Is there any way to go back.

[Howarth1983]

Hi all, im coming up to the end of my first year in an IVA. I started off with a low income but the payments that were arranged at the time helped loads. Since then I have changed jobs and had a substatial pay rise. I have been putting away the 50% extra they will ask for at my review so im not too worried about that.
I feel now though, If I had just held on a year ago and not entered into my IVA I could now afford to manage my debts now. Is there any way I could go back to paying my debts face to face with my creditors. I am just afraid that the IVA is making me worse of now than if I had stayed with my creditors.
I was stupid, young and idiotic when I ran up all my debt and I know that doest change anything.But now that Ive grown up I feel the IVA is going to bleed me dry when I could easily manage without it. If it is possible I would expect everything to be back dated over the last year but I would be able to manage it now. Can this happen or is going bankrupt the only door out of an IVA.

Any help please???

[Adam Davies]

Hi
If you stopped paying into your IVA it will fail and you will be back to square one.You can then make arrangements with your creditors to repay your debts but they will almost certainly add interest on a monthly basis.There is also a small chance that they will petition for your bankruptcy.
Why don't you stick with the IVA ?,even if you return 100p dividend it is no more than you would have to pay back if you hadn't enetered into the IVA.The IP fees that are paid in an IVA will probably be less than the interest that you would have paid outside an IVA.
Just be aware that in most IVAs the whole payrise is due to be paid into an IVA,less any increased expenses,not just 50%,however yours may read differently and it could be that any increased payment will only start after the review and will not be backdated.
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[OPTIMIST12]

Without wishing to hijack Howarth 1983s post - (sorry Howarth) - can I just reiterate Andy's point about pay rise increases. My understanding is that the 50% clause relates - generally - to Overtime and Bonuses. My understanding is also that - in an IVA - 100% of a persons disposable income AFTER deduction of agreed expenditure- should be paid in to the Arrangement to the benefit of Creditors. Certainly - in my case - all my recent Payrise (minus an inflation percentage increase added to - and calculated on - my agreed monthly expenditure)was added on to my monthly payment.

I had no problem with this as - in my case - I have had had no real changes beyond normal price increases in the shops. However - my regular Overtime provides me with a regular "safety net" - so to speak - and I am lucky in that respect.

Without wishing to sound like a complete party pooper - what is the justification for keeping 50% of a Payrise if there has not been a corresponding increase in expenditure? I know from reading many posts on the forum that this seems to happen quite often. Does this not go against the ethos of an IVA? Or am I just a miserable so and so because I did not get to keep 50% of mine??? I don't know. Probably if I did not have regular Overtime I would think differently - I don't know.

And may I just say again to Howarth 1983 - sorry to jump in with a moan!!! - I hope 100% that you find the right way forward for your case. And well done for keeping 50% of your Pay Rise. I know if I was told I could keep 50% of any Pay uplift then of course I would!!!! Its just that your post gave me the opportunity to raise a wider point. Thank You!!!!!

And what a very interesting question you have raised if I may say so.

[MelanieGiles]

Aah the benefit of hindsight - if only we had this most of us would be in different positions than we are now.

You and your creditors have agreed a contract between you to repay your debts, in good faith and at a time when you needed their co-operation. You are very lucky that your circumstances have changed during the last year, but a contract is a contract, and you would be very unwise to break that.

How on earth can the IVA bleed you dry, when you are being allowed to retain 50% of your uplifted salary? My advice is to pay over all of it to your IP and try and get the IVA finalised at an earlier date. I have had many clients in your position over the last few years, and not one has asked to be released from their arrangement, they have simply been happy to pay their debts in full interest free and have worked hard to get the arrangement concluded as quickly as possible. The IP fees you will pay into the future, will probably be less than the interest which will be charged, and the IVA will remain on your record for six years from its inception in any case.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[welshman]

OPTIMIST12

The justification in keeping 50% of your payrise is that you feel you are not just trudging through your job year by year without reward. Just imagine if you were on the same wage for the next five years. You wouldn't have any motivation whatsoever, your morale (which is probably low already) would be even lower.

