IVA with payrise means paying back more than i owe

[chimp]

I am currently still waiting for GT to draft my proposal for an IVA, which as i have previously stsed has been going on Since November (my creditors are really losing patience now) however i have 2 options according to GT..

Debt is 55K
Salary (take home) 1564
£500 to current wife to pay for childcare and bills
£338 to ex wife for child maintenance

Use my sole income - prefered offer although GT not confident
They are looking at approx £509

or using both my wifes and my income - don't really want this option
approx - £800

based on 60x£509 payments - £30540 - (think this works out to be about 56p in £)
based on 60x£800 payments - £48000 - (think this works out to be about 87p in £)

I have read though that if i get a payrise with i am to pay all of this to the IVA.

I am expecting a £500 a month payrise soon...all being well.

however this would then mean i would be paying

£1009 and £1300 respectively.

However this would then mean i would be paying back...

60 x 1009 = £60540
60 x 1300 = £78000

this is both much larger than what i currently owe...

How will this work?

[ianmillington]

If you know the payments you will be able to make in the 5 year term will exceed the debts then that does point towards a DMP rather than an IVA. Whether that is the right course, however, depends on whether you can guarantee an interest freeze on all your creditors which if there are a few is unlikely.

The idea that you pay all of any pay increase into an IVA is from the dark ages. I can't see GT putting that provision into one of their proposals. The current industry standard is 50% of the increase in net income (with special provisions for overtime).

I would suggest you get them to expedite your proposal as it seems to be taking a long time. Is there a reason for the delay?

Ian

[chimp]

to be honest i am getting as boed as my creditors on this...i have no idea why it is taking so long.

[ianmillington]

Have you asked them? If not, I suggest you do. It shouldn't take this long, unless there's a road-block, in which case they should have told you.

Have you been paying any contributions whilst the proposal has been worked on?

[chimp]

no i have not to be honest as i have had a lot of other debt i have cleared up in the mean time... Friends etc..

I am clear now so want to start contributing to something ASAP.

[MelanieGiles]

The thing to bear in mind when instructing GT to act for you is that they also act for a number of the main lenders when it comes to voting at creditors meetings. So they tend to know exactly what will be accepted or not, indeed they probably vote on their own proposals.

I share their lack of confidence in putting the offer forward without your wife's contributions, as the majority of lenders will see her as being partly responsible for the debts and therefore needing to contribute. If you are not happy with this idea, you might be better off looking at a DMP or even bankrutpcy proceedings.

Are you property owners?

[chimp]

the debt is in my name solely, however the property is solely in my wifes name..

really confused as what is best to do now

[MelanieGiles]

Do you have any interest in your wife's property? And how are GT treating the property in the IVA proposal. How long have you and your wife been married for?