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IVA and a new job dilemma!

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Tuck1705
Tuck1705 Posts: 16 Forumite
Hi everyone,

Myself and my partner are considering entering into an IVA. We own a house but have been renting it out for the past 18 months after having to relocate due to work. Unfortunately our tenants have moved out and we are struggling to get new ones. We cannot afford to pay the full mortgage (we were still topping it up with £200 a month even with tenants) as well as pay rental in our new location.

To compound the problem the house is in negative equity by approx £25K (bought it in 2007 and it has nosedived since) and our mortgage is interest only. To reach a conclusion to this problem we have been advised to do an IVA to include the debt coming from the house sale and also are own personal debts (around £20k).

As I understand it an IVA allocates you 'x' amount for living expenses, priority debts etc and then pays the rest to your creditors. My enquiry revolves around how these figures are allocated. Are these living costs (food,fuel, clothing, leisure etc.) fairly standardised, so living in an IVA is pretty much the same for everyone in terms of how much your allocated to live on?

Reason being I have just been offered a new job! it is going to pay me £15k more than I earn currently. The timing is good as my wife is pregnant and will stop work in a couple of months so the extra money will be useful. The thing is though I am not overly keen to change jobs and my current employers are willing to up my wage in order to keep me (although not to the levels of the potential new one).

I guess what I am asking is does earning more money actually make any difference to what you have in your pocket/standard of living in IVA conditions? Wouldn't I be allocated the same living costs no matter what I am earning, with the rest just going into the IVA.

Given that an IVA is fixed term its not as though a wage increase would help to pay it off quicker? so is it worth me moving away from an enjoyable job to another (albeit better paid) if all it will do is increase my contribution to my creditors and essentially be swallowed up by the IVA??

Sorry this was a little long winded but got there in the end!

Any advice would be greatly appreciated as I need to make a decision in the next 48 hours.

Tuck

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