Urgent news on IPA's - Changes for BRs after 01/12/2010

skylight

dojoman wrote: »

I thought the whole surplus was taken in an IVA!

You are right - all the surplus is taken in an IVA and the budgets are extremely harsh compared to BR. Plus if you are trying to protect a home with an IVA you are usually expected to re-mortgage in the final year to pay off the IVA (which is almost impossible anyway with a naff credit rating).

If there is no equity and you want to protect the property (home only) BR is (IMO) the way to go.


Investigate and compare DMPs, IVAs and BRs, very, very carefully.

Daisy4567

dojoman wrote: »

I thought the whole surplus was taken in an IVA!

No not according to Grant Thornton and our IVA Proposal. I thought it was 70/30 but apparently 50/50 is quite usual

kepar

I appreciate what you are saying His and Hers, but this constraint is only for 3 years. From what I have read allowances for DMP's are not as large as BR.
My wife got an IPA of nearly £400 and so she had approx £150 a month spare, we have managed to save this and lived inside the allowances set by the OR. It has been tight at times, but careful budgeting and removing impulsive buying we are managing. We lost the car as it was on HP terms and went without one for six months. Eventually managing to pick a run around up for a few hundred. Because the OR had deemed a car wasn't needed for work or lifestyle we have had to pay for its running out of our allowances.

Putting in regular SOA's when circumstances change can help.
We are now nearly two years into it and will be celebrating in Jan 2012 when the last payment is paid and we will be nearly £400 a month better off tax free. To get extra money we have done car-boots and sold on ebay etc. These have paid for a few treats.
I know we are lucky in that we are saving the excess but the thought of living in tight constraints for 16 years is beyond me.
I know things would be tight for you, but there would be an end, 3years or 16 I know which I would choose.

I do not know your situation, but if you have your own house in a few years you will see it falling down around you as you haven't got the money to sort it out. You will become prisoners in your own home. Unable to sell, unable to move and the costs to repair, replace etc will be beyond you.

dojoman

Daisy4567 wrote: »

No not according to Grant Thornton and our IVA Proposal. I thought it was 70/30 but apparently 50/50 is quite usual

Before I went BR I was going down the IVA route, and it was definitely the whole of your surplus that was taken.

skylight

Daisy4567 wrote: »

No not according to Grant Thornton and our IVA Proposal. I thought it was 70/30 but apparently 50/50 is quite usual

If thats right then that would be great for you.

Check and check again before you sign anything. I have seen posts of IVAs suddenly changing halfway through as the IVA company dont think the payments will now be enough for the agreement, and as mentioned in my previous post many posters suddenly find they have to go BR anyway after paying 3-5 years as they cannot realise equity in the home. (From various IVA companies).


There are posters here who do not speak highly of Grant Thornton (actually to be fair that applies to most IVA companies!) so get a calculator out and work those little grey cells! Compare there SOA to yours, how much do they say you have to pay in total? How much are you paying in total etc. Are their fees included in all those calculations?? They are a business and are selling you a product; not helping you so make damn sure that its all going the way you want.

Daisy4567

[FONT=Garamond, serif]"Should I receive any overtime, bonus or commission payment which was not included in the original surplus income calculation attached at Appendix IV, and if this sum exceeds 10% of my normal take home pay then I shall disclose the receipt of such monies, to my Supervisor within 14 days of receipt and pay 50% of the amount over and above the 10% to my Supervisor within 14 days of the disclosure. [/FONT]
[FONT=Garamond, serif]The Supervisor will be able to reduce the contribution by up to 15% in total relative to the original proposal without referring back to creditors, to reflect changes in my income and expenditure, such change to be reported in annual reviews."[/FONT]


[FONT=Garamond, serif]Copied from our IVA Proposal[/FONT][FONT=Garamond, serif]?[/FONT]


[FONT=Garamond, serif]
[/FONT]

dojoman

Daisy4567 wrote: »

[FONT=Garamond, serif]"Should I receive any overtime, bonus or commission payment which was not included in the original surplus income calculation attached at Appendix IV, and if this sum exceeds 10% of my normal take home pay then I shall disclose the receipt of such monies, to my Supervisor within 14 days of receipt and pay 50% of the amount over and above the 10% to my Supervisor within 14 days of the disclosure. [/FONT]
[FONT=Garamond, serif]The Supervisor will be able to reduce the contribution by up to 15% in total relative to the original proposal without referring back to creditors, to reflect changes in my income and expenditure, such change to be reported in annual reviews."[/FONT]


[FONT=Garamond, serif]Copied from our IVA Proposal[/FONT][FONT=Garamond, serif]?[/FONT]


[FONT=Garamond, serif]
[/FONT]

I`m sorry but that is as clear as mud to me

fermi

dojoman wrote: »

I`m sorry but that is as clear as mud to me

It's what can be taken of any bonus or non regular overtime. The same sorts of payments that the OR normally wouldn't bother collecting under an IPA.

Nothing to do with what would be taken from the normal regular SOA surplus.

If I read the correctly, anyway.............?

skylight

So that simply says that they will take 50% of your overtime and bonuses plus 50% of any pay rise etc you will get (thats more than 10% of your normal take home pay). That doesn't refer to your surplus on your normal wage. And its reviewed in an annual report. They are also telling you that they could make an allowance of NOT deducting upto 15% of these bonuses to reflect potential changes in your SOA and that things may cost you more; and that they can do this without telling creditors (until the annual review). Upto 15% can also mean 0%.


EDIT - 10% of your normal isn't a lot. If you work full time at 37hrs a week, then anything over 4hrs a week would need to be declared (thats less than an hour a day). EG if you worked 5hrs overtime a week for £10 an hour thats £50. Less tax so you take home £35ish. Half of that you have to pay over so for your 5hrs extra work in a week you are left with almost £17. (Really poor comparision though, but do you see what I mean??)


Edit as a PPS - BR payments are for 3 years and IVAs can be 5-6 years.

PPPS - Can you tell I am not a fan of IVA's??!!!

Charco_2

Dear dear Daisy, it seems you're getting in a right muddle! And panicking, and flustered... this debt melarky is not easy!

Skylight, NOBODY should have their IVA failed for not being able to release equity... you are only expected to bring in equity that your CAN release! If it seems that you have equity you must try to release it, if you can show that you cannot release the equity then the IP will extend the IVA by 12 months (or if you're lucky he'll accept that you have no equity and end the IVA successfully - i accept that there are bad IVA companies however!)

Fermi is right, Daisy seems to be getting confused over normal contributions and extra contributions due to overtime or bonuses!


EDIT: Also in response to Skylight

The 15% rule is that the IP can REDUCE the debtors monthly contributions by 15% at any stage if for any reason the debtor is finding the repayments difficult... The IP will not have to call a creditors meeting to agree this!
(ie - your monthly contributions are £250. This is leaving things too tight for you at home, instead of having to call a whole new creditors meeting, your IP will have the power to review your case on his own and can reduce your monthly contributions down as far as £212.50 if you feel that this would be helpful... anything more than this and it would require the agreement of your creditors)

The 10% rule: If the debtor earns £1000 a month, then they can earn a further £100 a month in overtime or bonuses without having to increase their payment to their creditors/IVA. If they earn a further £150 in any month then they keep the first £100, and split the remaining £50. So they would keep £125 and pay £25 to the IVA/creditors. All of this increase would go to creditors and not the "greedy" IPs.