Published: 13/07/2022 By Hannah McCormackMany of us are feeling the affects of the current increases to the cost of living, but what about those already in debt?!
With higher costs in gas and electric, as well as food and fuel those in debt could be finding it near on impossible to service existing debt plans such as an IVA. This is because when these debt plans were originally agreed the current financial climate was not taken into account, therefore making what was once a manageable monthly payment turn into what is now an unrealistic unachievable amount.
However, it’s not all doom and gloom as the Government has recognised this shortfall and advised Insolvency Practitioners to consider new lower instalments from those struggling the most. The Insolvency Service have issued new guidance to all IVA Supervisors, meaning if you are currently in an IVA and are struggling to make your monthly payments, due to the increased cost of living, you can ask your supervisor if you may be eligible for a reduced payment amount or a break in your payments.
The Insolvency Service have said that all advisors should consider requests from people who feel they can no longer make the agreed payment, to reduce it to a more manageable level. Your situation and available funds will all be taken into consideration. Your Supervisor will also review your income and expenditure so make sure you have evidence to support your request to pay a reduced amount by way of payslips and utility bills. If a change in payment is appropriate, it will also need to be agreed with your creditors. When the Supervisor reviews a debtors current situation there will also be consideration as to whether an alternative option may be better suited such as offering an early settlement of the IVA - depending on how much you have already paid or even bankruptcy.
The bottom line is to seek advice from a professional as soon as possible, don’t wait and hope things may improve.