4 months in and a pay rise!!

[aibo1358]

Hi everyone,

I have been up and running with my IVA for 4 months and have recieved notification that I am receiving an annual pay award of 7% (£2162 in real terms) from April 2007. "Great" I hear you all cry, however, my tax code has nose dived again down to K155, also from April 2007.

I have duly notified my IP of both changes, and sent the supporting documents, but was wandering what the outcome may be, as the net benefit to me after the increased Tax & NI will be about £70 per month.

Will I be allowed to keep it all? or is there some fomula for pro-rataing this?

Aibo1358

[MelanieGiles]

Hi aibo

I would expect your IP to increase your payments by £70 per month. Is there any additional expenditure you have incurred during the last four months which you could argue ought to be set off against the increase?

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

[MelanieGiles]

Hi aibo

I would expect your IP to increase your payments by £70 per month. Is there any additional expenditure you have incurred during the last four months which you could argue ought to be set off against the increase?

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

[aibo1358]

Hi Melanie,

Many thanks for the response. I did wander if that may be the case, however, I am slightly disappointed, as I would have thought with the net gain only being £70, that I may have been able to keep part of this, otherwise, whats the point in receiving an annual pay rise.

Apart form a Council Tax hike and a utilities increase, everything is under control, and those 2 increases have themselves only just happened this month.

Oh well... c'est la vie!

Aibo1358

[MelanieGiles]

The point of the IVA, aibo, is that you pay as much back to your creditors as you can afford!

That's the deal you signed on the dotted line to honour, and you should be pleased that they might get paid a bit more as a result of your pay rise.

Do make sure the increased expenditure is taken into account though.

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

[aibo1358]

Thanks again Melanie. I do appreciate the need to pay more, and indeed wish too when the opportunity arises.

It just appears pointless in receiving any increment if the individual cannot "feel" the benefit as well.

I perhaps had not realised that I may end up standing still from the point of my career for the next 56 months.



Aibo1358

[Adam Davies]

Hi Aibo1358
If its any consulation I am in agreement with you on this one.If you got promoted, or a better job ,and more pay then the whole of the extra money would be expected to go into your IVA.
As you say hardly an incentive to better yourself
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[tracy.h]

Surely if you get a pay rise its not a windfall should you not at least keep half,i agree with Andy it doesnt give you the incentive to better yourself.
And with inflation increasing yearly then obviously then so does our wage to support rises in liveing expensis,im not saying that our creditors should not benefit from our good fortune im saying personaly i would be happy to share just not pay it all

[MelanieGiles]

No - payrises are not windfalls. And insolvency practitioners will make allowances for increased expenditure before assessing whether payments should increase.

If you are not prepared for this to happen, then an IVA is possible not the right solution for you. Please bear in mind that an IVA is not necessarily the easy option that is regularly advertised on the TV and in the press. As Andy knows personally, it can be difficult, sacrifices do have to be made, and there has to be a burning commitment to pay creditors as much as you are able. If this comes from payrises, it is difficult to argue any unfairness.

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

[tracy.h]

I am well aware Melanie,what an iva entails,i have had the unfortunate experience of already going through this twice,only to then have the stress of it being failed.
I was just expressing my opinion,as i thought that was what this forum allowed us to do,if i felt that i did not want to pay my creditors as much as i could i would be opting for the bankrupcey courts,sorry if you felt that my post was,thoughtless

[aibo1358]

Thanks for all the comments guys, but please, this is a forum of free speech and expression, so please lets not fall out over my question. I agree with all of the comments, and indeed, as stated previously, have no problem with paying more if able.

I just wander at what point the extra responsibilities and workload that come with the above average pay rises become worth it, and whether future pay increases would be better switched to "perks", as in higher spec car, that elusive course such as a PhD, etc etc....

Something to ponder for the future perhaps.



Aibo1358

[Adam Davies]

Hi
I think that Tracy is correct on this point,the fact that we have opted for IVAs shows a commitment to address our debts.The point that we are making is that once in an IVA there is no incentive to better yourself because you will not see any financial benefit for this.However you can earn overtime and gain 50% of the money so why should this be different for pay risee?
I,m afraid that not many people will take on more responsibility just to pay their creditors more once they have had an IVA agreed.It sounds very commendable but in reality people will just turn down promotion or new jobs until their IVA is completed.
This area of the IVA clauses needs re-visiting.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[aibo1358]

Hi everybody,

Apologies for the late reply, but following my pay increase in April, and speaking to my IP, I am allowed to keep any salary increase, untouched, until my Annual Review. This is in January 2008, and this will then take into account any increase in salary/utility bills.

So everyoine does actually get more in the long run, and I get to feel the benefit of this payrise [:D], and the increased workload [:(].

Aibo1358

[Adam Davies]

Hi
Thanks for the update
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[hara]

TRACEY,
Can you explain how you went through iva twice?
hara