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Posted: Mon Nov 30, 2009 8:51 am
by Chinochihuahua
Hello everyone- We're just in the initial stages of getting all our documents together for our IP. Because of our situation we're going to offer a lump sum in full and final settlement as we have insufficient income for a regular contribution IVA. I was wondering the following. At work, i'm contracted to work 21 hours but i've got the opportunity to do some overtime. I'm worried that if I do the overtime (which is unusually available) the creditors will deem my income to be higher than declared and will also be expected to make a monthly contribution. Overtime is rare so I couldn't be committed to making a monthly contribution. What are your thoughts?
Thanks as usual
Posted: Mon Nov 30, 2009 8:59 am
by thefsg
Usually overtime is done on the following rule:
- anything up to and including 10% over your normal net pay you keep
- amounts over that will be split 50-50 between you and your creditors
For example if your normal net monthly pay is £800 and you take home £1,100 one month then you keep £80 (10% of £800) plus £110 (50% of the extra £220 left once the £80 has been taken off). In total you'd keep £190 of the extra £300 and pay £110 to the creditors.
I'm not sure if this applies with a lump sum IVA though.
Posted: Mon Nov 30, 2009 9:05 am
by kallis3
Hi Chino,
If you are going to make a full and final offer, then I don't think the overtime will affect you as you won't be making monthly contributions.
The creditors will hopefully accept your offer and the IVA will be completed once the money has been paid across.
Posted: Mon Nov 30, 2009 9:14 am
by Declan at DebtFreeDirect
Hi Chino
The guys are correct. Overtime is rarely ever guaranteed and as such it cannot be used as part of your fixed monthly income. Instead, a proportion is used usually 50%. When preparing your IVA, your IP will be aware that you cannot commit to regular overtime and will advise accordingly.
Thanks
Posted: Mon Nov 30, 2009 9:23 am
by MelanieGiles
In any case if you are borrowing the money to offer the full and final settlement, presumably any disposable income you derive in the future will be needed to pay back that loan.
Posted: Mon Nov 30, 2009 9:45 am
by Adam Davies
Hi
Even if you had some regular disposable income available you could offer a full and final based on the fact that you are going to use this disposable to repay the third party that has lent the money.
Regards