www.iva.co.uk

Hi All

I am currently starting the IVA process with Wilson Phillips, however I am a little concerned about the way they seem to be lumping my partners income together with mine and creating a I&E form for the whole household. I thought that a I&E form should be created for us jointly and then I would pay my my percentage based on income level and what was left makes up my IVA payment, is this right? It seems that they want to take both our incomes as one.

Also my partner has a credit card which she likes to pay at least £100 month off the balance, how do we take this into account? What if she wanted to pay more 1 month?

I am getting worried because although all the debt is mine and the IVA is in my name only my partner seems to be getting penalised and having to justify what she spends etc.

Hope this all makes sense, it seem to me the Individual part of IVA is not quite true if it has such an effect on my partner.

Any advice would be great.

Mark

Hi Mark
Take a second and third opinion from other companies.It is common for both incomes to be used but your partner should have her share of any surplus to spend as she wishes[If she earns 40% of the joint income she should have 40% of the surplus left over].
Creditors sometimes feel that the partner has benefited from the other persons debts and so should assist in the repayments.
As I say,take another opinion or two
Regards

Creditors do normally like to see the household income and expenditure as one but it does really depend on your circumstances.

Has your partner benefited from the debt in anyway? Is she sitting on a sofa bought using credit, watching a tv you bought on a credit card, have you ever paid for an evening out together on a credit card, used the proceeds of a loan to pay for a family holiday... These are all questions that i would normally ask.

If she has benefited from the debt you have occrued then your creditors would expect to see you as family unit and putting everything together.

Who is the main wage earner, if it is you then your creditors could argue that you are paying her debts and supporting her if they allow you to hold back the income and why should they do this.

Of course if the debts were all ran up before you met then it may be a differnt story but as i am not fully aware of your circumstances i would not like to comment.

With resepct to Tax credits it is your choice, yes, however it is also the creditors choice to accept or reject the IVA and why should they accept if you are not making your best ever and maximising your income, which by not claiming tax credits you could be seen not making your best efforts to increase your income.

As Andy said you are better to go to a few companies before you commit and then you will have a good idea of what your options are.

If the debts were all run up before you moved in then i would suggest that you may be able to split the household I&E in the way you have suggested.

I would suggest you 'shop' around and take some further adivce before you agree to anything with Wilson Phillips.

As you both have a common interest - ie a child, it will be difficult to convince creditors that you are both financially independent, and therefore I feel that you are being appropriately advised at present.

In such circumstances, your partner will have to be content that her disposable income is used to assist with ongoing payments, and if she does not agree to this then perhaps you ought to look to other solutions such as bankruptcy or debt management.

Over the last few years creditors have become more and more alert to the fact that debts taken out solely are actually incurred to fund shared expenditure. Whilst this may or may not be the case, there is a hardening of attitiude towards allowable expenditure under IVA proceedings, that is not flowing through to bankruptcy or debt management.

Hi thanks for your advice guys.

I think I may look down the bancruptcy route. I understand what you are saying about common interests but I can't expect my partner to be effectivly living on a budget for 5 years when she had no part in the debts.

IVA would leave her with no disposable income of her own, which can not be fair.

regards

Mark

Guys

quick question, I initially went through Thomas Charles so have agreed to the 2 months fees for them. I have paid the first with the 2nd due end of next month. If I decide to cancel the IVA option and go bancrupt am I still liable for the second installment to Thomas Charles?

thanks

Mark

It would depend on the agreement you have entered into with them and there terms of business.

However if you are going bankrupt the second payment form part of the bankruptcy anyway if they did try to persue you.

If you are serious about going bankrupt i am sure they wont take the second paymen, you may want to discuss with them directly.

Just wanted to say good luck Mark.

Keep in touch and let us know how you get on.

Debbie