www.iva.co.uk

Hi all
I had a call from my IP firm yesterday regading the fact that I was in arrears and how did I intend to make them up. After clearing that matter up I then wanted to clear up the situatuion with them regarding what would happen at the annual review and overtime.
Just to put you in the picture, I currently pay £308 a month and do not have the 50% overtime clause in my IVA so I have not paid over any overtime as the IP firm said before that they will wait until my review to see if I should be paying more which is fine. What I want to know is if my payments increase after the review because of the overtime I want to be sure that I wont be asked to pay extra from year 1. I have no problem with the increase after review but want to be sure that I wont get a nasty bill saying you owe us £XXX because of overtime worked. I couldent seem to get a clear answer from the person yesterday so I thought I would ask you great people.

Your IP cannot ask you to pay over monies retrospectively if you do not have the 50% uplift clause as part of your IVA proposal, but as you are aware if you have consistently earned more money then it is likely that you will be asked to increase your payments into the future.

Hi Melanie
Thanks for your reply. I am more than happy to increase my contributuions if I am earning more money thorugh overtime. I just didnt want to be landed with a bill for £xxx from year one. I am assuming that any increase in year 2 wil be worked out by adding how much extra I have earned - minus my reviewed income and expenditure and if as is likly there is a bit more dispoable income I will have to pay this extra into my contributions?? or will be a case of looking at the amount of overtime and maybe taking 50% of it as increased contribuitons. EG - If I worked say an average of 20 hours a month would it be likely they would take 10 hours as increased contributions?? I would like to add that at the moment we are not living a life of luxury from this overtime it is still be used to pay for things like petrol and energy price increases as well having to ove and the costs involved in that.

Sorry just thought of another question.
If I worked for example 20 hours overtime in a month and because I do not have the 50% clause could the IP take the whole 20 hours?? or as asked earlier is it a case of earnings minus I&E leaving disposable income??

I can only answer if I were your IP - and I would generally apply the 50% uplift rule - ie that your creditors benefit from one half of your improved circumstances, and so therefore do you. I believe that people ought to have some incentive to go out and earn additional monies, but that of course creditors should share in that success.

And at the time of your review, do ensure that you fully update your IP with details of all increased expenditure. Some of my own clients are reporting quite substantial increases in fuel and heating costs - which I am also suffering from in my own family home.

Thanks Melanie
Your comments sound perfectly fair to me and as you say both myself and my creditors benefit from the overtime and I think that by the time my review comes around I will be fully adjusted to the IVA way of life. Thank you for your replies I feel a lot better about things now.

Hi
I always think that this method of dealing with overtime is a dangerous one.If Adams payments are increased and then six months down the line overtime is stopped then he will need to propose a variation meeting.
Surely the 50% instant payment of overtime would be far safer and fairer ? Or can the IP simply reduce the payments back down to the original level without a variation ?
Regards

I feel it far easier to just pay overtime monthly at the 50% rather than raise payments at review. Overtime will vary with most from month to month anyway. We have done it this way for the year and the difference was only £50. As said by Andy overtime can stop at a minutes notice lowering payments can take longer and could cause a struggle for that time.

Ang

I know my situation is different as I'm BR rather than in an IVA, but from my point of view I would much rather pay over 50% of the overtime as it's earned rather than worrying about what might happen at the review.

I did some overtime last year and I asked if I could take it as holiday rather than be paid as I didn't want the hassle of contacting the OR and paying some over. Luckily my boss (who is aware of my situation) agreed! I know it's not in the spirit of paying back as much as I can, but after tax and giving a percentage to the OR there wouldn't have been much left!

Andy

There is no need for a variation meeting, so long as the payments do not drop below the original IVA limit. In this way the IP has ultimate discretion to set future payments and adjust for them if the need arises, which in my experience works very well as my clients have a day to day ability to speak to me and my management if there are changes necessary.

Hi Mel
That's fine,thanks
Debtors that have had increases due to increased wages should therefore be able to have payments reduced upto the level of the original proposal if expenditure increases or income decreases without the need of a variation.
Regards

Absolutely!

Hi All
Thank you for points Melanie & Andy. It is very intersing to know that so long as my payments do not fall below the expected level first proposed then should overtime stop or decrease then at least I know I payments could be reduced by the IP without a varation meeting. As said before if I earn more I am happy to pay more but it is good to know that should my income decrease then so should my payments to the agreed level.