my income varies from month to month

[k.h]

I am in a DMP and considering an IVA, however my income varies from month to month in the form of commission and bonus's, how will that affect the IVA with regards the calculation of payments?

[MelanieGiles]

Hi kh and welcome to the forum

An IVA is generally based upon your basic salary, and most creditors now required you to pay over 50% of any uplifted payments received from commission or bonuses. In my practice, we review clients payslips on a quarterly basis and calculated whether there are any additional monies due from our clients, who then must pay those all over by the end of each respective year.

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

[Sadsack]

Hi

My salary is also based on a low basic and commission structure which is very good. When my Income was calculated, my IP looked at all my wage slips for the year took an average monthly earning. If it had been based on my basic salary, I don't think that the IVA would have been accepted. I also do not have a 50% clause within my IVA, only a clause that states that any monies "out of my monthly earnings" which is more than £500 would be considered a windfall and therefore must therefore be paid into the IVA.

I am quite happy with that arrangement.

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[Oliver]

The safest way to work out the income would be to base the monthly payments on the basic element only and then pay 50% of any overtime or commision into the IVA.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[Sadsack]

Unfortunately this would not have worked for me because my basic is so low, I would not have been able to pay utility bills, mortgage and secured loan and IVA out of it. If it had been calculated as you are suggesting, over £1k per month would have to be paid to the IVA.

Sue

Ho Hum! Think I'll bang my drum!

Read My Blog
http://sadsack.blogs.iva.co.uk/

[k.h]

Thanks Melanie

One other question, the company that I work for are talking about giving me a shareholding. This could be excuted when the company floats, potentially within 5 years, how would that affect an IVA?

Hi kh and welcome to the forum

An IVA is generally based upon your basic salary, and most creditors now required you to pay over 50% of any uplifted payments received from commission or bonuses. In my practice, we review clients payslips on a quarterly basis and calculated whether there are any additional monies due from our clients, who then must pay those all over by the end of each respective year.

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

[k.h]

Thank you for your advice, what about if 50% of my take home pay is made up of commission? Would the IVA take into account my current expenditure?

The safest way to work out the income would be to base the monthly payments on the basic element only and then pay 50% of any overtime or commision into the IVA.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

[MelanieGiles]

Hi kh

If your company provides you with a shareholding during the IVA, this is going to be treated as a windfall, and the shares then may subsequently need to be sold. I suggest you wait until the IVA has ended if possible.

Commission payments will also be subject to the 50% uplift provision.

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