyway.... however you can complete the forms in the meantime.

Hi CassyandClay, I would submit another income and expenditure to DFD, you spend what you spend even with cutbacks, try and speak to your IP not the customer service folks, if all else fails then good luck with whatever route you choose. x

You can ask your IP to terminate your IVA before three payments have been missed, if you decide that bankruptcy is the best option for you moving forward. But if you have disposable income then you may have to pay that into the bankruptcy for three years, so it might be better to correctly calculate that first and then seek advice from your IP as to whether a variation of terms is a sensible option. I would not offer any extension to the term of the arrangement as a result of this - it is not your fault that your disposable income has reduced, therefore why whould you be penalised by paying an additional year.

Hi and thanks for the replies!!
My wife spoke with DFD today and they are insisting on the extra years worth of payments or we increase our payments and do not pay for the extra year!!!
They also asked for an immediate payment which I am reluctant to pay. After all, if the creditors turn down the renewed payments the IVA will fail anyway!!

If you wish to vary the terms of your IVA, that is your prerogotive and it is not for them to dictate terms, merely to advise you. Ultimately it is your creditors decision whether to accept a revised offer and not your IP's.

Ask for a break in payments of a few months give you time to save up and think
Its your. Iva you do it as you want to the company just control the money. Or go bankrupt you have tried to pay back but your struggling don't get down about it keep moving forward and positive there's always an option if you end up with nothing at least you can start fresh when its sorted. Thousands go bankrupt its not what it was