IVA question

greenbrucelee

I am two years into my IVA and my proposal is to pay around 37% of what I owe.

However due to over time etc I am on course for paying nearly 50% or even more. Do I have to pay as much as I can or if I get to the 37% can my IVA be finished early?

UpToMyNeckInIt

You have to repay as much of your debt as you can reasonably afford over the IVA term. The '37%' is your minimum agreed dividend.

FiatFan_2

Yeah that ^^^

Unfortunately you can't account for overtime in the I&E so it's inevitable that some will have to be paid into the iva, which about 15% benefits the IP and the rest to the creditors.

Assuming everyone is on the 10/50/50 rule, does everyone pay in monthly or do some pay in quarterly/bi-annually or annually? iirc UTMNII you're self employed, do you pay monthly or a.n.other?

UpToMyNeckInIt

Hi FiatFan,

Firstly, I only have a 50/50 arrangement (not all IVA customers have the 10/50/50 rule). Saying that, I have been assured that in my case, being self-employed, and that everything has to be calculated based on the most recent annual accounts, that a 10% variable is applied.

So in my case, the rule regarding O/T, bonuses etc is done annually. If you are a Monthly-paid employee, then typically you apply the 10/50/50 (or 50/50) rule Monthly as well.

Weekly paid people often have to calculate this based on a 12-week average.

There was an interesting debate on how to apply the 10/50/50, rule here (this was a case where the customer felt that their IVA contract was unclear on the subject:

http://www.iva.co.uk/forum/topic.asp?TOPIC_ID=56501

Hope you find that helpful.

FiatFan_2

Good discussion in that thread UTMNII, as always loaded in the IP's favour so they get their cut before the creditors

greenbrucelee

Thanks for the replies everyone.

I get paid monthly and when my Salary exceeds a certain amount I am allowed to keep the first 10% and anything over that I have to pay half into the IVA.

Sometimes it feels that you are doing the extra work i.e overtime for nothing though and you would have thought that they would see this. It wasn't my fault I got into debt. I had my salary cut by 22.5% and couldn't afford to keep up my payments to any creditors I had which before hand was no problem at all.

FiatFan_2

Completely understand where you're coming from GBL, I didn't get paid overtime in my previous job (when I started my iva) whereas I do in my current job, when it's available. Whilst it's a slight annoyance, I'd rather have the 10+50% extra in my hand than pay it all out to my creditors had I not been in the iva.

I had been thinking along the lines of the thread UTMNII quoted, had my o/t been balanced out over 3/6/12mths then am sure ad pay very little in comparison to what a monthly payment would be as their are more months within the 10% than over.

If you're just in a single iva, could you only work enough o/t to keep you under the 10% or is it on a company needs must basis?

UpToMyNeckInIt

In the event of a big bonus / OT payment, another option might be to ask your employer to pay it to you over say 2-3 Months, to keep it under the 10%. Alternatively, you might have options to take some/all of it as time-off in-lieu instead.

Anything to minimise what you legally have to hand over, can only be a good suggestion.

FiatFan_2

Forgive me for what could possibly be worded better, in a totally hypothetical situation as it's a definite breach of protocol.

In my annual review pack was a section "Additional Income Declaration" where you'd tick one of three boxes,
1. no additional income above threshold in last 12mths
2. all additional income has been declared and paid
3. additional income has not been declared or paid, details are

So, if over the year your allowable income was say £20k (1666pcm), therefore total allowable £22k (1833pcm) before declaring. Say for instance you had 9 mths at basic and 3 mths with overtime which exceeded the 1833pcm limit, but annually would be under the total allowable, would you consider retaining the extra and hope/expect to get away with it, pay up when due (monthly) or retain it and confess and pay on review?

Does that make sense to others than just me? It's not something I could consider myself as I know this year we will exceed the total allowable so no chance to consider hiding any

In this situation it would be a clear breach of protocol if found out. But what does that mean in terms of consequences? 30 days to rectify the situation, termination or a.n.other?

UpToMyNeckInIt

Hi FF,

A great example of unclear wording, arguably at odds with the IVA protocol (if you think about it, it states working such things out monthly - apparently). I assume you have nothing in writing elsewhere, requiring you to do monthly calculations?

Based on the wording you describe, and your worked example, you could tick option 1. Personally, I think that is quite fair. Taking your example further, what if you had a prolonged period of sick-leave, which may require you to take unpaid leave/stat. sick pay? It's going to cancel out the odd bonus and some.

Anyway, if your IVA co. argue the toss, you can point out that their wording is unclear. Ultimately though, the IVA co. may argue a 'breach' with 30 days to repay (v. unlikely to fail the IVA).

To be on the safe side, keep 50% of the O/T set aside, until you are 'in the clear' after the review.

FiatFan_2

Aye ours states paying over monthly for any additional income over the predetermined amount, just like the OP.

In the annual review paperwork, it does state in bold that all income will be checked so depending how close to the bone you are, you could likely get away with it if you took the chance.

As you say, if you didn't pay the money over and saved it then if the IP did issue a breach notice with 30 days to pay you could quickly pay the money over and hopefully that would satisfy the IP.

My only gripe with the system is it penalises those who maybe only get a christmas bonus rather than those that may earn 8-9% overtime for several months