I started an IVA in Jan 2013 based on a debt of about £15,000. Being single with my only income being a Civil Service Pension, my repayment was set at £150 pm. This year my State Pension has commenced. Taking this into account the money available to my creditors will be £540 pm which over the 3 remaining years amounts to some £19,000. My actual living costs (as opposed to the IVA guide) indicate I could afford £375 pm. Will the ISP take the whole of the State Pension off me?
I would have thought that this amounts to the equivalent of a pay rise and, as such, you will have to hand over 50% of the net increase at review. However, IP's approaches do vary, so it is always best to check with your own firm.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
This may have been addressed in the original proposal as it would have been known that you would receive this pension. What did the IP say would happen when this was discussed at the time?
It wasn't covered when the original IVA was set up. I informed the ISP when the State Pension started in June but was told it would be picked up at the annual review at the end of the year. I thought that the 50% rule would apply but I am confused because the calculation of money available to the Creditor from Income against guideline expenditure comes to £540 which roughly equates to 100% of the State Pension after converting it from 4-weekly to a monthly figure.
I also think the 50% rule should apply and perhaps the amount available for creditors is £540 but your actual IVA payment will be less. Your IP should be able to confirm this for you but if they are pushing for the full amount you may need to speak with them directly. Get legal advice if required as this is a substantial sum of money.
Last edited by Michael Peoples on Fri Sep 12, 2014 12:40 pm, edited 1 time in total.
If it made no mention of it in your proposal, then I may have deferred for a while and offered an F&F with it (pays a handsome 8% interest) Or wait it out till post the IVA and take the lump!
You will have to hand over 50% of any increased surplus as set out in your proposals.
Don't forget you have also agreed in your proposals to abide by the budget set by the common financial statement. As this allows unlimited costs for things like rent and utilities and only limits the variable "optional" expenses it should be accurate.