I’ve had an update.
The call from my IP took place without the knowledge of my RM, as I suspected. He’s looked into it, and what it comes down to is an annual report that has to be submitted to my creditor. I wasn’t aware that there was an annual report – I thought there was a review every six months (which took place a few weeks ago) and a report on that review, but evidently not. I’m sure it’s all laid out in my agreement if I have a good look at it. It’s evidently a different process to the six month review. My RM has sent me a lengthy email explaining very clearly how it all works.
This time last year, I didn’t have the second job, so there was no second income to take into account, so no need to contact me to inform me of changes to my payments after an annual review had been carried out, because none were required.
What is slightly unsettling is that this process was carried out without the knowledge of my RM, which I’ve raised and I’m sure he has too (given the amount of work he’s had to do to get to the bottom of it and come up with a solution), as the finer points of how my income from my second job fluctuates would have been made clear to the person doing the report if they’d actually bothered to speak to my RM.
Anyway, the long and the short of it is if there’s no basic or standard amount to include as a second income, they have to calculate an average. I had no problem understanding that, but I did have a problem understanding how it could be implemented fairly if the amount fluctuates, and an extra payment of £53 a month was not a fair figure. This is where it would have been useful for her to consult my RM before submitting a report and implementing an increase.
My RM has told me that, although he would like to continue to assess my second income using the 10% rule that’s been used so far, the rules of the IVA do not allow him to continue to do so now that the annual report has shown an increase in earnings. So, taking into account everything I’d told him about this increase potentially making me worse off for having a second job, he came up with two options – either leave the job, which would have everything revert to normal; or, having explained the position to the IP, who has agreed to the average being recalculated based on the fluctuation of my monthly earnings and come up with an increase of £15 per month, stay on there and pay the extra £15.
Now, I can understand the need for the second income to be taken into account, and I’m quite happy for it to be incorporated into my monthly payment. So my RM’s recalculation makes far more sense to me, and in all honesty I’d prefer a slight increase to my monthly payment (as opposed to the original proposed increase of £53) than having to figure out each month whether or not I need to make an additional payment. It’s manageable whether I have a busy month or not, and I guess it reflects well on me to be happy to do that as far as things go with my creditor.
Of course, if I leave the job (which I’ve been thinking about doing), it’s the first option.
So, panic over. Now the whole thing has been explained to me, I’m satisfied with the arrangement my RM has come up with. I think the biggest issue to have come out of this is a lack of communication at my IP – if the person preparing the report had only informed my RM that she was doing it, things would have been very different, I would have been spared the annoyance of the goalposts evidently being shifted, and my RM wouldn’t have had the headache of finding out this had happened without his knowledge and the resulting extra work of having to figure out a more workable solution.
Still, at least it’s all been sorted before the weekend and I don’t have it hanging over me. Have a great Bank Holiday, everyone.
IVA? Best financial decision I ever made.