we are very unhappy with this modification

[bigpete.m]

Myself and my partner have recently signed upto an IVA with an IP and our fees are around 450 to 500 for the next five years. In desperation we agreed to quite a few unreasonable modifications, one being that we have to give up half of any additional income ( say a second job or overtime ).

I have just added another £50 to our payments for the next three months as I received £300 overtime last month. Really we are very unhappy with this modification but as I say we were absolutely desperate so signed upto it. What would happen if I refused to pay half of any future overtime ? Would the IP really petition for bankrupcy ? We are sure we can continue to make the high payments for the next 5 years so the IP will get his fees.

The IP is asking for our salary statements every month. Would the IP risk losing his fees by pushing this matter with us or is he happy as long as the £500 continues to be paid each month. It feels like a tyrannical regime! Cheers Peter

[whichwaynow]

Hi bigpete,
Welcome to the forum. The 50% modification is normal for most IVAs as the aim is to pay back as much as you can to your creditors. You may well have also had a windfall modifacation. If you recieve any money which you did not expect over £500 then the chances are that you will
have to give that up as well.
The IVA will be a very hard 60 months but it will be worth it in the end.

[aguise]

Hi bigpete
As whichchway says, this is a pretty standard modification. An iva proposal aims to give creditors the best amount back possible, which includes 50% of overtime and bonuses and in most cases all of windfalls such as inheritance or winnings. We pay our 50% over too each month and not on the Ips request we choose to do it this way as it saves getting a bill at review. I try to look at it from the point of view that if i did not have the iva all of our overtime would go to keeping our heads above water and we would have had the benefit of none of it. The iva at least now gives us the benefit of the 50%. We had our first proper holiday last month, only a cheap sun newspaper thing but our first hol of more than 2 nights in the last ten years, and it was the 50% that paid for it.
I dont know what would happen if you didnt pay the overtime, but I would think the iva could be failed as you would not be keeping to the agreement. Only my opinion though so wait for other answers.
I know it is difficult to work extra hours and not get the benefit of all of it, but maybe looking from it that at least you get to enjoy that 50% is easier than being upset at where the other half goes. Your other alternative is not to do the overtime.

Hope that helps a bit

Ang

Please visit my blog at http://aguise.blogs.iva.co.uk/

[MelanieGiles]

Hi there

Can you tell us why you feel this modification is unfair, when you have probably asked your creditors to write off a substantial amount of your debts, and they are actually leaving you with half of the additional earnings?

If you feel that you cannot abide by this provision, an IVA should not really have been offered to you in the first place, as the modification is deemed to be very fair. I am sure that your IP would have discussed this with you at length at the time of your creditors meeting, but if not then you ought to discuss the implications of failure with them directly.

Do you have any assets which would be at risk under bankruptcy proceedings? If not, then you may wish to consider petitioning for your bankruptcy if you don't feel you can honour the commitment to an IVA.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi Peter
This is a normal modification and as Melanie states is only fair when you consider that you will have a large part of your unsecured debt written off,not forgetting the freeze on all interest.
I wouldn,t put your IVA at risk over this modification and I'm sure that ,on reflection,you will agree is only fair.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[OPTIMIST12]

I was actually pleasantly surprised when I found out about the 50% Overtime clause when my IVA was being proposed as I honestly expected that I would be permitted to keep only the Expenditure figure from my I+E statement and that everything else would have to be paid in.

I certainly dont begrudge sending in my extra 50% cheque every month - I look at it as a half-full glass rather than a half-empty one!! And I dont know if bigpete has a Minimum Dividend modification but those extra payments will help towards covering this and to meet any increase in IP fees over the 5 years.

[sonyse2t5]

Creditors have a number of ways to get more from people -O/T, EQ release, probate etc.

The are standard mod' as everyone saids. It means you have less written off at the end of the 5 yrs.

Its the system, it does suck!

