Savings and IVA

kdean

Hi, I have just entered an IVA and payments start on 9th June.

I am amazed how much better I feel knowing that in 5 years it will all be over with and we can get on with our lives.

As we are now looking to the future we will be hoping to be able to buy a place of our own as soon as we can afford it and have the money to put up front for a mortgage (as we have had to sell up and move into cheaper rented accomodation). This involves saving as much as we can in the meantime. On the IVA obviously money is still tight but we do not spend as much on household expenses as they have estimated because we have become so good at budgeting over the past year of struggling. This will leave us between £20-£50 per month to put aside. If the IVA provider see that we have savings will they expect us to increase our payments and will they ask for the savings?

I also assume that any money we earn in overtime they will want at least some of it, clarification on this would be great as I cannot seem to find it in the paperwork.

I am also in the process of ebaying anything that we do not need for extra cash. I would love to be able to put all money into the debt to pay it off sooner but they are writing off so much I dont think it will come to that, just end up paying more to the creditors (which I don't mind since we did borrow it in the first place) and more fees (15% I think) to the IVA company.

If anybody can give any advice on this I would be so grateful.

Kelly

Crown

Hi Kelly,

I am not on a IVA but a DMP. Like you the CCCS helped put together my SOA and arrangements have been made with each creditor based on the amounts shown. Since then we have cut back on a lot of stuff and I also have taken on a second job so I have much more income coming in.

I am using this to pay towards some other debts at present that wasnt included in the DMP and then plan to start saving some of it clear my secured debts. I don't know how they would be able to tell you had had savings unless it was with the same organistions you have debt with?

Have you asked the company you have the IVA with? I would approach them and say "what would happen if..". this way you are not commiting yourself.

To be honest though if you do have debts and have the extra money available you may be better throwing the cash at it and bring your debt free date forward. It isnt really fair on the banks otherwise.

CLAPTON

remember that an IVA lasts five years and you wont be able to get credit during that time.

saved everything you can... what are you going to do if an emergency or unexpected expense crops up... you can't borrow anything and you can't just change your payments either.

usually the IP wants some/all of overtime or windfalls... you really need to check this out ..it should be in the paperwork but if not ask the IP.

presumably there is an annual review.. unless the paperwork says to the contrary you will find they are keen to take any pay rises you have but reluctant to allow you to increase your spending to take into inflation or changed circumstances.

Just save your money for a least a year and see what you think then.

kdean

I have had a look through the paperwork and it says "if in bankruptcy" extra income earned £0-£99 = 0% £100-£149 = 50% £150-£199 = 60% £200-£249 = 70%. Do you think this applies to the IVA also? I was thinking that I would put all overtime in savings until we know and then if they ask for it, it is there and if not we have an emergency fund. They cannot expect us to have no savings because as you say if there were an emergency how would we cover it? And yes we will be having an annual review and no doubt they will be asking for more money if we have it. Hubby's overtime is not guaranteed so it could not be put in but when he does get some he earns £20ph so it does mount up. He would only need 5 hours overtime in a month to go over the £100 mark!

CLAPTON

in practice quite a few IVA eventually fail because people aren't realistic about things like emergency funds... five years is a long time and many things can happen: jobs can change, kids can appear, illness, cars can need replacing etc.

there is no point is voluntarily increasing your payments now that the IVA has been agreed and there is no need to declare things like ebaying etc. keep as much savings as you can.

I dont iunderstand the remarks about bankruptcy..try asking the IP , after all they make a lot of money out of these IVAs

james32_uk

You're not supposed to generate any savings, although you can claim some budget each month for 'contingencies'. I would recommend keeping back money in cash or getting a trusted friend or relative (or child) to keep it safe in their account. Keeps things cleaner