Please can someone help me. I've paid 46 payments on my IVA of £324 per month and I'm likely to receive a equal pay offer of around £21k. My original debt was £33,260. I thought this would get me out of my IVA and so I contacted by IP to find out what I would need to pay to end the arrangement. When I told them I was expecting a payout they said I'd have to pay 100 pence in the pound and have just given me a quote. They say I will still need to pay £26,579 to achieve this. I feel like crying, in fact I am crying. This means that even with my payout I will still need to continue paying for another year. I might as well not have it. It wouldn't matter so much but I am desperate to leave my job and relocate back to my home town. I loathe the work I do and for the last 4 years have been suffering from depression which I know is caused by the stress of all this. I cannot believe that there is not a way for me to pay this off when I see people making offers of reduced amounts all the time and it being accepted. Because I'm not familiar with the industry I'm not sure what I can do, what my next steps could be. I cannot do another year like this it is making me extremely ill. Can someone please suggest what I can do, if I can make an offer and what would be reasonable amount. Thank you for any help you can give me.
Hi, yes I'm going to receive a payout of about £21k - it's an equal pay claim payout. So in addition to making 46 payments at £324, I now have this payout to give to the IVA but have found out it still isn't enough to finish paying the iva off. Does that make sense?
It does; it sounds like it would fall under the 'windfall' clause and as such would, unfortunately, be taken into the IVA if that turns out to be the case. As I understand it, the general rule is that if compensation is given for pain and suffering it's not normally classed as a windfall but this will vary.
I'd be speaking to your IP again and pushing for it either in full or at least under the 10-50/50 rule - if you manage to get them to agree to it then you could look to make an offer based on remaining payments (£324 x months remaining) to settle the IVA.
If you don't ask, you don't get. It's worth considering that it's very much in the IP's interests to get the whole amount as they'll get their 15% cut of the greater figure.
I'm no expert though, hopefully someone wiser that me will be along to comment. Good luck either way, you're not alone in your IVA, we all know how it feels.
Last edited by thisusernameistaken on Tue Mar 31, 2015 11:38 pm, edited 1 time in total.
I'm sorry to hear that you are feeling that way- it's not easy and as a sufferer of depression myself, it's not easy to balance that wih work and the stress of an IVA.
Depending on what your payout is for, your proposal would have stated what to do with any funds that you recieved. In our case a bonus of overtime was 10/50/50 rule and if we got a lump sum of £500+ this would have to fully payable into the IVA.
I echo what's already been said and depending on where the funds have come from, speak with your IP and explain all that you have above and see if their is anything they can do to help.
Started IVA 27th Feb 2012 - Due to complete 27th Jan 2018 !!
Full & Final submitted and accepted 30th March 2015, paid 10th April 2015 - 3 yrs 1 month into IVA
Completion Certificate received- 30th April 2015!!
Check to see if the payout will be subject to tax and ni (some arrangements are not but worth checking) - if it is it can't be classified as a windfall and you may get to keep 50%.
Irrespective given the situation that you have identified see if they will accept contributions to date if the whole payout has to go to them.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
A lot will depend upon the views of your IP .. but I would argue that this is a back dated pay increase, which should see you keep at least half of it, which you can then offer as a F&F ( based on payments left -- NOT amount needed to pay off the IVA - which is 100% of the original debt, plus fees and interest).
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I agree with Foggy that this is not cut and dried. Had the correct amount been paid at the time it could have been dealt with under the 10% 50/50 rule or a 50% increase at review time.
Personally, I would think a variation for a full and final would be best. You offer a certain amount explaining that you want to leave the job and return home and you would need to retain some funds for relocation and living expenses. This should be acceptable to creditors as otherwise you would be advised to seek independent legal advice as to the correct split of any compensation award. If it went to court I feel a judge would have sympathy for you and the IP would want to avoid this.
Thank you all for your help, it has given me some hope. I have a further question - what if the equal pay claim is for a period prior to the IVA starting, could it still be argued that the 50/50 rule applies?
Also, this award is subject to tax and national insurance if that does make a difference - as mentioned by someone earlier.
Last edited by Susan.w on Wed Apr 01, 2015 10:01 pm, edited 1 time in total.
As the payout will be subject to tax and national insurance (which means 1. you are going to lose at least 20% of it before you receive it and 2. could impact on your tax coding significantly at the end of the current tax year or in the next one) it is not a windfall.
50% (after tax etc.) will need to be handed over - the other 50% you should be able to keep and you offer that as a full and final offer/make an offer from it of 12 times normal payments (and if not accepted the money is retained by you).
The wording on everything is critical
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
Anything that relates to pre IVA would in my opinion be a windfall. The underpayment of wages would have contributed to the insolvency so the funds belong to the IVA creditors.
It may be worth legal advice but I think a reasonable discussion with your IP would lead to a suitable outcome.
I read this and felt compelled to write something. Although I can offer no practical advice about how to approach an IP to get this sorted, I can appreciate how you feel and can identify with the feeling of being trapped completely and the utter frustration and horror that believing you have a way out when actually you are made to feel you don't is awful. Just hang on in there though as a solution will be found, I'm sure of it.
It does seem odd that despite being part of your salary that can be taxed this is classed as a 'windfall'. I find it a mystery how this whole IVA thing works at times. Individual IPs seem to have their own rules over certain things and it can be quite baffling. Going into one I was so strung out over my debts that I probably didn't ask enough of the right questions. Now I'm in one I feel that things I thought could be upheld simply can't. I will end up paying more than I originally owed and that the whole thing is due to go on a lot longer than I was led to originally believe. It's very frustrating to say the least.
I too am trapped in a very unhappy work situation and I often feel that I just can't go on the way I do, but somehow I get through. I feel that my life simply won't move on until the IVA is all done and dusted. It's a bit of a nightmare at times. I wonder how many people in IVAs suffer from anxiety disorders and depression directly and indirectly as a result of being in one of these.
I think the last post urging you to get some independent legal advice was spot on, but in the meantime just try as much as possible not to let this overwhelm you if you can. Easier said than done I know. Good luck.
