www.iva.co.uk

Hi I am just coming up to the end of the Third Year of an IVA. We have paid regularly increasing payments when necessary and in advance of being asked. SO I believe we have a very good record. Since we started the IVA our circumstances have improved greatly. However as a result of this I am away a lot and work very long ours. We were under the impression that we would keep 50% of the increase which would make the increased pressure worthwhile. However, our IP has insisted that this is only until the aniversary each year then we have to hand over all the increase. Is this correct? Also although we increased our expenses at the end of the first year we didn't at the end of the second year. I therefore think we are paying a LOT more that we should. Can you explain EXACTLY how this should work and if possible where I can look for evidence of this to show my IP. Thank you.

Hi Sandra and welcome.

Is this increase your annual pay increase or overtime?

If it is your pay increase, then your IP should be looking at how your expenditure has altered before asking for all of the money.

If it is overtime, then check on your proposal. You are usually allowed to keep the first 10% and then pay over 50% thereafter.

I don't understand your post Sandra, sorry! The answer to how much you have to pay over lies within your proposal as Jan has already stated, and I think there is some confusion with what you have been told, or how you may have interpreted the information provided.

It is usual to only have to pay over 50% of your additional earnings from overtime - after all what incentive is there for you work these longer hours if you are not going to benefit from this? If the increase comes from a salary increase, then they could be correct to take the lot - check in your proposal.

Hi thanks for the comments but sorry I am STILL VERY confused. The increase is due to a change of job to a job with greater responsibilty but also increased hours etc. It is therefore an increase in salary.
As far as the agreement is concerned this doesn't really help as I find it VERY ambiguous. In one section it states that I should pay 50% of any net income recieved in excess of the original agreement. THEN in a different section it states that the supervisor will review my income and expenditure at annual intervals to ascertain if it is possible for me to increase the level of contributions. These two statements appear almost contradictorary. If anyfuture increases are to be taken away what incentive is there for me to seek them?
What I want is some clear non ambiguous advice. Can any of you help me!![:(]

Ah - now I understand. 50% of net income received means that you have to pay over 50% of any money which is in excess of the income figure you quoted in the proposal. So if you included the sum of £1,500 as salary when the proposal was initially issued to creditors, and are not taking home £2,750 - your payments would increase by £625 per month.

The statement about annual review, merely gives the IP the opportunity to take a general overall review of your circumstances to see if the base level ought to be increased.

You have to appreciate that non of the experts on this forum have detailed knowledge of your case, and you should therefore only use the site for guidance. Your own IP is appointed, and is being paid by your creditors, to monitor your proposal and to ensure that it is operating in accordance with the agreed terms and conditions. You will need to seek proper advice from them in the first instance, and if things are then still unclear, you could take a second opinion from another IP or a lawyer with experience of insolvency matters.

Did you find the proposal ambiguous when you signed it in the first place - and if so was this queried with the IP at that time?

Hi Melanie

Thank you for your comment and really this hits the nail on the head as it were. At the time of taking out the IVA we felt that we did understand the 50% rule as it were but then the goal posts seem to have been moved. At the end of the year when the first review happened we were suddenly told that we could only keep the 50% until the review. This was the first time this was shared explicitly with us and I find references to it in the documentation very ambiguous. As well as confusing us it dented our confidence in our ability to discuss issues like this with our IP.
As a result I am trying to get some independent advice which is why I posted to this forum. Yor suggestion about consulting another IP or Lawyer is of course valid but considering the fact that through an IVA our finanaces are of course and rightly so controlled this would be difficult for us financially.
Any comments from yourself or any other forum members would be very welcome. It would also be good to hear from anyone who may have been in a similar position. Thanks again Sandra [?]

Another opinion from an IP will not cost you anything Sandra, the IPs who post on this forum regularly do pro bono work as we believe that this enhances the perception various parties have of our profession - and sometimes it is just the right thing to do when a client is not getting a proper service from their own IP.

To provide definitive advice as to your position, you would need to produce all documentation relating to your case so that this could be properly reviewed.

As an alternative, might I also recommend Paul Johns of Reviva, who I am sure might also be prepared to assist you. Paul regularly mediates between IPs and clients, and as he is not an insolvency practitioner, your Supervisor may not think that a fellow professional is trying to "score points". Paul posts as an expert on the forum, and I am sure would be delighted to help you sort this out, if you feel that your own IP is unapproachable.

It purely depends on what your Proposal states as to whether it is 50% (after allowing you to keep the first 10%) in respect of overtime or whether it is 50% of any extra net income (note the word net)or whether all of the net income has to be paid in. Net income is after deductions for all expenditure relative to your household requirement. Regretably you don't get any reduction for working longer unsociable hours - maybe you should. As I stated it depends exactly what your proposal states. Let us know how you get on by posting here please.

Hi David Thank you for your post it is interesting. The fact that the terms of these proposals vary so much was NOT made clear to us at the outset. Also the wording as it stands is VERY equivacle. How can I get help interpreting the technical language without incurring a huge amount of additional expense. Also can you change IVA companies mid contract? Is there an independent watch dog for these things? Sorry rather a lot of questions in one go I am afraid. Thanks [V]

You cannot really change IP companies half way through without very good reason and an application to Court. Your route for a complaint is via your IP's regulatory body, but this is not complaint material - this is having your IP clearly explain to you what their interpretation of this means. Net income for instance could also mean net income BEFORE allowable expenditure - but I personally share David's interpretation.

Either David or I would be happy to review your proposal and Chairman's Report for you, but at the end the answer largely lies with your own IP. Who do you have currently acting for you?

You could type here what the relevant clauses state and either Melanie or I could then attempt to interpret for you.

Thanks David I am away at the moment working but will do this when I get home. Thanks Sandra