www.iva.co.uk

I am currently under an IVA and my wife is looking at going back to work having been off several years following the birth of our second child.

What effect would the increase in monthly income have on the IVA? let's say for example she earns £600 per month, would we have to pay 50% of this to the creditors on top of the agreed amount?

We get a little child tax credit/working tax etc. but this would stop as of next year. I'm just worried byt the time we've paid everything it really won't be worth her going to work/arranging childcare and so on.

Appreciate any advice! Thanks in advance.

Justin

justin.m wrote:

I am currently under an IVA and my wife is looking at going back to work having been off several years following the birth of our second child.

What effect would the increase in monthly income have on the IVA? let's say for example she earns £600 per month, would we have to pay 50% of this to the creditors on top of the agreed amount?

We get a little child tax credit/working tax etc. but this would stop as of next year. I'm just worried byt the time we've paid everything it really won't be worth her going to work/arranging childcare and so on.

Appreciate any advice! Thanks in advance.

Justin

Justin, I had this problem. In the end, my IP is entitled to claim up to 50% of all new income - that said, it has to be balanced with any cost increases. The main thing is to advise your IP immediatley - you may be surprised how little this will impact on you. When is your annual review due?

Not due until next May. Whilst she is keen to return to work for both money and sanity reasons! I would hate to think she is working for nothing!

Justin

justin.m wrote:

Not due until next May. Whilst she is keen to return to work for both money and sanity reasons! I would hate to think she is working for nothing!

Justin

Yea, we had the same dilema - but then 50% is better than nothing and it does all go toward reducing your debt......in our case, it really wasnt worth it and my Wife stopped working although this was just a cleaning job paying near to peanuts

Am I right in thinking the 50% would be additional to the agreed amount though? Let's say we owed (in theory) £50k, IVA was for £15k over 5 years. Any additional income over the agreed monthly amount would go on top of the £15k?

justin.m wrote:

Am I right in thinking the 50% would be additional to the agreed amount though? Let's say we owed (in theory) £50k, IVA was for £15k over 5 years. Any additional income over the agreed monthly amount would go on top of the £15k?

Yes, I belive that is so, but in all honesty, I am no expert. Generally, your IVA will specify that it can claim up to 50% of all new income. This will not neccessarily be in addition to your agreed payment as there are variables that need to be taken into account. Dont wait until May - speak with your IP.

Thanks Andy, appreciate your advice.
Justin

Hi there justin.
The best thing to do is to speak to your IP. I think a new income and expenditure would need to be worked out, taking into account the loss of tax credits and the extra travel for your wife, also if she is not in an iva then her income would be assessed so that she would be paying her way towards the normal living costs, pro rata to earnings. Usually the 50% will refer to yo,ur income if you are the only one in the iva. So the 50% would not apply to her wage, but as said I and E would need reviewing as your outgoings may be less. Hope that helps.
Someone will correct me if wrong as I am not a technical expert.
Yes any extra paid in just means that bit more for the creditors.
All the best keep us posted as to how you get on.

Ang

I thought the 50% clause was for overtime etc? If you had a wage increase surley this would all be paid into the IVA, minus any increase in expenditure but this generally was nothing to do with the 50% clause?.

Like Ang says though if your wife isnt in an IVA then her wages should not be paid across at all.

Hi
This has been a topic of hot debate on the forum for a long time.
Any promotion and subsequent pay rise should be treated 50/50 rather than all of it going into the IVA,this will give people an incentive to better themselves and will benefit both the individual and the creditors
Regards

Uhm, I thought the 50% was for total household income not just mine.

One of my creditors chose not to vote and as it was an overdraught on a joint account they decided to chase just my wife for the full amount, she now has an arrangement with them to pay monthly, it will take 56 years at the agreed rate, surely they'd have been better saying yes to an IVA and getting a decent % back in 5 years!
They took into account the household income/my IVA etc. before arranging payments. Personally I think because they chose to chase her and not me they shouldn't have the right to take my wages into consideration.

Anyhow, thanks for the replies, I guess it's one for my IP company to give me the definitive yes or no.

Cheers,
Justin

andydavie wrote:

Hi
This has been a topic of hot debate on the forum for a long time.
Any promotion and subsequent pay rise should be treated 50/50 rather than all of it going into the IVA,this will give people an incentive to better themselves and will benefit both the individual and the creditors
Regards

Thanks Andy, appreciate my promotion/increases etc. for me would incur the 50/50 but was just unsure about the missus earnings!

Justin

Thanks for clarifying Andy