My partner and I have an IVA which started 6 months ago. Our debts are £40, 000. My partner works for the local authority. They have spent the past 2 years carrying out a review of all jobs and pay scales for all its employees. My partner has been written to this week to inform him that for the entire duration of his employment he has been an incorrect pay scale. They have offered him both compensation, with interest, plus backdated pay for 5 years. The exact sum hasn't yet been announced but will be between £18, 000 and £26, 000. Where do we stand with this? This money is in effect wages that he should have earned over 5 years, the lack of which worsened our financial situation. Are we allowed to keep any money?
Nicola - welcome to the forum, speak to your own IVA/IP directly to get a definate, correct answer. personally i hope at least you will be able to keep at least a little of it.
I think our logic follows different paths! I would have thought lack of wages worsened your financial situation which led to debt. So the introduction of wages improves your financial situation by repaying the debt.
Thanks for all your replies. Yes, you're right that being on a higher pay scale will improve our situation. My original post was referring to the fact that we struggled each month to cover our debt payments, and had my partner been paid correctly over 5 years it is possible that we might not have had to go down the IVA route.
Does anyone know if we can keep a percentage of the money he will get, or if not, if our IVA can end earlier than the 5 years? The figure has now been confirmed as £3000 compensation plus £22, 500 in backdated pay. If they take this plus the repayments over the next 4 and a half years then we will end up paying more than originally stated.
Full and final settlement - your IVA proposal will state about windfalls - so really for accurate information you need to check it directly with your IP/IVA company
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by nicola1982
Does anyone know if we can keep a percentage of the money he will get, or if not, if our IVA can end earlier than the 5 years? The figure has now been confirmed as £3000 compensation plus £22, 500 in backdated pay. If they take this plus the repayments over the next 4 and a half years then we will end up paying more than originally stated.
It may get classed as a windfall as others have said and captured by your IVA, BUT, you will only ever pay back a maximum 100% of your debt plus fees. So if this is captured and you continue to make payments, if you reach 100% of the amount of your debt plus fees before 5 years then your IVA will complete early and you will not continue to pay for any remaining years/months up to 5 years.
Last edited by morgan105 on Mon Apr 02, 2012 12:31 pm, edited 1 time in total.
I personally don't agree with the windfall argument, and would probably treat this under the 10%/50/50 ruling if it were my client given that it relates to wages - but both arguments could probably be run to be frank.
How appalling that he can be owed such a large sum of money for the last two years - it beggars belief about our civil service to be honest - and you must be so angry that this has contributed to your financial difficulties.
We today found out that we will be able to keep half the money, which is a great result for us. This is far more than we anticpated but we feel quite justified after 5 years of underpayment.
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by MelanieGiles
I personally don't agree with the windfall argument, and would probably treat this under the 10%/50/50 ruling if it were my client given that it relates to wages - but both arguments could probably be run to be frank.
How appalling that he can be owed such a large sum of money for the last two years - it beggars belief about our civil service to be honest - and you must be so angry that this has contributed to your financial difficulties.
Hi melanie,
Just a quick one I have seen this 10%50/50 mentioned before but what is it??
Also the money in this case is unpaid backdated wages and not classed as a windfall but a PPI reclaim - which is wages earned and tax / NI paid on is an asset and 100% of which has to be paid into the IVA, why are the 2 not classed as the same as both are wages so both should be assets....
