Pay rise?

[JoeB]

Hi I am beginning the process of seeking a promotion infact been on interview today - If I am successful it will mean a significant pay rise. I am assuming I will to have hand over half the pay increase yes? [?]

By the way not posted for ages but I have been reading - keep up the good work clearly a massive amount of support coming from this site and I know it helped keep my sane during the IVA application process

[Oliver]

It is actually likely that all of this money will have to go into the IVA. However, if you can show legitimate increases in your expenditure casused by additional expenses in line with this promotion or rises in living costs due to inflation you will be able to offset these against the increase.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[iva experts]

Hi g.g.r,

Usually the clause for 50% relates to overtime, bonuses and commission. Payrises on the other hand need to be handed over, Oliver makes a good point that if you can prove that your expediture has increased then this will offset the payrise.

Best to talk to your I.P if you do happen to get the promotion, just to keep them in the loop.

Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

[JoeB]

What about future expenses - eg my daughter will go to university in 3 years time if all my rise goes will they then reduce the payments to allow for the increase in expenses while she is there. If not it seems really unfair - on current basis we will payback about 40p/£ - if all the pay rise goes then we would probably be close 100p/£

[Adam Davies]

Hi
The issue of payrises and all of it going towards your IVA has been debated many times on this forum.
I personally would like to see it fall under the 50% clause but creditors have a different view,usually.It's hard to take on the responsibilities of a new job if you are no better off financially.The only way to look at it is that you will still have this better job and more disposible income when your IVA finishes.
Check your chairmans report as some IVAs simply ask for 50% of any extra above the amount first stated in the proposal.Also have a chat with your IP
regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

From an IP's perspective, I believe that if you receive a significant payrise then your whole income and expenditure should be reassessed. It might seem attractive to rely upon the 50% uplift provision, however this may not take account of any increased expenditure you may incur as a result of the increase, such as additional travelling.

And as Andy says - your own IP's decision and interpretation are what really matters, so this question really needs putting to them.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[iva experts]

Remember in an IVA an individual must pay as much as possible it is not just one monthly payment for a 5 year period.

Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

[petervr6]

thanks for the info everyone! makes interesting reading! For example i am in the process of going for an Iva as soon as the paperwork comes through for me to sign and send back and get the meeting arranged.

So i understand that if i get any pay rises within the 5 year period i will have to give it all to the IP apart from increased expenditure (at the yearly meetings). But what happens if say for example i am able to almost double my wages in the next say 3 years? If my expenditure stayed the same would they make me pay the increased wages all to the creditors? That would mean no incentive for me to get a pay rise really?

And what happens if i did get these pay rises and could pay back alot more, would they stop taking payments once the entire debt is cleared if it is within 5 years of the start date of the IVA?

[MelanieGiles]

One of the main factors of entering into an IVA, is a desire to wish to see your creditors repaid as much as you can afford over a realistic and set time period. So if that means that the creditors get paid in full earlier, as a result of an increased salary, that has to be good doesn't it?

Of coure you are right in that if you are going to better yourself to enable a better return to creditors, there has to be some incentive for you to do that. This is why it is usual for there to be a 50/50 sharing of increased expenditure.

This is covered by the IVA protocol, which is not yet used by the majority of IPs, so I suggest that you ensure that your IP either uses the protocol or makes sure that your interests are also provided for if you are fortunate to be so lucky to receive such a substantial payrise.

[petervr6]

Hi Melanie!

Thanks for the reply! Yes of course it would be great to pay back the creditors asap! I am just saying that it would mean that for me personally it wouldnt be worth the extra work i would have to put in to get a rise if i dont see it for 5 years. Although i understand that in 5 years time i would be far better off for 2 reasons 1-all my debts would be clear and 2- i would then be able to take all of my pay rise!

Well I am in the process of setting everything up with you Melanie, well your team anyway. Do you operate such a protocol?

Sorry to go over things again but what exactly do you mean by "This is why it is usual for there to be a 50/50 sharing of increased expenditure"?

[MelanieGiles]

Absolutely - I embraced the IVA protocol as soon as it was introduced in February, so you will find that you will be allowed to earn up to 10% of your basic salary each month, before sharing any balance on a 50/50 basis with your creditors. It is difficult to argue that this is unfair.

Sorry - my earlier post should have read sharing of disposable income, and not expenditure. Having a blonde moment as well this evening!!

Give me a call at the office if you want me to chat this through with you.