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Hi,

I've got a specific question regarding IVA's. I think I may go for one soon - as the stigma of bankruptcy and the effects on my young family would be difficult to bear. An IVA seems like a good compromise. My debts are in the high 30k and I think I would qualify.

I've been taking some soundings and getting advice from various quarters before I apply. I was concerned about what would happen if I went for an IVA and my circumstances changed in the future. I imagine my creditors would want to know immediately if my income went up or down - in order to get a share of an increase or be advised of a decrease.

But my question is "Do the terms of an IVA cover a person's OWN income - or could they be applied to a wife or partner?" If my wife started working, in addition to me, and the household income increased as a result, could the creditors reasonably expect a share of the extra income, even if she hasn't signed anything and the IVA is actually only in my name?

Would I be breaching the terms if I didn't declare such an event?
Would the creditors be monitoring my wife's circumstances?


many thanks in advance if anybody can help : )

P

Hi battlingon.

If your wife went out to work, and your household income increased, then the creditors would expect a share of the extra income, I believe it is to do with the money your wife would contribute to the household income which would free up more of your income.

As to your own income, the creditors would need to know of any payrises or increase in income. A cost of living rise is usually not touched, but overtime and bonuses probably would be, depending on how much you earned.

If you did not declare any extra income that could be construed as a breach of an IVA, but why would you want to lie to your creditors? Surely you would be wanting to pay back as much as possible of your debt.

I doubt the creditors would be monitoring your wife, but it would be deceitful not to tell them.

One of the more technical experts will probably be along and expand on this further.

Many thanks Kallis3 for your advice. That's what I suspected really. I wouldn't want to lie to my creditors - no way. I was giving a hypothetical situation and imagining the consequences of not declaring a change. I just wasn't aware of the scope of coverage of the IVA terms.

Thanks again

(edited to add...)

On a related point, this month, I discover the results of an appeal I lodged against a job evaluation. The evaluation found that I should be downgraded - the result being an annual loss of income of approx £4,000 - which would kick in in two years' time.

My question here is, if my appeal fails and my income does go down, "would any monthly payments be decreased accordingly?"

Assuming an IVA was set up in the full knowledge of the loss of income, can it be assessed with this change in mind?

It is something that would have to be taken up with an IP.

You need to speak to someone, explain your circumstances and they will give you all your options. Melanie Giles, who posts on here, comes highly recommended.

Alternatively, check on www.iva.com for a list of reviews of companies.

As to bankruptcy, which you mentioned on your first post, the stigma is not the same as it once was, and you could be discharged within 12 months.

Hi battlingon

If you propose an IVA, your IP must take all eventualities into account, so if you are at risk of a £4k pay reduction, personally I would take that into consideration now either by lowering your disposable income to that level now - caveated of course with the fact that you pay the higher payment until the reduction kicks in.

Also with regard to your wife, you would need to declare this change of circumstances to your IP, and a reassessment of your income and expenditure would be effected to ensure that you are both then paying a fair share towards the household bills, however I personally would not seek your wife's share of any disposable income left - why should we as it is her money! There has to be some incentive for the lady to return to work in the first place, and I am sure that this is not to pay over all of her money to your creditors - even though she may well have benefitted from some of those debts.

Hope this helps.