IVA for the self employed

mike1976_2

Hi all,

Looking into an IVA and I am self employed.

If I was to earn more over the future of the IVA then would I have to pay more into the IVA or is it a case of the agreed amount is fixed.

Lets say I found myself with an extra £200 - £400 disposable income a month?

Thanks
Mike

Emmzi

I'm not sure of your motivation for asking this question. Could you explain?

mike1976_2

Well i am likely to enter into an IVA in the next few weeks based on my current earnings.

However I am in a good chance of a new contract at the start of 2007. Which would increase my earnings.

So I was wondering what happens with the IVA as by that point I could make min repayment figures ... but if I was in IVA by that point would I pay more into it to pay it off earlier than scheduled or does that money go against what you owe but have written off.

james32_uk

Unfortunately if your income goes up your payments will increase without your number of payments decreasing. The payment amounts should get reviewed at every review period.

mike1976_2

Cheers James

Thats what I was expecting but wanted to check as Payplan not open.

Emmzi

IVA seeks to be fair to creditors.. so if you have more, and they're owed more, they get more.

The greater problem is probably if income drops. Creditors can petition for bankruptcy if you fail to keep to the agreement. Is your business looking secure?

mike1976_2

hi emmzi

thanks for response

it is. the trouble is i have used CC's to support myself while it got up and running.

i have this contract up and coming and then in 2008 there is a chance to expand so it would be interesting to see how the iva affects that. prob best for business debtline on that one.

what would be best would be to have a DMP and use the extra 2007 money to expand for 2008. does a dmp work that way?

mike1976_2

my circumstances are:

Creidt cards: £30,000
Loan: £4,000

min rep acroos both: £700

income: £1,500

outgoings: £905

mort: £600
maintenance: £40
council tax: £70
elec: £20
water: £20
phone: £20
insurance: £30
car: £70 (petrol, ins and tax)
mobile: £20
net: £15

mike1976_2

my income is likely to be £1900 by jan 2007

Emmzi

Mike,

I just did a massive double take at 30k on credit cards!!

How do you keep business and personal finance seperate?

Do you have a business bank manager? Adviser from local enterprise trust for grants etc?

mike1976_2

the odd thing emmzi is that has now become the norm for me

yes i have a private bank account and a business account. the only time they interact is to take my dividends from business to persoanal.

i quit my job 3 months prior to starting up the business and there was c.£5,000 on it before that. the rest has accumulated over the last 18 months.

do you know a lot about iva's and dmp's?

could i do a dmp on that amount? it would be greta for the business and myself to take that over 10 years.

i could manage that amount even without expansion. i would also pay all the amount back. it would allow my excess funds to go back into the business and if that worked i could over pay the dmp.

or does it not work that way?

im not worried about finance ratings over 10 years ... i have enough debt thank you