£2000 annual bonus - FAO David Mond

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herbekj

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Post by herbekj » Thu May 20, 2010 10:29 pm
It's unfair because based on exactly the agreement stated above you would pay a different amount if you were payed a monthly bonus rather than an annual which may be outside of your control.

The agreement needs to have a proviso that covers the bonus payment perid and earnings in that period to ensure the correct extra payment into the iva is valid.

If you get a bonus every 3 months for example,the 10% should not be calculated from the monthly wage but the monthly wage * 3

Anything other is blatantly wrong and my previous posts did not take this scenario into account as it assumed you were on a constant bonus and not on a yearly one which should not be then be calculated against a single months earnings.
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Adam Davies

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Post by Adam Davies » Thu May 20, 2010 11:19 pm
Hi
A bonus is usually split 50/50 regardless of how often it is paid. The 10% clause relates to the month that it is paid. It is unrealistic to expect creditors to allow you to keep more than half plus 10% of your net monthly pay
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size5

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Post by size5 » Fri May 21, 2010 8:54 am
Hi Omar,

I cannot identify you from your forum name, but if you want to drop me a quick e mail (my details are in the experts section on the left) then I will hopefully be able to put your mind at rest as soon as possible.

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kallis3

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Post by kallis3 » Fri May 21, 2010 10:07 am
I agree with Andy - the idea of an IVA is to pay back as much as possible to your creditors. If you have to pay 50% back from a bonus, your creditors get half and so do you.

I think that is fair.
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Daveyboi

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Post by Daveyboi » Fri May 21, 2010 2:06 pm
I disagree because what they are saying is if they earnt the bonus in small amounts throughout the year not going over the 10% in that month they get to keep it all however by getting it paid in one lump sum at the end of the year you have to pay a hefty whack of it into the IVA. Therefore penalising you because you get the bonus in a lump sum and not monthly.

We're in IVA's because we want to pay back as much as we can yes but if they can allow people to keep the money in the first example then they should in the second example too.
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Michael Peoples

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Post by Michael Peoples » Fri May 21, 2010 3:02 pm
But Dave if you are paid a monthly bonus it would effectively part of your wages and used for income and expenditure calculation. Bonuses should never be guaranteed and I see no reason why an employer could pay a monthly bonus without knowing the company's financial position at the year end.

Commissions and overtime are paid monthly and dealt with under the 10% and 50/50 conditions as are smaller bonuses. Creditors used to ask for 75% of all additional income and I think the current system is fair all round. If someone receives a large bonus because their company had a good year it is only fair to share that with creditors. They could have requested bonuses be treated as windfalls and grabbed the lot but that is not the case.
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Daveyboi

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Post by Daveyboi » Fri May 21, 2010 3:07 pm
A Monthly commission or bonus of £150 would not form part of your income and expenditure precisely because it's not guaranteed income. It would fall under the 10% and 50/50 ruling. If someone earns £150 commission roughly a month they keep it under the wording above. Getting it in a lump sump at the end of the day they lose 45% of it. Big difference to someones pocket.
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Skippy

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Post by Skippy » Fri May 21, 2010 3:08 pm
I completely agree Michael.

Another way of looking at it is that if you weren't in an IVA any bonus would most likely have to be used on debt repayments anyway.
 
 

Michael Peoples

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Post by Michael Peoples » Fri May 21, 2010 3:19 pm
I agree Dave it may seem unfair. However, a client has the option of asking their employer to pay the bonus in twelve equal instalments over the next year which would avoid them having to share with creditors.

It might be hard explaining to your employer though why you do not want all your money in one go.
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Daveyboi

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Post by Daveyboi » Fri May 21, 2010 3:24 pm
Yes that would definitely be an awkward conversation to be had. I am sorry sir I have a phobia of large payments can you please spread it out throughout the year for medical reasons ta muchly

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Adam Davies

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Post by Adam Davies » Fri May 21, 2010 3:58 pm
Hi
I think someone paid a large bonus would recoupe some of the extra tax paid over the next month or two unless the bonus was paid in March ?
This would give them a little bit more of the bonus payment.
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kallis3

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Post by kallis3 » Fri May 21, 2010 4:31 pm
You should be aware that any bonuses, regardless of how they are paid, will be subject to you paying across to your IVA.

You do at least get to keep some of this money.
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Daveyboi

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Post by Daveyboi » Fri May 21, 2010 5:06 pm
Kallis how is that true for someone with the 10% clause? They get to keep up to 110% of their monthly declared net income. Therefore not paying anything accross to the IVA.
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kallis3

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Post by kallis3 » Fri May 21, 2010 6:03 pm
Any bonuses should be subject to the 100% plus 50/50 rule, dependent upon what it says in your proposal.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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Daveyboi

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Post by Daveyboi » Fri May 21, 2010 6:09 pm
Have you read the wording of the proposal we are discussing I posted it above and clearly shows first 10% is exempt monthly.
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