Second Year Review

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JustPlainStupid
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by JustPlainStupid » Sat Jul 15, 2017 6:37 am
I'm just in the process of completing my second year review.

When I started the IVA, my payments were £780 a month. I've just calculated that my estimated monthly surplus is now about £2200 a month. This is due to a combination of a significant increase in earnings (i.e. no job and dead business to job), moving into a much cheaper house and reducing outgoings in other areas.

In a nutshell, I've gone from being up the creek without a paddle to doing alright.

When I started the IVA, the payments on the debts were about £1300 a month. Will they now take the whole £2250 so I'll be paying more than the payments that got me into trouble in the first place and more than the original amount. The guy from the IVA company told me that an IVA isn't for an 'amount', it's for payments for a set period so I can't look at it like I'm paying off a loan. People have said you can't pay back more than the original debt but I would end up paying back £108,000 at this rate on an original debt of £50k ish.

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Andy
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kallis3
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by kallis3 » Sat Jul 15, 2017 7:42 am
Hi,

If you pay all of that money across (and I'm not sure about that) then once you have paid back your full debt amount plus fees and possible statutory interest, your iva will finish so it will probably not run the full course which would be brilliant!
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Foggy
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by Foggy » Sat Jul 15, 2017 9:01 am
Your IVA payment will increase (should increase) by 50% of the net rise in your income. So increasing the amount the creditors get and at the same time giving you a better standard of living.

As Kallis says --- the term will remain the same unless you hit that full repayment, plus fees and possible statutory interest. Check paperwork, sometimes ith interest is excluded. On £50k you would be looking at something in the region of £80k over 5 years (reduce interest by £4k - ish for every year short of this --- so, if you settled now, it would be about £70k.
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JustPlainStupid
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by JustPlainStupid » Sat Jul 15, 2017 3:43 pm
Thanks guys!

Just to clarify one thing... I get the bit about income. So if I get £100 a month, I think on mine I keep 10% and then split what's left 50/50 with the IVA.

But what about a reduction in outgoings? I've knocked a hefty whack off my expenditure. Will they take 50% of what I've managed to save?

My gripe is also that I spend 14 hours a day out of the house going to London for my job as that's the only way I can earn what I do and have a life. If the IVA is going to take me to a point where I'm actually paying more than I was with the debt then I may as well get a job down the road for 40k less and have a better quality of life.
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Foggy
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by Foggy » Sat Jul 15, 2017 4:18 pm
JustPlainStupid wrote:
Thanks guys!

Just to clarify one thing... I get the bit about income. So if I get £100 a month, I think on mine I keep 10% and then split what's left 50/50 with the IVA.

But what about a reduction in outgoings? I've knocked a hefty whack off my expenditure. Will they take 50% of what I've managed to save?

My gripe is also that I spend 14 hours a day out of the house going to London for my job as that's the only way I can earn what I do and have a life. If the IVA is going to take me to a point where I'm actually paying more than I was with the debt then I may as well get a job down the road for 40k less and have a better quality of life.


Income increases --- the 10% disregard then 50 / 50 split relates to overtime and bonus payments. A permanent pay rise is dealt with as a 50 / 50 split of the net increase at review.

If the IVA takes you to the point where the monthly payment is higher than the debt repayments were you are still far better off in the long term. You will not be paying a chunk of interest and there is a definite end point. Added to this, to fail the IVA now will have wasted the last couple of years, lost the monies you have already paid and will see your original debt increase when the creditors add back lost contractual interest as well as possible late payment charges. They are also then free to enforce repayment as they see fit.
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JustPlainStupid
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by JustPlainStupid » Sun Jul 16, 2017 4:59 am
Thanks, Foggy.

I guess in the scheme of things, I'm 2 years in. I've paid about 18k. If they take every penny of my surplus now, based on your estimate of the original 50k actually being 80k in reality then I could still end up getting out a bit early. I'll have paid the 50k by about the middle of year 3. and 80k at the end of year 5. I'm 99% sure I'll end up doing 6 years as my ex lives in the jointly owned house with my 2 daughters. The youngest will be 14 at year 5 so getting equity is going to be extremely difficult.

I wasn't saying I was going to fail the IVA, by the way, I was thinking that if my income went down then they'd have to take that into consideration. If I'm going to end up with all my surplus being taken and be left with just the essentials then I may as well have a job just down the road and at least get some time back.
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JustPlainStupid
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by JustPlainStupid » Sun Jul 16, 2017 5:09 am
@foggy...

Just been reading your blog. Gives me some hope :)

You mention a credit card. One thing that terrifies me is that I have to go away on business trips. Sometimes I can run up a few hundred quid in expenses which, so far, I've managed from my current account by getting the claim in quickly when I get back. I've been lucky with timing so far. If they sent me away for 3 days closer to pay day then I'd struggle. I was thinking about trying to put some money aside to get a prepaid credit card. I guess just sticking it in a savings account and transferring it if needed would be the best option. What's your thoughts on that?
redboxtree
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by redboxtree » Sun Jul 16, 2017 7:49 am
There should be no problem with you having a prepaid credit card and at times I used to find it a helpful way of setting money aside until it was needed.

You need to make it clear with your IVA company that anything that gets repaid linked to travel expenses is not income - there have been some examples where that has happened.
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JustPlainStupid
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by JustPlainStupid » Sun Jul 16, 2017 8:54 am
redboxtree wrote:
There should be no problem with you having a prepaid credit card and at times I used to find it a helpful way of setting money aside until it was needed.

You need to make it clear with your IVA company that anything that gets repaid linked to travel expenses is not income - there have been some examples where that has happened.


Good point! Thanks for that. I'll add that to the notes on the form.
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Foggy
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by Foggy » Sun Jul 16, 2017 9:16 am
I agree with the pre-paid card idea. Credit cards get so easily out of hand when things are tight! Travel expenses apart -- if you can squirrel away a small contingency fund it could come in handy for all sorts of rainy day things.
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Lisa Thomas
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by Lisa Thomas » Fri Jul 21, 2017 3:48 pm
Depending on the figures you could potentially save your share of the overtime to put together a F&F offer from it.
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