Commission based income and IVA’s

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mwall

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Post by mwall » Thu Aug 20, 2020 3:50 pm
Hi, I am asking on behalf of someone else. They have an IVA for a ~£10k debt that they have been paying into for some time (perhaps about 3 years). I am unsure of all of the details (e.g. exactly when it was started, how long it was for) but can aim to update once I have them. They work a job where a lot of their wage comes from commission they have earned. This means their take home pay fluctuates, sometimes quite dramatically, from month to month. As far as I know, they have been paying the same amount each month towards their IVA. They recently received a large bonus (££,£££) at work from a new scheme the company is running. This has obviously made their average monthly take-home pay on the annual report look a lot larger than it is. The IVA company has informed them that their payments will increase from something of the order £150 a month to £600 a month. This is essentially impossible for them to pay. After looking into IVAs myself I can see that if you get a bonus above 10% of your income (which in this case can only be estimated each year due to commission-based pay, but the bonus is so large that it will be above the 10% threshold) then you must pay 50% of anything over that threshold. A payment of money from the bonus could be made to the IVA company, but would that still mean the monthly payments will increase? Does anyone have any experience of having an IVA while working a commission-based job (where the basic hourly rate is significantly lower than the living wage)? Could we ask for a reduction in monthly payments? Can a family member or friend gift the money to this person to allow them to pay a lump sum (or potentially pay off completely) the rest of the IVA? Any other options? Any advice is appreciated. Thanks all.

Foggy

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Post by Foggy » Thu Aug 20, 2020 5:04 pm
I imagine that the IVA provider has looked at past base income and commission and averaged this out to arrive at the new IVA payment .... the bonus should be treated seperately as a one off in the month it was paid.

Your friend's first port of call should be to get the provider to explain, preferably in writing, exactly how they have arrived at their figures, before you can challenge the calculation.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
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mwall

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Post by mwall » Thu Aug 20, 2020 5:10 pm
Thu Aug 20, 2020 5:04 pmFoggy wrote:
I imagine that the IVA provider has looked at past base income and commission and averaged this out to arrive at the new IVA payment .... the bonus should be treated seperately as a one off in the month it was paid.

Your friend's first port of call should be to get the provider to explain, preferably in writing, exactly how they have arrived at their figures, before you can challenge the calculation.
Thank you very much for your reply, Foggy. I will pass this on! Cheers!
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