Once the overall amount of an IVA has been agreed can say an increase in employment income affect the overall amount to pay it off early during the term? i.e. does the total IVA amount change? I cannot find any references anywhere online to what I think is a very basic question. I think I am better off going bankrupt but just want to double check as I understand one should at least consider an IVA but do not want to be constrained by something I read where 50% of your wages or wage increase would automatically have to be paid. This is fine if you are on a high wage but for me it would mean it pointless to work!
In a nutshell - Yes. The ethos behind an IVA is to pay back as much as you can, not, as some advertisers make out, to get as much debt written off as possible.
The payment in an IVA is basically what is left once you take agreed living expenses from your take home pay. If the pay increases, so does the IVA payment, usually by half the increase. Overtime and bonus payments are also due to be paid to the IVA each month on top of the regular payment, usually you are allowed to keep an amount equivalent to 10% of your agreed pay and the rest is split 50/50 with the IVA (We usually refer to this as the '10% 50/50 rule'). Additionally windfalls over £500 are paid in as well. Finally, if you are a homeowner, equity release will be looked at near the end of the IVA.
As long as you have no assets to protect and your job allows it, BR might, indeed, be a better bet. You might get up to three years of payments of a similar level as in an IVA and the initial scrutiny is more intrusive, but the whole thing is more clear cut.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
And the paying half of a wage increase is only until the next review. At the review your payment will be set at income minus agreed expenses. The payment can increase drastically. We went from £200 a month the first year to over £500 p[er month.
