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i've been in an iva for 16 months and so far all is well.i have an ok salary so my monthly contributions are a little steep(but affordable,and a lot cheaper than servicing the original debt).payments have been met every month,and following an increase in salary 50% of cleared funds was added to the monthly payments.what i find frustrating,and would like clarity on,is the fact that my IP won't take into consideration increased monthly costs from my original proposal.i've just had a salary increase and want to add for inflation my monthly outgoings before adjusting my monthly contribution but am being told that it isn't possible.up until now i've had no problem with my IP.Am i being sceptical to question why my contributions have to be adjusted but not take into consideration inflation on living costs.

hi

this should not be the case, if the cost of living has gone as it always does, faster than your wage this should be taken into consideration.

you need to speak to you ip or one of the experts on the forum for further help.

l morris

Hi there and welcome to the forum

I do not agree with your IP's stance here. They should be reviewing your overall salary at the end of each year, and using that new figure as the basis for future 50% uplift payments. An IP who does not take account of a debtor's increased expenditure, is setting themselves up for a disgruntled client, struggling and missed payments and potential failure. That is certainly not acting in the best interests of creditors.

Be more firm in putting your point across. Can I ask who your IP is and which firm?

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

Yes you must press your IP on this point.
What if your pay rise was all eaten up by increased travelling costs,how would they expect you to contribute the extra ??

thanks all for your replies.this was the feedback i had from my IP after raising the initial question.

The strict wording of the modification was 50% of your additional income above that stated in the proposal. You get to keep the remaining 50%, the idea being that this will cover the inflationary increases in your expenditure.

is this correct?bottom line i do want to comply with the IVA,and failure of the process and to go bankrupt for me isn't an option.is it worth really kicking up a stink with my IP,for what is a matter of maybe £30/40 a month?

Yes that is correct - your 50% must be absorbed to meet increased expenditure first - but as I said there should be an annual adjustment of your base-line salary each year to take into account pay rises.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

If you only got a 3% payrise then ,under your proposal ,with inflation running at approx 3% you would only have a 1.5% increase and therefor you would be worse off.
There must be an inflation increase on your costs before the payrise is taken into account.This way both you and your creditors would be equally well off due to your payrise.