Income + Bonus

[CJ08]

Ive just recently done my I&E for an IVA i was asked if i earned bonus with my salary of course i said yes i was then informed after telling them on average what i got as it looks consistant (averaged over 3 months) then this would be acceptable my only concern is i may have 2 weeks off work for a holiday and then my money left over (after my iva) will be gone and have all the emergency money etc would be very little.... before i sign and send back the proposal (on its way to me) what should i do!? or has any one else had this said to them before? I know from what i have read if i earn a bonus there is normally an agreement of what percentage the creditors get.... One other thing they mentioned im allowed to take home upto 10% of the salary they declare im just a little bit concerned that i may be left "hung out to dry" The only reason im going for IVA as im on DMP atm and my salary has slightly increased b4 bonus so it only makes sense!

[pixie]

Hi Cj, welcome to the forum.
Is your bonus guaranteed and being used as part of your salary in the proposal? If it isn't guaranteed and is variable it should come under the 50% bonus rule and not included within the basic salary. You could run into problems otherwise if you didn't get the bonus one month.
Just make sure your i&e is correct and you can live on it before committing.

[CJ08]

Well... every month half my bonus is guaranteed because i go out my way to make sure i get to the amount i want minimum so in my eyes i see it guaranteed but for obvious reasons the creditors may not.... the other half is all down to how the office performs and if the office does its target then we get more.... the last 2 months that part hasnt come in and these 2 months are the 1st time its happened like that for a year so it is pretty much guaranteed! What also surprised me on the 50% rule is i was told dont worry about it until my review but surely if leave it 6 months or a year (however frequent they are) this will put me in a more worse situation than im in now as i may not have it available to pay.... but should that happen ill approach them and offer then and if they dont take it i guess the ball is in their court!

[Viki.W]

Welcome to the forum. As Pixie has said, you really need to make sure all the figures on your proposal are correct before you sign anything. Do not rush into this if you think you can't stick to it, call your IP on Monday and tell them about your worries. You certainly don't want to be worse off. X

[indebtforever]

to be quite honest the iva should only include your basic income because your bonus payments will be iregular you will need to tell them this.as for bonuses these should be sent in seperate after tax and halved so when you are due to go on holiday you will send nothing that month then continue the next and so on if they tie you to a set amount with bonus what happens when you dont make any and your payments are already set?

[pixie]

ok, it shouldn't be included within your salary then as it isn't guaranteed every month. I would reccomend sending this to them on a monthly basis though. It cuts out the risk of spending it! It has to be handed over anyway so it's usually best to do it at the time.
When mine was set up I had a monthly bonus which was pritty much guaranteed and was taken 100% into my basic salary. The bonus scheme then changed and has to be earned! which would be a problem if for some reason I don't get it!!
Just make sure all the figures add up and it's affordable without using the bonus. If you don't pay the 50% over monthly, make sure you save it. Not paying it would put the iva in arrears and it could fail. For peace of mind it's better to do it as and when you get paid.

[CJ08]

Exactly that was the point i was saying to the IP because you never know when you are likely to have a lengthy period off sick so far i have been luck as last time i had sick leave was 3 years and i was off for nearly 3 months and that was what the start of all this debt where i stopped making payments due to one company encouraging me to say i earned more than i did on basic! I do believe that my basic is what i put forward for now as i know this is guaranteed and i cant get the iva on my basic so DMP is still best i just increase my payments by £25 you just never know what is around the corner!!

[indebtforever]

Hi how much debt have you remaining to pay? and iva needs a lot of thought you will be tied in for at least 60 months with the extra bonus etc could you not get it off quicker?you will also need to add any equity you have in your home also if your a home owner

[CJ08]

IVA is a quicker solution for me if i can get it on my basic as DMP takes about 11/12 years to clear it if i look to increase the DMP will take it to 9/10 years! i dont own my home and im in private rented flat! Ive been looking at several companies as something like this takes a lot of thought.. Im just waiting for these "drafts" 2 people are sending me!

[indebtforever]

have you not been advised about BR?

[CJ08]

I cant really go that route due to my job i have thought about it but i have been on dmp for a year and abit and not had a problem so far i took the 1st dmp that came along so i could get the ball rolling asap to help ease the stress on the debts! unfortunately they charge £30 of my £200 in fees pm so once ive decided and if i was to stay dmp ill move to payplan or someone else that does charge for dmp and pay that little extra i wanted to try for plus the £30 and will clear it quicker! but who know's!

[indebtforever]

out of interest which firms are you talking to and do they charge upfront fees?

[CJ08]

Ive spoken to melanie and she adv against it due to my basic salary and go DMP, payplan, churchwood/kingsgate (these ones encourage the bonus but im on DMP with them) and another company... Im more inclined to stay DMP with a company with no fees as per melanie's advice until my basic picks up at next salary review in 3 months time!

[indebtforever]

yes good idea its a big step and needs much thought and advise at least you are not getting hounded at the moment by creditors

[CJ08]

yeah the thing i like about DMP you can increase and decrease at anytime! ive had to decrease once due to changing jobs and the hassle i got from creditors not all of them accepted the decrease! Im now awaiting a callback from payplan as they sent email from the convo we had the other nite and at the minimum ill move to them for DMP as i know all my money goes to the creditors! for reference one creditor wouldnt accept payments that was less than the fee i paid to churchwood! but is see their point tho!!