www.iva.co.uk

Hi there,

I have completed my first year in my IVA and I have been asked now to supply last 3 wage slips and bank statements (not my P60 which is strange as its in my proposal that I will be asked for this).

I have received in this past year a 10% salary bonus (2,600 net income after taxes etc). I also had a 10% payrise in January of this year both of which I havent declared as of yet.

My wife was on maternity leave until November (went back to work 2 days a week instead of 3 days a week) In my agreement it was assumed my wife would go back to work for those 3 days and in September. Therefore I absorbed


I havent declared this year my bonus or wage increase (I have saved 50% of the bonus I got but my wage increase has been absorbed into a whole host of things, Playschool costs (one of costs of 350 pounds, increased petrol/insurance due to swapping car in for bigger car due to 2 children now, Food costs, clothing etc).

Looking at my income/expenditure it now seems i have less money than at the time of my proposal even with the 10% increase as we just couldnt get adequate childcare for 3 days a week.

with all this in mind i have a couple of questions

1) Bonus payment

I have re-read today my proposal on bonus's/overtime etc and it reads as follows.

"The Debtor shall report any overtime, bonus, commission or similar to the Supervisor if not included in the original surplus calculation and where the sum exceeds 10% od the Debtor's normal take home pay. Disclosure to the Supervisor will be made withing 14 days of receipt and 50% of the amount (over and above the 10%) shall then be paid to the Supervisor within 14 days of disclosure. Failure to disclose any exceptional overtime, bonus, commission by the Debtor will be considered a breach of the Agreement".

What exactly does this mean?

Does this clause relate to my annual or monthly take home pay? I dont see anything else in my proposal to say either.

Does this mean I take the first 10% of the bonus then split the rest 50/50?

My net salary per month is 2500.

I am also concerned about the fact i didnt disclose my additional take home pay. This year has been horrendous for extra cost etc as i described below so I am a little nervous about that

Any advice of this I would much appreciate.

thanks

zaza

Hi Zaza,

I think (but I'm not sure) that it is 10% of your monthly pay.

You keep the first 10% and pay over 50% of the rest to your IVA.

You should inform them of the extra when you get it, otherwise, as it says, you can be in breach of your IVA.

You need to speak to your IP as soon as possible and tell them about the extra, but also the extra outgoings you have had.

Also to note is that 2 year fixed rate mortgage is coming up in April.

When I took it out it was fixed at 5.79% however I am not sure which way this will go in April (looking to move to another mortgage product with my current lender - no additional lending here).

However i am not sure if this is possible (i last did this when i was in my DMP 2 years ago and had no issues), would i have similar issues.

This again could impact my surplus payment.

Kallis is spot on - you keep the first 10% - ie £260 and share the balance on a 50/50 basis with the creditors - so £1,170 needs to be paid over - and should have been within 14 days of receipt although I suspect that your IP will turn a blind eye to this.

With regard to your salary increase, as this has been absorbed in additional costs, it is unlikely to result in an increase in your payments, so long as the cost increases are reasonable.

Hopefully, with the recent reduction in interest rates, your mortgage payments should actually reduce - but it might be worth to check out your current lenders SVR at present to get some idea of what your future payment might be.

thanks Melanie

However my payrise was back in January the month after my wife went on maternity leave, how does work with regard to back dating expenses?

Yes there have been increases across the board (no more than 15% increase) and some "one off" charges..

I will pay the 1170 out right away (sitting in savings account).

You will need to provide retrospective evidence of the additional expenditure at the time of your annual review. This is why it is a really good idea to retain details of all outgoings so that you can show your IP where your money has been spent.

I have just checked our my Lenders SVR and it actually might mean we save around £50 a pound month.

With this in mind I assume it all gos to my IVA comp?

Also with regard to that clause in my agreement I have had smaller bonus's over the last year. All these figures are before taxes, NI etc.

1) £323
2) £329
3) £505

Therefore I am entitled to keep them all (maybe £50 off the last one) as my net salary is around 2500.

thanks

zaza

If your mortgage payments are lower, then you can expect your IVA payments to increase unless you have additional expenditure from another cost area which would counter this.

Melanie,

with the 10% and 50-50 comment above regarding my 2600 pound bonus how does that affect the following bonus's received this year.

1) £190
2) £191
3) £298

these are all net figures after tax, NI etc.

You apply the 10% threshold in each individual month, and then pay over 50% of the difference to your Supervisor within 14 days of receipt - assuming that your IVA is a protocol compliant one of course.

Always best to check these things out properly with your own IP as the advice we can give on the forum is very limited.

Melanie is right and spot on - you must seek the advice from your own IP - if his/her advice is materially different to what has been indicated here then let us know. Good luck.

hi

I notice this thread is quite old but very important to my circumstances.

My debts are approx. £32k incurred through failed off-plan investments and I am planning to enter an IVA as soon as im back in work. Ive still got two properties which have no or negative equity and im actually renting at this time.

I'm close to getting back into work in a new career as a recruitment consultant. My concern is the amount I will have to pay back should this role take off and I bring home a lot of bonus. How negotiable are the terms in relation to bonus/commission? Could my practitioners attempt to propose a 30% ceiling for example an then 40% of the remainder going to my creditors?

On approx. a £30k basic i'm guesstimating a monthly IVA payment of approx £250 (£3000 a year). This equates to £15,000 over 5 years with appox. 50% of the debt being written off. If I earn an extra £10k a year in bonus im now wondering if this pays the £15k off quicker or I end up paying pretty much all the £32k back?? i.e. the more I earn the more is paid back? If this is the case I cant see the advantage of entering the IVA all though I do accept interest will be frozen.

On another note my grandma has offered to give me some funds to help me get out of this situation (approx £7k) so what I was hoping to do is to make a full an final offer after approx 2 years. is this feasible? or have I got it all wrong.

I haven't decided on an IVA practitioner as yet so any help is much appreciated.

robbiex