[Sadsack]

Its a hard 5 years and no-one disputes that. As the others have posted, a large chunk of your debt is going to go away - 50% seems a lot but in the grand scheme of things, you get to keep 50% of it as well. As long as your I & E are fair and you are managing to pay your IVA every month, I cannot see what the problem is. I don't mean to sound harsh, forgive me if I do, but my thoughts go to the other extreme whereby IVA payments go up, cost of living goes up as do interest rates, and the debtor is unable to pay the IVA. If you are managing to pay every month, any bonus you get is a bonus to your creditors as well as yourself.

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[Adam Davies]

Hi
I can't say that I'm proud of having a large part of my debt written off.
A system that allows you to manage your debts,pay back as much as you can,have the remainder written off and give you a fresh start in five years hardly "sucks"
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Sadsack]

Its not the system that sucks, its the lack of understanding and communication that sucks. Generally speaking, I think its the words - "Your IVA is approved" - and all sense and sensibility flies out the window!! I think many of us who post here would have willingly sold our mothers to get out of the problems. (I would have LOL Never!!!!)

This subject has been debated at length over the last months - at the end of the day, if the IP has explained fully the consequences of modifications and the debtor accepts them .................

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[MelanieGiles]

Personally, I find the comments of certain posters pretty offensive and would like to see this tempered to a certain degree.

It would be good if all posters would note that there are a lot of people out there at the moment using the forum to decide whether an IVA is a sensible option for them. To rubbish what is a perfectly good and fair system, is hardly necessary and the use of such wording is hardly helpful.

Those people who feel that being allowed to retain 50% of additional earnings, at a time when they have probably asked their creditors to forgive a large amount of debt, may well be in the wrong repayment solution.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[thebear29uk]

I agree with Andy. We might not like the creditors when they are hassling us for payments we can no longer afford to make. We may think that they are businesses who can write off bad debt easily so we shouldn't feel too bad if we become insolvent.

But IVAs are a way to get a fresh start and agree to pay back as much as possible. This comes at a price to all of us whether we repay over 60 months within a tight budget or sell our houses to offer a Full and Final.

I've read here that people will not go for promotion because they would have to pay it into the IVA. Yes they would but only til the end of the 5 years after which they would be better off than having not taken promotion. Also Ang always makes a valid point that keeping half the overtime is a way to pay for things without it coming out of the agreed allowances.

I think we sometimes need to reflect on our circumstances and not seek to blame the creditors and the IVA process for how they came about.

I know I spent the money. I'm grateful that my IVA was approved.

Regards

Dave

[sonyse2t5]

Andy,

An IVA limits the payments to five years and that means some debts are written off - it doesn't matter if people feel proud or not in having their debts written off,it is the LAW.Granted the banks would have had a 7 year IVA if they were allowed to.

Many on the forum have cited of not having enough to live on an IVA and so to cough up 50% of extra dosh is a bit rough. Why not 30% to go to IP but 50%? Can any one come up with a professional reason?

O/E is to supplement the income and people should be allowed to keep most of it. What happens if the fridge and microwave or the boiler goes?? They cost loads to fix.

[Skippy]

If an IVA is drawn up properly then people should have enough to live on - not a life of luxury obviously! I had no problem with the 50% modification - if my IVA had worked out approximately 73% of my debt would have been written off and I was grateful for that.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[louisa.s]

We've been in our IVA for approx 16 months now and how to give 50% of my partners bonus over each month (after tax etc). Whilst it isn't obviously the preferred option I certainly don't begrudge having to give the money over as they could have wanted all of it and it certainl;y gives us a greater satisfaction that we are working towards paying our debts! I would say on the plus side of this modification that we have (with the permission of our IP) used the full bonus on the odd occasion to help us out with necessary car repairs. And I always make sure I send a copy of the payslip as well!

It is worth noting that if you are really unhappy with this modification and wish to go the bankruptcy route then if it is a regular bonus that he gets each month that it will used by the OR when assessing your IPA amounts (if I understood correctly from one of my previous questions?!?!?)

At the end bigpete.m it has to be your decision but perhaps give it a few months to settle down and see how you feel then. An IVA is never easy and you lead a very frugal lifestyle but then bankruptcy is not easy by any stretch of the imagination!