If you need debt advice we can help

[Kacki83]

Help!! I am entering my 2nd year of my IVA. Due to a drop in wage I found myself getting into mounting debts and found my self paying debt with debt leaving me with numerous creditors and £16k in debt. I was sold the IVA option as all i wanted was 1 manageable payment.
I'm now finding that my payment charges are getting higher and higher. I pay just over £400 per month, I am then to pay 50% of any additional wages on top of this (I'm in sales so commission based) I'm finding it harder to meet these payment demands. I really don't want my IVA to fail and as I'm going to end up paying over £8k more than I owed would they fail me if I can't pay more?

Thanks

[James Falla]

Hi Kacki83 and welcome to the forum.

From what you have said I understand that your total debt is £16000. Is that correct? I find it strange that you have been asked to pay £400 a month. Can you affrod this? Have you been paying this amount since you started your IVA?

At the rate of £400 a month you will have paid your debt in full just over 3 years. Because you are paying 100% of your debt Your IP will add fees but these should not total more than £3500. As such the total debt should be paid at the end of the 4th year of your IVA and posibly even sooner if you pay extra bonuses as well. I would strongly recommend that you speak to your IP and confirm that this is correct. You should certainly not be paying £8k more than you owed origionally.

[Geraldine]

Hello Kacki83

Like James has said I am surprised that you are paying £400 a month. Do you think you can sustain these payments? If not then I am sure you will be able to speak to your IP and discuss the possibility of reducing what you pay each month. Even if you do this it sounds as thought you will still pay all of your debt back within your IVA.

The bottom line is you do not have to pay more into an IVA unless you can afford to do so. Do you feel that you can have another conversation with your IP to discuss the situation?

[Kacki83]

Hi,

Thanks for the reply, sorry about the delay I couldn't log in. I thought that this was the case, like i said I want to pay back my debt and what I owe I just think I'm going to be paying well over the odds for it. I will def speak to them, as my review is up in march-April and I've been so worried that I may fail.
I can't really afford to pay more, my outgoings including my IVA is over £1100 a month. If I don't earn commission I have like £200 left for food etc in a month. When I get commission they then want to take a further take 50% of this.
If it means I paid off my IVA quicker that would be amazing, I just can't see me being able to continue another 3 years on this.

Thanks again for your support. This website is amazing, knowing I'm not the only person in debt and in this position and being able to talk to someone that won't judge is great.

[Kelly Jago]

Hi all.

Just a thought... if it was deemed to be affordable over the term of the IVA, wouldn't Kacki83 have to contribute towards interest on the debts as well as IVA fees and the original debt levels themselves?

Kacki83 - Have you got a copy of the "income and expenditure" record they are using to calculate your IVA payment? If you feel the payment is unaffordable you may find that this document contains an error (or something that has changed) which needs to be rectified to restore affordability for you.

[Geraldine]

Hi there Kelly. I am not sure about your point about paying interest. As far as I am aware interest and charges are frozen when you start an IVA. However, if you are able to pay back 100% of the debt then maybe it it is different. I will be interested to hear what James or Steve think about that on.

[Steve Jackson]

Hi there Kacki83

From what you have said I do not think you need to worry about your IVA failing. If you are struggling to make your IVA payments, then as the other posters have said you must speak to your IP. If on the basis of reducing your payments you will still be able to repay near anough 100 pence in the pound, then your IP should be amenable to considering a reduction. Why have your payments been getting higher and higher? Have your earnings been increasing?

In terms of Kelly's point about interest, she is right. If within a 5 year IVA payment period, you can repay 100% of your debt and IP fees, then your creditors are also allowed to charge interest at 8% per year. However in this scenario you IVA would only run for 5 years meaning that any interest payments would be minimised.