I have been in an IVA for seven months now. Although I am married my debts were entirely my own and my wife is not party to the IVA despite the fact that her income was obviously taken into account when assessing me to see whether or not I qualified.
Recently my wife set up an internet business which looks like it might take off and we are worried that if she makes some money it will impact on my monthly payments.
She does not make the payments, they are my own responsibility and we are both adamant that my debt problems are my debt problems and not hers. We keep our finances entirely separate and, luckily for her, we always have.
What is the situation please, can my payments be increased because my wife's income has increased? Are my wife's bank statements and payslips asked for again at the Annual Review (it was enough trouble getting them off her when I made the application)?
Will my creditors effectely renege on our agreement, asking for a new monthly contribution that I can't afford, because my wife is successful?
Your wife's income will have some impact on your future IVA payments, as if her share of the contribution inwards increases so should her share of the contribution outwards - ie she should pay a higher share towards household bills which will increase your individual disposable income.
She will hardly need to produce her own bank statements as part of your annual review, unless you both agreed to do this at the outset of the IVA. However your IP will want to see details of her earnings, and you may be obliged to increase your payments. It will be difficult to claim that this is unfair.
Did you spend all of the money you borrowed completely on yourself?
Melanie is right and it may well be that the proportion of the household expenses should be pro-rated in proportion to your gross income and your wifes net profit befor taxation.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
MelanieGiles wrote:
Hi there and welcome to the forum
Your wife's income will have some impact on your future IVA payments, as if her share of the contribution inwards increases so should her share of the contribution outwards - ie she should pay a higher share towards household bills which will increase your individual disposable income.
She will hardly need to produce her own bank statements as part of your annual review, unless you both agreed to do this at the outset of the IVA. However your IP will want to see details of her earnings, and you may be obliged to increase your payments. It will be difficult to claim that this is unfair.
Did you spend all of the money you borrowed completely on yourself?
Hello Melanie, thank you for your quick response.
The short answer is yes. My wife did not benefit in any way I can think of from my debts.
My wife's hope is that if her business is as successful as she thinks it can be (no comment from me!) she will be able to pay to send our child to a fee-paying school. You and others may baulk instinctively at this when considering my position but there are particular local and personal circumstances why this would be a good thing for our kid, who has certain issues about mixing with crowds. It wasn't our child's debt after all.
Whilst I think this is probably a pipe dream I really hope I'm wrong and would love it if my wife was able to achieve this, albeit with some embarrassment that I would not be in a position to contribute. However what you seem to be saying is that my wife's ability to do what she pleases with her own money would be seriously compromised by my own past stupidity.
Please tell me I have misunderstood you - I deserve everything I get but my wife and child are innocent in all of this.
Not a pipe dream but possible subject to my other comments posted above.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
David Mond wrote:
Not a pipe dream but possible subject to my other comments posted above.
David, there is a reassuring tone to your response but you'll need to persist with me because I'm notoriously slow on the uptake. Are you saying that any school fees incurred by wife would be factored in when assessing disposable income?
I thought I read elsewhere on this forum that private school fees would be considered a luxury and not taken into consideration for the purposes of an IVA?
This was a previous post by 'uptomyneck' which seemed acceptable to most experts that commented - I copied for future reference just in case....
"Try to think of it in terms of your household expenditure being fixed, but as you will be earning more money, your notional share of those expenses for the purpose of calculating your husband’s disposable income will increase. Simple example - your husband earns 20k a year, and you earn 10k a year (so 30k total of which your husband earns two thirds and you earn one third) - let’s assume your monthly food budget is say £300. This will be allocated £200 to your husband, £100 to you (two thirds to him, one third to you). If you then start earning the extra £500 a month, your salary will go up to £16000, so the proportion of the food bill will be adjusted accordingly to roughly £170 to your husband, and £130 to you (as your husband now earns 55% of the total household income, so he is allocated 55% of the household bills).
So as Jan says, you will find that not all of your extra money will be expected to be paid over, it just means that your husband will have more spare income to pay in as you will be allotted a higher proportion of the bills.
His share of food bill works out at £165 per month using the £300 example, so as a result of your increase in wages, he has freed up £35pm extra to pay in to his IVA."
I cannot necessarily see that this would be a problem. If your wife wishes to promote her business through her own efforts to educate your child in a more appropriate manner then why not? But these are questions now to raise with your own IP directly, as they have detailed knowledge of your case and we do not.
StoneyB - you will on educational grounds in area you live or religious or special needs are all grounds for paying for private education from your wife's pot. Let us know how you get on.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
