Pay rise and IVA

argumentativeviper

Hi all,

I am in an IVA for around £8,000 of debt - I do believe I was pressured somewhat into it by one of the debt advisors I spoke to and I should've taken more time to consider my options, but ultimately the decision was mine. At the time I was on around 25k and was spending most of my money after bills on my debt repayments.

Now here I am less than 2 years later, now on 46k and I now have around £1000 a month left over after bills. I've told my provider as soon as I got my pay rise about it, however I am worried that they will bump my IVA repayment up to an eye watering amount.

My question is this:

I believe that if my repayments went anywhere above £300 a month, I would have "paid off" my remaining debt + IVA fees before my 5 year contract ends. 

Which of these is most likely to happen?

1. My repayment reaches nearly £300 a month and I complete at the end of 5 years as planned

2. My repayment reaches some sky high amount and I complete it sooner - is this even possible, is there anything to protect me against being in a position where I end up still stuck in it over 5 years ultimately overpaying my debts?

Do I have an options re: escaping the IVA? I find that I am very unhappy with it and it is not the solution for me any longer, however I understand that I have already made a binding agreement, so I know it is quite unlikely but wanted to ask.

Thanks!

argumentativeviper

I also want to add, if it's of any value, that at the time I went into my IVA I was not behind or defaulting on any repayments - as far as my credit score went it was a very positive report.

Another reason I think I should not have been offered an IVA. 

RAS

Was £8k the debt you had at the beginning of the IVA or is it what you owe now?

Did anyone explain that in addition to the referrer's fee, you (or rather your creditors would be) contracted to pay the insolvency practitioner's fee of between £4-9k? The lower fees tend to be not-for-profits. So if your income increased or you got a windfall, you could end up repaying the original debt and having to reimburse your creditors for the full fees as well ?

argumentativeviper

Hi @RAS

The £8k is the amount of debt I had before starting my IVA.

No I don't believe any of this was explained to me, however I have just looked at my proposal contract and it says "The total cost of the arrangement will be fixed at £3650, including all fees and disbursements for a 5 year IVA, or £4,000 where the duration needs to be extended

to 72 months due to the protocol provisions for equity"

Am I correct in then thinking that the total amount that my IVA is for would be around the £12k mark? If that is the case and I have been in the IVA for 21 months (I have paid £2,500 so far), if I paid more than £240 a month I would be paid off early?