IVA advice

Reppo

Hi again all. I have spent the last 10 days considering my options after contacting the National debtline and CCCS and reading the reems of info on here and other websites.

I owe £24,000 made up of two bank loans, an overdraft and various payday loans. It would seem that my best course of action would be an IVA as I could find £200 a month without it hurting too much. Paying this much into a DMP would take forever to pay off the debts even if my creditors would be in agreement.

One think I wanted to ask and forgot though - how are overtime and bonus payments treated in an IVA? I don't have the opportunity of overtime very often - but would I have to declare it and if so would this extra income over and above my normal monthly income have to be payed into the IVA?

Many thanks

DevilPigeon

Hi

Each IVA is different (the "I" being "individual" ) but when I was in an IVA some years ago, my agreement stipulated that 50% of anything above and beyond my normal monthly wage would have to be declared and paid in. These additional payments would have to be paid as a single sum (by cheque) to the IVA company at the end of each year within the IVA.

This may be a general rule of thumb for overtime and such, I've seen similar posts elsewhere alluding to this.

System

Reppo wrote: »

Hi again all. I have spent the last 10 days considering my options after contacting the National debtline and CCCS and reading the reems of info on here and other websites.

I owe £24,000 made up of two bank loans, an overdraft and various payday loans. It would seem that my best course of action would be an IVA as I could find £200 a month without it hurting too much. Paying this much into a DMP would take forever to pay off the debts even if my creditors would be in agreement.

One think I wanted to ask and forgot though - how are overtime and bonus payments treated in an IVA? I don't have the opportunity of overtime very often - but would I have to declare it and if so would this extra income over and above my normal monthly income have to be payed into the IVA?

Many thanks

Hi Reppo and welcome to the forum.

If you’re thinking of doing an IVA through CCCS we have a blogpost which explains exactly how bonuses and overtime are treated.

As DevilPigeon has suggested each IVA is different but as a general rule of thumb you could follow our advice below.

http://moneyaware.co.uk/2012/08/its-an-iva-overtime-salary-bonus/

I hope this helps.

Kind regards,

Mat

fermi

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere (please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL="forumteam@moneysavingexpert.com"]forumteam@moneysavingexpert.com[/EMAIL].

Reppo

Hi again all - and thanks for the advice so far.

A couple of questions regarding IVA's.

Firstly how long does it take to get the wheels in motion? I have setup a new bank account and arranged for my salary to be paid into it at the end of this month - but obviously im now expecting all and sundry to start calling because they have not recieved monthly installments/loan repayments etc.

Am I better off writing to each of these companies in advance asking for 30 days grace while im considering my options - or should I leave this to my IVA representative. Im just concerned that it may take a few days or more for this process to take place?

Also what happens if im in an IVA and im then made redundant? I appreciate that any redundancy payment would have to be paid into the IVA should I get another job straightaway - but what happens if im unable to find another job in the short to medium term - i.e if the redundancy pay has been paid in as a lump sum but then im unable to make the monthly IVA installments because I have no income?

Thanks again in advance.

debtinfo

basically if you become unable to make the payments (there is a little room for a reduction but not much) then eventually the IVA will fail and you will be back to square one

milliemonster

If you are made redundant during an IVA then normally they allow you to keep up to 6 months equivalent salary out of your redundancy first in the hope you manage to get another job, if that doesn't seem forthcoming or the only job you can get doesn't pay enough to sustain the IVA, depending on the redundancy pay you received/the point of your IVA this happens, they may either accept your redundancy to complete the IVA early or accept payments made to date as a full and final, but much depends on how much you get compared to the dividend expected on acceptance of the IVA and how far into the IVA you are if this happens.

Most IVA's now are protocol compliant which basically means you get to keep the first 10% above your basic income and split the rest 50/50 so you only pay 50% of anything above this into the IVA. Payrises are dealt with in a similar fashion in that many IVA companies only look at your payrises at review time, as opposed to some who want to increase your payments the month you get a payrise (Payplan are one), but they usually only take 50% of any payrise into account.

Reppo

Thanks for the replies everyone.

Any thoughts on contacting my creditors?

Also I have a small bonus payment due at the end of next month - maybe a few hundred pounds. Im assuming that my IVA wont be in place by then so would that have to be declared?

mrspacino

i really need some advice i have 11,500 debt which is 2 credit cards and a payday loan, i am on benefits due to illness and the interest is crippling me i am looking for a way of easing this an finding a more affordable way to live!!!! can anyone help please??? :(:(

debtinfo

contact, CAB, CCCS, National debtline, one of the possibilities that may be applicable is a DRO, which they will explain to you if you ask