Am I going to get screwed?

[LJColeman]

Hi all,

I entered an IVA in May 2021 for a sum of around £18,000. At the time of entering the IVA I was only earning 32K per year. My monthly payment was £145.00 per month.

Over the last 18 months I have had some small pay increases meaning my IVA has been adjusted to £174.00 per month.

My online portal with Bennet Jones is showing I have paid £4953.89 so far & have £6931.00 remaining with a plan completion ETA of 3 years time.

Now comes my question, I have just received a significant promotion at work and my basic salary has jumped to £58,000 with an OTE of £70k.

I have made Bennet Jones aware and I have to provide a copy of my contract & wage slip etc next month once I get paid and they will then re-calculate.

Am I going to get stung with a huge monthly payment? Obviously now my circumstances have changed i would like to pay off the £6931 as soon as possible and be debt free finally.

Any advice / support is always grateful.

[Breezy]

They will, likely, increase your IVA payment by 50% of the net increase in income. That £6391 is based on the current payment --- this projection will increase to match the new payment, when it is calculated.

If, on the new payments, you hit the balance of the full original debt, plus fees and possible statutory interest, earlier that the anticipated end date the IVA will complete early.

[LJColeman]

Thank you for the speedy reply.

Do you think im better off asking to borrow £6931 from family and then offer a full & final offer?

I can then pay back the family member quicker due to my new income?

Kind regards

[Breezy]

As your provider is already aware on the coming increase, creditors might not accept a F&F at this time as they stand to get more back if they leave the arrangement to continue with an increased monthly payment. You are, however, entitled to make an offer of any amount at any time. Do not mention paying it back to the donors and make sure the offer is worded such that, in the event of a rejection, the IVA continues as before.

[LJColeman]

Thanks again for the reply.

When I enquired about an F&F this was the reply I had from Bennet Jones:

As it stands, the current balance of your IVA is £7,279.


As a guide to settle the IVA, we would suggest proposing to match what you originally agreed to pay in to the IVA through your contributions. In total you agreed to pay £11,884.89 in to your IVA, to date you have paid in £4,605.89, which would leave £7,279.


Your creditors are entitled to receive 100p in the £ back plus the costs of the IVA. The decision to accept anything less than this would be up to your creditors.


If you do wish to proceed with offering a settlement figure, we would need confirmation of the offer you would like to make to creditors. We would also require a written offer from the third party who will be gifting you the funds to settle the IVA on your behalf and proof of the funds being available, this can be a copy of the bank statement confirming the funds available, we only need it to show the balance. We would also require some form of ID for the third party and proof of address, this could be a copy of their driving licence and a recent utility bill.

By reading that would you suggest I make an F&F offer of 7K ?

Kind regards

[Breezy]

Thanks again for the reply.

When I enquired about an F&F this was the reply I had from Bennet Jones:

As it stands, the current balance of your IVA is £7,279.


As a guide to settle the IVA, we would suggest proposing to match what you originally agreed to pay in to the IVA through your contributions. In total you agreed to pay £11,884.89 in to your IVA, to date you have paid in £4,605.89, which would leave £7,279.


Your creditors are entitled to receive 100p in the £ back plus the costs of the IVA. The decision to accept anything less than this would be up to your creditors.


If you do wish to proceed with offering a settlement figure, we would need confirmation of the offer you would like to make to creditors. We would also require a written offer from the third party who will be gifting you the funds to settle the IVA on your behalf and proof of the funds being available, this can be a copy of the bank statement confirming the funds available, we only need it to show the balance. We would also require some form of ID for the third party and proof of address, this could be a copy of their driving licence and a recent utility bill.

By reading that would you suggest I make an F&F offer of 7K ?

Kind regards

If I were in your shoes, I would certainly give it a go, but that has to be your decision. If creditors accept, you are free from the IVA early, if not, you just carry on with the IVA anyway.