IVA Payrise

paddymcc

Hi,


I have only started paying into an IVA just under £200 a month. However low and behold only started into it and my circumstances change take a change for the better. I have now the opportunity to work overtime more regularly meaning I could earn around £600 a month extra. This fairs well to my future career with this added responsibility. My understanding is that £300 of this goes towards my IVA payments. I also have only a few more months left on my car finance. It means I could end up paying £700 into my IVA a month. This is £42k over 5 years, double the amount I originally owed and this is before my mortgage is assessed going into year 6.


So over the next few years my creditors will be paid a fair bit more than anticipated, 3.5 times more than agreed and 2x more than originally owed. Whilst I'll have to run my car into the ground on my daily 100 mile commute, struggle to keep my wife and kids happy with no holidays and little treats. I have to account for every cornflake I eat in the morning, give them an open book access to my bank account and have no pension if I die under all this stress and also be black listed for the many years ahead.


This is not the IVA plan I was sold.

foxy-stoat

I cannot see a question but I would of assumed that you didn't know your additional earning potential before you took out your IVA.

You would of known how long your car finance was before you started as well.

Good news is that IVA's weren't set up for you to pay more than what the original debt was.

paddymcc

I was told I could take out a new agreement. That was the main selling point of the IVA as appose to struggling on for a bit longer. However in reality I will not be able to get a replacement car.


My job means I am an essential car user.

DorisTrousers

Ok, let's bust some myths here.

Payrises are not dealt with until annual review, at which point your expenditure will be re-assessed along with your income. Any increase in affordability, after extra expenses are calculated, is then shared 50/50. Hardly unfair.

Ad Hoc extra income, e.g overtime is slightly different and does to a point depend on what income level you were on to start with. That works at 50/50 again, but only after you have kept the first 10%. For someone on £2k who then earns £2.5k one month, the bill is £150 and the individual keeps £350, so, again, hardly unfair. Creditors take the viewpoint that without the IVA then more would be paid off anyway, so they do want to see some benefit of better circumstances, however the IVA Protocol recognises that it isn't really fair to unduly punish debtors either, so there is always a fair deal.

As for cars, if they are essential for work, and subject to certain criteria, permission can be granted by the supervisor to obtain a new agreement, providing it does not put creditors at a disadvantage. You would have been informed in writing when you were sent your final proposal as to whether there is a "step" payment expected, so check your proposal first and tell speak to your supervisor to put your mind at rest.