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I have been in debt for a number of years but have always kept on top of payments etc. I stupidly got a secured loan to pay of debt then fell pregnant and in order to pay bills got more unsecured loans and kept getting them to try and pay things off. The industry I work in is suffering at the moment we haven't had a pay rise in 3 years. My husband lost his job just before christmas. He has another but is bringing home half of what he use to and now we are struggling.

I was wondering would an IVA be accepted intially on a lower payment basis and then reviewed each year. My industry is set to turn end of this year and therefore early next year we will be getting bonuses and pay rises and I would fully intend to use these to pay into the IVA.

Hi csmerenda

An IVA can be structured in a variety of differing ways, so in principle your suggestion would work. The problem is, however, that there does not appear to be any certainty about your increased earnings at the end of this forthcoming year.

An insolvency practitioner and your creditors would be very nervous about accepting an IVA on such unconfirmed terms. How much is your disposable income now, and how much are your debts in total? It may be possible that you can do an IVA now, without worrying about having to increase payments at a later stage?

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

Hi Csmerenda and Welcome to the forum!

It is possible to start an IVA slowly by paying a lesser amount in the first 12-24 months, and then making that up by paying as much as possible for the rest of the IVA term.

However I agree with Melanie Giles, it is concerning that the increase in your wages is not verified as yet.

The amount you can afford to pay back to your creditors per month is called disposable income.

It is calculated as follows:

Your monthly income -
Your monthly general living expenses (i.e.: rent, bills etc)
=
Your monthly disposable income.

I advise that you sit down and calculate your disposable income, at least then you will know how much you can offer.


Hope this information is of use

Regards. IVA Experts