Annual Review After Big Pay Rise

[agowinuk]

Hello

I'm really struggling here. I've just had my 1st annual pay review with Debt Free Direct (formerly Clear Start) - my IVA Supervisor is Richard Savage). It was due in February I think, but there's been a lot of to-ing and fro-ing until I got a phone call today.

Basically I changed jobs last year and I now travel a 100 mile round trip to work everyday. I could handle this all the while I thought that the pay review would result in me paying in 50% of the difference between the old and new wage. However the result is that they want the entire amount, meaning my monthly payments are going from £315 to over £1000. Baring in mind I'm busting a gut just getting to work everyday, I'm now in a position where the only people who benefit are my debtors. This seems very unfair. Don't get me wrong, I'm not trying to sidestep my responsibilities to the IVA, but I'm also not willing to work myself into the ground for no personal gain - I'll leave my job if I have to, I just really don't want to.

Is there anything I can do to get them to re-evaluate this? I'm certain the initial proposal said they were entitled to 50% of the difference (after the 10% allowance), but they are taking the line that it only applied to bonus payments, not basic pay (can I ask my company to re-arrange my pay packet?)

Any help on this would be so gratefully received, I'm really in a bind.

Many Thanks

Andy

[Michael Peoples]

You would need to look at what modifications were in the proposal and what are the terms and conditions as without reading them it is impossible to say if this is correct.

However, most of our proposals will allow a debtor to keep 50% of any increase after allowing for cost of living increases. This is done at the annual review and is not to be confused with the monthly overtime condition. This allows for the debtor to keep the overtime if it increases their net take home pay by up to 10% and anything above 10% is split 50/50 with creditors.

If your proposal does penalise you to the extent you are talking about I would request a variation to allow you to keep 50% of the net increase. Creditors are benefitting from your change in career and it is unfair for you to not see any benefit at all.

[kallis3]

Did you submit a new I&E when you had your annual review? It does seem unfair that they are taking the lot off you when the cost of living has gone up as well.

Have you checked your proposal to see what it says?

I'm not with DFD but both hubby and have been allowed to keep our payrises - not as much as you though!

I would tell them that you want to do a new I&E.

[agowinuk]

That was quick!

I haven't checked the proposal, I tried a while ago, but couldn't find it anywhere. I'll try again tonight, but I've asked DFD to send me a copy of the proposal on my file. Does it need to be specific? Does it need to have the words "any increase in 'basic' wages" to justify taking all the difference?

I have just done the I&E - the amount they are taking is after the minimal (petrol aside) increase in costs.

Michael, can my Supervisor refuse to put forward a variation? I'm with DFD, so it's virtually impossible to speak to him direct and the "customer services" staff dont't appear to be overly willing to help reduce payments.

Many Thanks again for your help, it really makes a difference.

Andy

[kallis3]

You can always email your IP direct.

You can find him via this link:

http://www.insolvency-service.co.uk/newipsearch.htm

It will bypass the office staff.

[Michael Peoples]

I believe that even protocol IVAs have the condition that you are entitled to keep 50% of any increase at the annual review. As Jan says, e-mail the IP directly and request clarification of what type of proposal you have entered into and where it says that you must pay in all the increase. The supervisor can fail an IVA if the client refuses to comply with reasonable requests but I believe that you have grounds for a review of the decision and if the IPs hands are tied by modifications there is no doubt a vatiation is warranted. I see no reason for not calling such a variation as it is in the creditors' best interests.

[johnh]

I'm really surprised by this thread. I took it for granted that, at the annual review, "new" expenditure was subtracted from "new" expenses and the balance handed over to creditors - no question of keeping 50% of salary increases. I'm pretty sure there is nothing in my agreement about keeping any salary increase and I'm surprised that others think it unfair to hand over the lot.

On the other hand I have the greatest sympathy for the poor guy on another thread who has come into an inheritance 2 months before finishing his IVA - I think he is dead unlucky (sorry- inappropriate choice of adjective!). I fully understand that he has to hand it over but I'm sure if I was in that position I would think that the Fickle Fortune of Fate had dealt me another Joker!!!

[agowinuk]

Hi John,

I understand what you are saying on this, and to an extent I agree. The thing is economics still applies. If I put (shed loads) extra effort into my work, I want to see a reward to that. If I don't get a reward, why bother? The normal caveats apply to this, I respect the IVA and want to pay it off etc. (which is why I've got no problem with paying in the 50%), but I won't bust a gut purely for a group of banks who would do everything in their power to sherk their responsibilities if the shoe was on the other foot. I was in the middle of trying to claim over £3000 from NatWest for unfair bank charges (which had had numerous knock-on effects on my finances) when I had to opt for the IVA in the first place. They did nothing but send snide, borderline threatening, leters via their solicitors and I ended up dropping it because they wrote it into the proposal that any bank charges I got refunded would go straight back into the IVA anyway. As I say, caveats aside, they are lucky I didn't just take bankruptcy. I have no assets and I would have been out of it in 2 years, I only chose the IVA because I wanted to be able to say I tried to pay back what I owed.

Sorry, I appear to have gone on a bit of a rant there. I find it hard to contain the contempt I have for some of the banks, and sometimes find it hard to reconcile that with my duty to repay what I owe. But I think 50-50 is fair.

Cheers

Andy

[kallis3]

I think a 50/50 split is a reasonable one as well. The creditors will be getting back more, and you will also enjoy some.

I suppose at the end of the day it's all down to disposable income.

[agowinuk]

Just had my original IVA proposal documents through the post along with the Standing Order Mandate to the increased value of £1029.

In these documents there is a section in the Modifications:

107. Increase in Contributions.
.... Where net income has increased (including any routine overtime) the Debtor shall increase contributions by 50% of the net surplus (after taking into account costs of living) commencing in the month following the review.

Overtime, bonus' and commisions are dealt with seperately in the next section. I'm no legal buff, but I reckon this should sway it my way.

[agowinuk]

I forgot to say, shouldn't the IVA supervisor check on this sort of thing at the review? Or is this sort of thing indicative of the way DFD handle their cases?

[Michael Peoples]

Glad you seem to be covered but it is a pity that your case manager missed the modification. Should be easy to have it sorted but it may be worth e mailing your IP directly before it shows up that you in arrears.

I have done some work in the past with DFD and I am sure this is just a misinterpretation or genuine oversight. Glad though you thought to query it.