had a large pay rise

[s.b]

I am having a review as I have had a large pay rise. Can they take more money than I owe as I have that much to spare? I owe with fees about €42k but if they take all my pay rise I will be paying about €48 over the 5 years, can they do this? I don't mind paying more if they reduce the term, is the likely?

I wrote to my iva company as soon as I got my pay rise and 3 months later they are still asking for more information which I am sending them. My worry is that they will increase my payments to more than I owe in total including fees which doesn't seem fair but can they do this? I wouldn't mind if they reduced the term of my iva but is this possible? I currently pay €543 but I know have quite a lot of disposable income and they could easily take this to €900 per month which would mean I will be paying about 6 thousand over what I owe in total over the next 54 months.

I got my pay rise just after my iva which was unexpected and if I had known I would never have taken one out. If I start paying increased contributions now it will take me over what I owe but also can they back date payments from when my pay rise started even though I have been upfront and wrote immediately and they haven't yet confirmed an amount? I need to send bank statements but what do they look for on these? As I now have more disposable income I have been spending more, will that look like I'm not careful with my money? Sorry so many questions! Thank you

Thanks in advance

[MelanieGiles]

Hi sb

If you can afford to clear your debts in full at an earlier stage in the IVA, then this will bring the repayment period down, and may save some IP costs as well.

Your IP is obliged to take as much as you can afford at each annual review. Your case is unusual, given that you have received such a large payrise, but I still think that an IVA is good for you as you are not paying any interest on the debts.

My advice is to pay over as much as you can afford, then count off the months until your IVA will be completed by paying the creditors in full. Your IP may backdate your increase, and I suggest you speak to them about this directly. Your bank statements will show the increased payments being paid into your bank, there is nothing more sinister about that, and with regard to your expenditure you should only be spending necessary and justifiable expenditure, as you are still subject to the rules of the IVA.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[s.b]

If they take all of my pay rise I will be paying just over €12,000 more than my debt including all the fees. Do you think they will reduce my iva term? Thanks a lot

[MelanieGiles]

Yes - as I said, your IP can only charge the fees he has agreed with creditors, so once you have paid all your debts in full and the IP outstanding fees your IVA will be brought to a conclusion.

Do check that there is no provision within your IVA for the creditors to receive statutory interest on top in the event that you are able to clear your debts in full. If so, you will need to provide for a further 8% per annum calculated on the full total of your debts.

I am sure that your IP will be able to advise you further on this, when he/she has completed the annual review.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Qikichi]

Melanie

I have this clause in my IVA and I should finish paying in full 9 months early. Is the interest charges for all 5 year at my debt amount or does it work on amount paid off? i.e. 42,000 at beginning. 42,000 - £8000 paid in 1st year so 8% would be charged on 34,000 and 2nd year it would be lower still.

[MelanieGiles]

Hi qikichi

That is a very interesting question. Your IP will need to work out the interest payable by taking into account the payments already made to creditors, So the interest figure will reduce following each individual distribution.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk