www.iva.co.uk

Hi,

I have accepted a job that will pay approx £27,000.

I have been in an IVA for a month now and made one payment. My monthly payment is £264 based on my old salary of £15,250.

What i'd like to know is:

1. How much are my payments likely to increase by? (not actual figures, but will it likely be double due to my salary being doubled?)
2. When my payments increase will I pay the IVA regardless for the whole 5 years?
3. If so, could I end up paying more than I actually owe?
4. If that is the case, can I ask to just continue to make the 'normal' payments that I paid before I entered the IVA?
5. Would it be worth going bankrupt?

Sorry for the endless questions, I handed my notice in at work today and got called 'stupid' for possibly ruining my 'cheaper IVA'...

Feeling under-pressure from family and friends who don't understand the whole process - all they see is "as you earn more money so you'll be out of debt earlier won't you?"

Any responses would be really appreciated,

Thank you very much!

If your income and expenditure was worked out on your previous salary and that obviously left you with enough for each month i would imagine that the additonal salary would just be paid into the IVA monthly. I could be wrong.

im sure an epert would advise

Hey derbysaint, congrats on the new job. You may have the opportunity to pay off your debts in full and much quicker. Is your expenditure going to increase at all?

Thanks very much!

No, my expenditure won't change and that's what i'm a bit concerned about... Is it plausable that my payments could actually by (approx) £700 or so?!

If that would be the case then I would be better off paying my creditors directly as I was beforehand!

Thanks.

I assume you didnt expect to get this new job when you put in for your iva. Any additional income will go into your iva,unless you have extra costs of living,which I wouldnt expect 1 month in.
YOu may be better off allowing your iva to fail and entering into a dmp,depending on your original debt.

How much was your original debt DerbySaint, before your IVA?

My debt is approx £30k.

I'm due to pay back about £16k.

I would first of all contact your Supervisor and ask that an Income & Expenditure review be carried out following a change in your circumstances.

Is the job in the same area as your current employer? Are there no additional travel / fuel expenses likely to be incurred in taking the new job?

I would also check the terms of the proposal ... specifically

What does it say about repayment to your creditors. I assume currently it will say XXp in the £ after five years. Are there any terms in there regarding the maximum return to your creditors? More often than not it is 100p in the £, but there may be instances were the proposal or modifications word it that the maximum you would repay to creditors is 100p in the £ plus Statutory Interest, which I believe currently runs at 8% per annum. There should be some clarity in the proposal on the extent you are to repay creditors

Check what it says there.

It may well be that by increasing the level of your contributions you are able to conclude your arrangement sooner, depending on the maximium amount you are required to repay.

When you say you would be better off going back to the old way as you were able to meet repayments - does that mean you were meeting just the minimum repayments or were you paying the full amount off each month? If you were paying the minimum amount off each month, was the amount you actually owe going down or was interest accruing at a higher rate than minimum payments? If it was decreasing the amount you owe, then you're never going to be better off unless you can make a substantial dent in the liabilities, but I don't know how you would do that save snowballing the debt.

At the moment you have the comfort of knowing that interest and charges are no longer accruing on your liabilities. If you exit the IVA by way of default, you will lose that comfort as the interest and charges would start to accrue again and they would be back dated to the date on which they were frozen. Admittedly in your case it is only one or two months ago, but you will notice because of the penal rates of interest applied.

If you were to go bankrupt, you may still have to make income payments to a Trustee in bankruptcy. These will probably, but by no means guaranteed, be lower than the payments currently being paid in to the IVA. Your 6 year credit blip on your record will also start over on ther making of a bankruptcy order.

Bankruptcy may affect your employment if employed in certain sectors and certainly if in the financial services industry.

There are many things to consider and I am sure that someone will probably add to the list I have given.

congrats derbysaint on new job...thats a whacking great pay difference...wow....hope you can make the right decision for you

welcome to forum

Congra' on your new job....but this is one of those IVA cases where your creditors are smiling.A DMP is another option now as it wouldn't take forever and may suit you better - MBNA and other Banks have said they wouldn't wreck peoples' credit files as DMP payments will go down as 'satifactory'.One of their incentives to box people in DMPs....

You have a 55% increase in pay, and I think you will have to do a new I/E sheet.You can't just start doubling everything on it to keep the extra money. As this isn't a bonus or commission where you may keep 50%,or the first 10% and give remaining half to creditors(mods) you may have to hand over all of your extra money. I woud hate to see all that going to creditors...

An IP is Insolvency trained so you may want an independent debt adviser to decide...a predicament indeed.

i dont see how a DMP would be better now as you cant be certain interest would be frozen and could take even longer to pay.Have a good chat with your ip your expenses must go up in someway?.if you are saying the initial debt was 30k then you will have paid it off + interest much sooner than the 60 months set and this in turn will cut ip fees also.the only other way if possible would be to offer a full and final to finish early with a lump sum but you have only been running for 1 month.Who is you IVA with?

Thank you for your replies.

My IVA is with Varden Nuttall (who have been very good). My worst fear would be to get this extra money then have to put it all back into the IVA and end up paying more money back than I actually owe!!

Also, I got told today that I would be paid weekly - does that make a difference?

Once you pay back the original debt plus IP fees and interest, your IVA will conclude. You will be able to pay it off much sooner with your new pay. Just think, you'll be completely debt free quicker and then you'll have lots of wages for yourself! X

Thanks Viki.W, I was under the impression that the IVA would run for 5 years regardless?

Not at all, once the £30k plus fees and interest are paid, then that's it. Good luck with your new job. [:)]X