All of these issues are very valid, and I thought it might be helpful if I gave some pointers as to how I manage things like this for my own clients.
Firstly, general salary increases and 50% increases relating to bonuses, overtime and commissions, rarely result in producing significantly higher dividends for creditors. From my point of view, the additional work required in policing client's wage-slips, far outweighs the eventual return. Under the proposed changing legilsation for IVA's which is likely to come in in 2008/2009 it is suggested that salary reviews are conducted only once per year, or not at all. I personally think an income and expenditure review is necessary, but once a year is sufficient at the time we produce our annual report to creditors.
My advice to all of you is keep detailed records of your expenditure during the first year, as you have the opportunity to amend your budget at the anniversary, at which time you have a whole year's experience of careful budgeting. Don't forget to keep notes of all expeptional expenditure such as family haircuts, unforseen repairs to house and car, school trips and excursions, kitting out the kids to go back to school in September. These things may sound daft, but they involve you spending money you may not have budgeted for within the IVA proposal.
At the time of your annual review - talk to your IP or their staff and tell them about any variances. I send a revised form out to all of my clients, inviting them to provide me with current figures, and these schedules are reproduced to creditors within an annual report. I have processed over 1,000 IVAs in the last 7 years, and I have never had a creditor querying increased expenditure - so long as it is within reason. Don't put down that you want to take the family on a three week cruise, as that probably won't go down to well!!!
The bottom line is that at annual review stage, it is the IP who makes the decision to increase payments, and to do this he/she needs your agreement too! And also don't forget that most of us are actual human beings as well - we have families and homes to run too. Personally, my home gas bill has increased from £150 to £190 over the last year (don't ask - we live in the country on LPG) but that goes to show that things do go up, and you still have to live!
Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at:
http://melaniegiles.blogs.iva.co.uk
