IVA & Bonuses

NeedToTurnLifeAround

Good evening, I’m seriously considering an IVA and wondered how best to proceed as I receive a bonus from work mid April of around £5k.

Should I wait after I receive my bonus before processing the IVA or does it not matter?

Thanks

Craig1981

if it is a guaranteed yearly payout, then it will not matter, as they will use this figure along with your usual wage to determine your annual income.

if the bonus varies and not guaranteed, then yearly, you will get to keep 10% of your earnings, plus 50% of the remainder. the other 50% gets paid to the IP. example. bonus net is £5k, your monthly net wage is £2k. you keep £200, and the remainder of £4800 is divided between you and the IP, so you would pay £2400 as a lumpsum on the bonus

hope this makes sense.

have you spoken to Stepchange, National Debtline or Payplan to ensure IVA is right for you?

NeedToTurnLifeAround

Hi Craig, in April I will receive usually salary of £3100 plus the bonus of £5000 there after tax and No I will come out with £5400.

What will the 10% and 50% be against?

Thanks

Craig1981

if bonus is not guaranteed and varied, if your usual net is £2400pcm, and with bonus it is £5400, then the 10% would be on the £3000. you would keep £300 of the £3000, and then pay £1350 as a lumpsum to the IVA, and keep the £1350. so you will keep out of the net £3k bonus, £1650

NeedToTurnLifeAround

Thanks Craig - if I went into an IVA after receiving the bonus what would happen? Could it be requested 50%

Craig1981

not sure to be honest. £2400, depends on what it is being spent on, may need to be declared as an asset
car cant be valued at more than £3k (dont know if this has changed or not)

other high value assets, like property, jewellery and cash/savings need to be declared

as previously stated, you need to speak to Stepchange, National Debtine, CAB, Payplan to ensure it is right for you. there are a lot of posts complaining about mis sold IVAs