Substantial Wage Increase

ohsouthlondon · 28 November 2018 at 2:30PM

Hello Everyone,

I have searched for the answer to my case, but haven't found anything that quite nails it.

I am applying for a job that will increase my current wage from just over £27k p/a to £45.5k p/a. Quite obviously I am expecting my IVA payment to be increased which I am fine with, but my question is this:

My total debt at the point of entry to the IVA was £20,626. I'm currently paying £134 per month and if I've understood the google results correctly my IVA payment could rise to £734 per month (£134 current payment plus 50% of my £1200 per month wage increase). By the time I begin the job I will have 36 payments (of 60 payments total) remaining meaning the total repayments would be (including my payments to the point of pay increase) £29,908.

I'm assuming that they won't take that much from me, but the question is will they take 100% of the money owed on the initial debt? If so then surely the best option for me would be to kill the IVA and pay the creditors direct, thus avoiding continued damage to my credit rating? (not that I want anymore credit - I'm just pretty unhappy with the IVA company who sold me the rainbow until they had my signature and have since ignored all but my money).

Oh I've also received a £2000 bonus from my current company of which I plan to give the IVA £1500 - I've actually offered the entire £2000 as a settlement in place of the £5200 I owe at this point to see if the creditors will bite, but the £1500 will be paid in if they don't!

I think I've included all relevant info, and I'd be massively grateful for any advice.

Thanks in advance.

PrettyKittyKat · 28 November 2018 at 5:54PM

The payment will increase by 50% of the increase in your disposable income, therefore request an I&E update and update your expenditures accordingly. This is done at the annual review but can be requested at any time and the company I worked for would do this, although I can not speak for all. For example if the new workplace is further away you may need to spend more on petrol, or you may need more money for clothing due to now needing to wear suits etc. - so this is taken into account.

Until the basic payment is reviewed it will be treated under the additional monies rule, so usually the 10% allowance then 50% after.

You would be expected to pay 100% of your debt plus the IVA fees yes. Whilst I can understand your view of 'well I may as well fail the IVA now' you do not know what could happen in the future. What if you are made redundant after 12 months? Or off work on long term sick? If you are paying directly then you will be back in the situation you were before the IVA whereas in the IVA your payments can be reassessed and reduced accordingly, as long as they don't go below the originally agreed amount the IP doesn't have to go back to the creditors they can just make the adjustment inline the with the terms of the IVA.

The damage is already done to your credit file, you are legally protected by it and have the flexibility to reduce payments if your income reduces in the future yet still complete as agreed. Stick with your IVA.

ohsouthlondon · 29 November 2018 at 10:44AM

Thank you for the advice.

Disappointing considering the song that was sung to me before I signed up to the IVA. Perhaps the advertising material should read 'Write off a significant portion of your debt....as long as you promise not to improve your circumstances for the duration of the IVA'.

Don't get me wrong, I'm not proud of shirking the debt that I willingly brought on, but at the time that I was being hard-sold on the IVA I was in absolute opposition to entering one, as I felt it the right thing to do to service the debt. If not for a significant change in my situation (new baby and Mrs falling for the whole 'we're going to sack you due to poor performance but will gracefully allow you to quit' routine when her company discovered the pregnancy) I would not even have considered an IVA.

Creditfix spun me a fantastic story about how the banks and payday loans were bending me over financially as a matter of routine, and that it was virtually my civic duty to 'stick one up them'. Hours and hours they spent setting forth the argument that I was taken advantage of by institutions that were only interested in tying me into debt. Institutions that had already recouped the funds they would lose by caning me on various thinly veiled charges.

They even encouraged me to include in the IVA, debts that I was financially capable of settling at the time. Now I have to fully service the entire amount plus their charges.

The whole thing tastes rank.

PrettyKittyKat · 29 November 2018 at 5:20PM

I'm not sure why you are so angry? It reads like you are angry that you are not getting debts signed off but also angry that you could have paid them in full?

You are not forced into signing up to an IVA, and the IVA was there to help you when you were in a difficult financial circumstance as you say.... one which there is no guarantee would improve or even still will (from your OP you are only applying for a job with a higher wage, so haven't been successful yet).

If you feel that the way Creditfix pressured you into an IVA then I would recommend that you make a complaint regarding this.

Substantial Wage Increase

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