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I currently have an IVA. I am paying a total of £542 per month for first two years and then it goes up to £602 for the next three years. This is because a loan that my husband has finishes after the first two years so the extra income gets taken into account. What I need to know is that I have started a new job and I earn more (only by a couple of hundred pounds per month) each month than when I first went into the IVA.

I have been told that half of this amount must be put forward towards the IVA (which I totally understand), the part I do not understand is that at the end of the five years the lump sum that I have to pay back which is £12,000 this extra money going into my IVA does not come off this amount. Can you tell me is this normal.

Hi Pauline

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Hi Pauline
Yes the extra goes towards the iva it does not reduce the amount it just gives the creditors that bit more, unless it would take you over the full amount owed. We do overtime each month and pay sometimes £200 extra on top of the iva payment, this doesnt reduce anything but at least we have the other 200 to make life that little bit easier. Hope that helps.

Ang

Aguise is quite right and this is quite normal.

The whole spirit of an IVA is that you continue to put your best foot forward and pay off as much as you can. I think that you are lucky that your IVA Supervisor has only called for half of the pay increase.

Obviously if you are in a position to repay your creditors in full over the term of the IVA (including IP costs) then the eventual lump sum or the actual term of the IVA may reduce.

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