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[nat24]

Hi. I am looking for advice regarding my iva after a change of circumstances. I am currently paying £188 per month but since moving out of my parents and in with a friend id say my disposable income has more or less halved. My e&I doesn't include my gas and electricity bill or my dogs vets treatment as he now needs his regularly, only £20 per month for clothing - after 2 years I am no desperate for new clothes and I am struggling to keep to my £200 housekeeping amount.

My original debt amount was 14296.31. Looking back I now believe the iva was the wrong choice but payplan made to seem the most appealing option at first. They have said no to reducing my IVA payments. Can you help?

[Carla]

Hi nat24

If you are struggling to make your IVA payments then you need to speak to your IP and ask for them to be reviewed. They should be able to go back to your creditors, explain the situation and agree a reduced payment plan for you. However you might have to extend the number of months you pay into your IVA to compensate your creditors......

[nat24]

Hi Carla

I have spoken to PayPlan about this and they have told me that they are unable to reduce the IVA payments I make so now I do not know what to do. The only thing is I cannot go on like this so I am thinking about letting my IVA fail.... The question is what happens then?

[James Falla]

Hi Nat24

From what you have said it is possible that the reason PayPlan are reluctant to help is that you have chosen to move and as a result your living expenses have increased rather than this being forced upon you. Your creditors are likely to say well that is not our fault and you should continue to pay your IVA.....

It might be a different situation if you can argue that you were forced to move because your parents moved out the area or some other reason. PayPlan might have more flexibility to help you then. Was this the case?

Ultimately if they will not help then given your debt is less than £15k, you have no assets and your DI is now £90 a month or less, I feel you could qualify for a debt relief order. You would need to check that your DI is actually less than £50 a month. If so then you could allow your IVA to fail and start a DRO. This would mean no monthly payments and your debts would be written off within a year.

[Geraldine]

Hi there Nat24

Sorry to hear about your IVA and that you have not been able to get a positive response from PayPlan. If you simply cannot continue to pay the agreed payments than you will have to let your IVA fail. When that happens (it takes a few months) you will then be back at square one with having to deal with your debts.

It is likely you will lose all or most the money you have already paid into your IVA I am afraid and your overall debts will not have reduced very much. You will then need to decide what you want to do as
PayPlan will not force you into anything.

In your situation probably the best ways to get your debts behind you asap would be to either declare bankruptcy or do a DRO as James has suggested. It sounds as though you would qualify for a DRO if your DI is actually less than £50 a month. You should use BeatMyDebt.com living expenses guide to confirm this. If your DI is less than £50 then go for the DRO. But if it is really more than £50 the best thing to do would be to go bankrupt. You can save for the fee while you are waiting for the confirmation of your IVA's failure from Payplan.

[nat24]

Thanks for your advice

I have been in my IVA for the past 2 years and I feel I have wasted this time and money but there is simply nothing I can do about it. I have reviewed my living expenses with the guide you suggested and I can safely say that without trying to squeeze the numbers to be able to afford my IVA my actual disposable income is less than £50! I am going to tell PayPlan to fail my IVA and try for the DRO. But if that fails I will borrow to go bankrupt. I really have had enough now and I just want everything resolved and behind me so I can move on.

[Carla]

Given what you have said about your situation I think you have made the right decision. The first thing to do would be to make sure that PayPlan fail your IVA and send you written confirmation of this asap. It could take a few weeks for this to happen but in the mean time you stop paying your IVA payments. Once you have that confirmation you can then start the DRO application.

[James Falla]

Hi Nat24

You plan sounds sensible. Please do not hesitate to let us know if you come across further difficulties or have more questions. Good luck with it.