Annual Pay Rises and monthly IVA payments

[Mr Loadsofbills]

This question is aimed at those people who are experts or have been in an IVA for at least 12 months.

When you are in an IVA and you receive an annual pay increase.
What percentage of that pay increase goes towards your IVA?

More bills than pence.

[iva_squirrel]

Good evening,

Once the IVA is approved, the Insolvency Practitioner (IP) will take on the role of Supervisor for the five year period. This will mostly involve ensuring that the monies are handled correctly and that the appropriate payments (or dividends) are made to the creditors.

For some people their financial circumstances may significantly improve during the five year period of an IVA. Most IVAs will include standard terms to deal with windfalls, bonuses and pay rises.

As a guideline the creditors will require that 50% of these that occur during the period must be contributed to the IVA. The exception to this is if the amount is sufficient to propose a full and final settlement, and hence terminate the IVA early.

Kind regards,


Julia


For more information about IVAs, please visit my website:
www.supersonicsquirrel.net

[MelanieGiles]

I look at the client's overall financial position when I am doing my reviews. I would look at your current income, deduct your current expenditure, and then seek an uplift in payments of whatever is left. Substantial increases in expenditure will need to be justified by bills and invoices, so make sure you keep detailed records during the year.

Your own proposal (as modified by creditors) may provide for a differing calculation, so dig the documents out and have a read through them and confirm with your IP if you are not sure.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Skippy]

Just a thought, but if I get a pay rise it will be in April and my review is due in October.

Will I have to pay all of the extra money into my IVA until October?

Then, in October can I offset some of the pay rise against rises in my cost of living (petrol, fuel etc)? If so, won't my supervisor wonder how I have coped in the previous months?

My company only give 3%-4% pay rises, so we're not talking megabucks!

Sorry to keep asking questions!



Three down, fifty seven to go until freedom!

[MelanieGiles]

It depends on what your IP says, Skippy. If it were me I would leave it until October and review then. The trouble with this is that we would spend all of our time reviewing wage-slips and no time actually presenting proposals and paying creditors.

I always take a common sense approach in these things, and hence maintain a good relationship with my clients. An unhappy client is more likely to throw the towel in early, and that is not what creditors want.

Don't be sorry about asking questions - that is exactly what we want our members to do. Thank you for all of your support so far, and ask away!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.
View my IVA blog at: http://melaniegiles.blogs.iva.co.uk