Please please Please help! I’m self employed and I’m a worry :(

[MrBT96]

Hi all. I hope we are well. So when I first entered into my Iva I was employed, but I’m now self employed and I earn more money than what I did. So i got asked to send another review out so they can take my payments to what I can afford and obviously being self employed my wages are up and down each week. But we came to an agreement on a monthly payment. But because they’ve gone off what I earn now. So for example i earn around £1500-£2000 a month. Say they’ve agreed to an £200 payment each month. So after bills etc I have spend £1800. Which leaves £200 disposable income so it goes into my Iva. But now say for instance I’ve earned £2300 one month. And my Iva payment had came out. I have £300 spare. But this is no my fault because I’ve earned my money from my normal week at work. I’m on price work by the way I get paid for what I do. This payment isn’t from overtime/weekend work or whatever. It is just from what I have earned in the week in my normal day to day. But when they reviewed me. They seem I earned that much extra over that month. So now I have had to pay them a £300 fee.. just because I earned more than what was agreed on. Now this is just an example. But I am in this situation at the moment... I am currently paying off an additional payment on top of my actual Iva because I earned more the one month. Please can somebody help me. How is this fair! For example o earned abit more that month. But my next month of work could fall short, so what do I do then? Because I’ve got no emergency money etc.. and is this going to constantly happen when I earn more money the one month?? Because I can’t garuntee what I will and what I won’t earn! I’m self employed if I don’t work I don’t earn! I just don’t understand but now I’m just so so so stressed out that I’m going to keep getting countercharges or whatever it is when I earn slightly more. I’m so stressed out what do I do?

[Foggy]

You need to agree a monthly income -- that will be your base income. It will need to be close to the lower months ( but you will have to suck it up if you drop lower every now and again. Then everything over this month each month should be split with the IVA as agreed in your terms. In many agreements you will be allowed 10 over the normal base income then the rest is split 50 / 50. Some agreements do not allow the 10% and are a 50 / 50 spilt.

In the example above the IVA should have only taken £150, leaving you with £150 to put aside to cover the months you earn less.

So -- say your agreed base income is £2000 a month and your regular payment to the IVA is £200.
One month you earn £2300-- if you have the 10% 50/50 version: the surplus is £300. You are allowed an extra 10% of base income, so £200 is yours and you split the remaining £100 50/50 .... so, the IVA gets £50 and you get £250. Of course you also pay the regular £200.
If you have the straight 50 / 50 version: The excess is just split down the middle and you pay the IVA £150, on top of the regular £200 and keep £150.

[luluj]

Foggy gives a very clear response and example- you should not be penalised and you should retain at least half of what extra you earn each month ....