[Skippy]

I can see both sides of the argument about keeping 50% of a payrise. I appreciate that the idea of an IVA is to pay back as much as possible to your creditors and rightly so, but 5 years is a long time with no incentives, especially with people being asked for enormous increases from the creditors, or having their expenditure changed to 'fit' the IVA - not everyone is fortunate enough to have an IP like Melanie who puts forward realistic and achievable proposals! Maybe if people were allowed to keep some (not necessarily 50%) of their pay rise then more IVAs would be seen through to the end.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[OPTIMIST12]

My heart agres with Welshman - it WOULD be nice to get to keep 50% of my pay increases to put towards a weekend away or a few extra bits and pieces - but my head says that I went into this arrangement on the understanding that I am going to pay back as much as is reasonably possible and bearing in mind the VAST sums that are - potentially - going to be written off from my debts - I think I will go with my head.

Obviously I hope that my I.P. will take a sympathetic view at the Annual Review if I have had unavoidable increases in expenditure but I do not really feel that I am being hard done by if I otherwise just get to keep an inflationary increase. To be honest I was quite surprised when I found out that some / many people get to keep 50% of their basic pay rise.

I agree with Skippy - it would be nice to keep an agreed percentage of a Pay Rise as an incentive - but - given the choice between my basically "static" income for 5 years - and what went before my IVA - I will stick with the IVA 100%!!!

[welshman]

Melanie, I was told that no matter what you put extra into the IVA the term would still be set at 5 years? So what would be the point of putting the extra in if you don't have to if it doesn't decrease the term of the IVA? Perhaps you can clarify?

[MelanieGiles]

I am assuming that the posters circumstances have changed so that he can afford to pay all of his debts in full, in which case the IVA ends as soon as the last payment is made. This is only an assumption, however, due to the fact that he says that he would be in a position to carry on paying the creditors directly.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[kah]

What about pay rises that just meet iflation costs? My IVA states I can keep the first £50 of any additional money I receive and then half of anything else gors ito the IVA.

[MelanieGiles]

There are many different derivatives of the uplift provision, yours just being one example. If that is what your proposal states, then this forms part of your contract with creditors, and it seems a sensible provision to me.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[OPTIMIST12]

hi welshman -

Sorry if I have misunderstood your last post but surely the point of paying more money into an IVA - if there is extra money available - is simply to repay more of what the debtor owes to their creditors? Yes - in most cases it will not shorten the payment term but surely it is "doing the right thing". I have paid in significant extra amounts each month - thanks to overtime and bonuses - and pay increase!!! - and feel good for doing so. I would like to think that by so doing that - if I do hit a rocky patch later on - this may go to show my Creditors and IVA Company that I have done my best and that they may be more amenable if I have to ask to miss one months payment or something similar. Or am I just being naive?

[MelanieGiles]

Not naive Optimist - merely honouring your commitments to those creditors who chose to help you when you needed them. If there were only more debtors out there like you, perhaps creditors would begin to refind their confidence in this very credible repayment procedure.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
This is always a good debate.....payrises
Should the whole rise go into your IVA or a proportion ?
My personal view is that a proportion of a payrise should go into the IVA,this gives incentive to better oneself and look for pomotion or a higher paid job.This way debtor and creditor benefit.
If the whole of the payrise was to be paid into an IVA then many people would choose to stay put,thus denying the creditor extra money.
I accept Optimists view that we should be happy to pay back as much as we can and is a view that many will share,however the reality of handing over all you extra money,hard earned,month after month ,year after year will depress even the most disciplined.Whilst it sounds and feels good on "paper" to pay everything over,the reality of doing this is totally different.
Why allow 50/50 on overtime ? because reality is that most people will not work overtime if all the money goes into the IVA
Why allow 50/50 on bonus's ? because reality is that most people will not push themselves to earn one if all the money goes into an IVA
Why should payrises be any different ?

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Skipper]

Optimist, by keeping 50% of what your earn there is a win win situation for both creditors and debtors.

I don't mean to sound corny but the cost of living is going up and up and up,if your expenditure haven't increased - I really like to know where you shop and what you buy to sustain yourself/travel and who your Gas and Ultilty suppliers are? Even an inflationary payrise of 2.45% increase doesn't cover those increases.

If your creditors allow you keep 50% you would change your sentiments.Yeah, it is unfair some gets to keep 50% and others 0.

"Always think outside the box"