www.iva.co.uk

Hi,

One of the reasons my husband and I now need the iva is that all bonus's and overtime at our work was ceased. We have been living of credit cards and our savings which are all now gone. but I just wanted to know what would happen if they do re-instate the comany bonus's. Not that mine is much and they are pretty unacheivable when they are in place! Mine used to be paid quartly and my husbands in one annual lump sum!
I thought i read somewhere that you have to surrender 50% of it. Is that right and would that be 50% of what you actually get after the tax man has his share!

Thank you

It is normally the case that you can keep bonuses and overtime that do not increase your normal take home pay by more than 10%. Anything over that is split 50/50 with your creditors. It is the net figure after tax so there is a good benefit for you and an incentive to earn more.

For example, if your normal take home pay is £1,000 and yopu receive a bonus of £500 after tax, you keep the first £100 and divide that remainder with your creditors. If your normal take home is £2000 you keep the first £200 and divide the rest. Hope this makes sense.

If you do propose an IVA make sure that the proposal is based on your guaranteed basic income as overtime and bonuses cannot be replied upon. Creditors and yourselves can then benefit as and when you receive extra income.

It sounds as if you are in the right place now to address your debts, and if you have to hand over 50% of your additional earnings, at least you can keep the remainder and spend it on yourselves without having it swallowed up with debt repayments.