hi there my partner and i are 12 months into our iva . my partner is due to start a new job and will be earning more money, i understand we will pay in an extra 50% of this increase into the iva. what i need to know is does this mean the iva is paid off more quickly or do the creditor's receive a higher amount of money off the debt? thanks
Any extra money will increase the return to creditors and not shorten the term unless creditors have been paid in full. However, the increase may not take effect until after the annual review and allowing for costs of living rises so he may not need to pay the full 50% of a raise.
Unfortunately the term of your IVA will not shorten until the total balance of the debt has been repaid plus the IP fees for administering it. If your dividend is well below 100p/£ then I doubt this will be the case. As Michael rightly says, when you have your review the household income and expenditure will be reviewed so make sure the expenses reflect your cost of living at the time - the net difference may not automatically be the increase in your partners pay. To be sure, speak to your IP to understand the specific clauses in your own proposal.
Hope your partner's new job goes well.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
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