www.iva.co.uk

hi, i am currently in an IVA and i pay back £350 a month into it ..
i am potentially taking a new job which pays £1200 more a month.
therefore my disposable will be the £1200 plus the £350
paying back into an iva £1500 a month when i originally struggled amount in the first place were £1600..
doesn't make sense to stay in an IVA.. any advice on what happens in this scenario?

First of all congratulations with the new job and you will benefit from this. Your surplus may have increased but your IVA payments can only usually increase by half of the extra money so your payments will not go up to £1500. In addition your IP can make additional allowances for any extra costs incurred whether travel, childcare, clothing, laundry etc and this is before your new payment is calculated.

Finally, the interest and charges have ceased on your debts which was not the case previously and you will be debt free at the end of the IVA. My advice is to stay where you are and enjoy the extra cash. Creditors get a higher return than originally thought and given that your credit file is already damaged there is no benefit in coming out of the IVA.

In addition to Michael's post: You originally struggled to pay £1600 ... but, back then your income was £1200 less ! Added to this that the IVA will ony take half of the net increase, you will still be better off.

You will end up paying less than £1000 a month and be debt free in a few years. You could, of course, terminate the IVA, start paying back twice the amount to creditors (who will add back lost interest and charges) and face the possibility of enforcement if they so wish as well as being in debt for the forseeable future.

I've just had exactly the same thing happen. Was paying £780 and due to a new job, they want to increase to £1595 to take 50% of the additional surplus.

It's heartbreaking but par for the course.

My advice would be to work out how much you'll pay over the remainder of your IVA. If that's more than the original debt plus fees then find out how much sooner your IVA might end.

Also, make sure you put down the absolute maximum guideline figures on your expenditure. Not a penny less. Let them negotiate it down.

Best of luck
Andy

Great salary rise which in the long run will all be yours - for now pay over the extra and enjoy your share too ! Use it to do those things that have had to be a no no ... a takeaway once a month .... a weekend away ....

Thanks for the replies

At the moment up to 10% at the moment i keep myself. anything over that then 50% should be paid into the IVA and 50% is mine to keep
does that mean then with a permenentat pay increase of 1200.
10% of my current income ontop of is mine.
which would leave the £930 left.. 50% is mine and 50% is theres..
does that only work on one of pay bonus and such ?
does that make sense ?

darren681 wrote:

Thanks for the replies

At the moment up to 10% at the moment i keep myself. anything over that then 50% should be paid into the IVA and 50% is mine to keep
does that mean then with a permenentat pay increase of 1200.
10% of my current income ontop of is mine.
which would leave the £930 left.. 50% is mine and 50% is theres..
does that only work on one of pay bonus and such ?
does that make sense ?

10% 50/50 rules olny applies to overtime and bonus payments etc. Permanent pay rises are usually (some clauses differ slightly and some IP's try it on) all yours until the next review date and then the payment will increase by 50% of your net income increase from the month following the review. As mentioned, some will try, incorrectly, to take the increase right away, some are written so that it is due right away, so check your paperwork.

So, If i had the income at the start of the IVA the disposable would have been 100% theres .
current disposable £350 ( current IVA payment) . and could have been 1200+350 for the payment

but getting the pay rise within the IVA they are only entitled to take 50% of it at either the review date or immedeitely depending on the paperwork says
therefore they can only add £600 to my £350 = £950...

so with the payrise.. i can now do things with that money and spend on things i choice and not be taken from me or questioned ? live more comfortable within the IVA with that extra dollar?

I will also look at over the 4 years with the potential new payment if im paying over my debt+their fees. to potentially finish sooner..

am i understanding all this right ?

You have this correctly and it does make a big difference to you knowing that you will enjoy some of the cash. In addition when the review is done and the new payment set, your 15 50/50 rule will be applied to the new salary so any overtime, bonuses etc will be calculated using the new figure.

You could save a chunk of your share to use as a lump sum nearer the end to shorten it even further. That way you can spend a little, save a chunk --- and have an emergency fund in the meantime.

thats great to hear that i will be financially better of with the 50% in my pocket. and a higher figue in the 10% bracket once set up to earn extra if i choose to
can anyone point me in the direction of the maximum figues can use on the expenditure form. as now im in the IVa the assistance from an advisor in making sure things are decent is not there no more.. so when filling out the form at the review wanna make sure all is good

Put down what you spend which can always be altered or, if you email Michael Peoples, he will send you a list of allowances.

I will happily send you the list. While I agree that you should list what you spend there are other allowances which you may not think of such as sports/hobbies, meals at work, sundries etc so well worth checking.

Michael Peoples wrote:

I will happily send you the list. While I agree that you should list what you spend there are other allowances which you may not think of such as sports/hobbies, meals at work, sundries etc so well worth checking.

if you could send me that would be greatly appreciated. before i had the assistance of an advisor in putting together the list. but i dont know what i am entitled to.

Another thing to note for this is .. whilst i now have a job increase. i now have only 2 to support and not the original 3 on my IVA so the figures allowed for i.e maxium for food is gonna be different now i have 2 mouths rather then 3

Obviously this is going to make a difference to your allowances and you must make adjustments for this.