perhaps if overtime issues were standardised...

[s.b]

After letting my ip know that I had a pay rise (£500 per month) they have now let me know that they will be taking all of this! This takes my payments to £1025 per month and means that I will be paying more than £10,000 more than I owe including all fees, my question is am I in a position to negotiate with them into keeping a small amount of the rise? I used to get a bonus through work and this is now paid as part of my salary which is why my salary has increased so much. I am nolw worse off that when I took out the iva as I had a £1300 bonus to look forward to 3 times per year of which 50% was paid to my iva company and now I won't get that so my pay rise has been a curse! Do you think I will be able to negotiate my payments to £900 per month? any advice appreciated, thanks

[MelanieGiles]

Hi sb

Are you incurring any further expenditure since you received your pay-rise? If not, then your IP is right to seek all of the money - after all you borrowed the money in the first place, and presumably expected to have to repay it. As a matter of interest, what was the level of contractual debt repayment you were required to make before entering into the IVA?

That said, I do feel that you ought to be allowed a little leeway with regard to your payments, so continue to negotiate with your own IP who has specialist knowledge of your case. And don't forget, the sooner those debts are paid off the sooner you can start afresh!

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

[Adam Davies]

Hi
I do agree with you.
We have debated this before on this forum and I personally feel that only 50 percent of payrises should go towards your IVA after an allowance for any increased expenditure.The simple reason for this is that we all need to be incentivised at work but it must be very hard to be if ALL your extra pay is taken from you.I can,t imagine anybody being happy taking a better paid job and the responsibilty that goes with it knowing that all of the extra money will be paid to someone else.
Yes it,s very commendable in paying back as much as possible but there mut be an incentive to do this.
I suggest that you speak at lengh with your IP,check your expenditure and possibly speak with your employer and see if they can revert back to paying you a bonus
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[s.b]

Thanks Andy and Melanie to your replies to my question regarding my pay rise. My original payments were £543 per month plus £635 3 times per year which was 50% of my bonus. I do understand that I need to pay back as much as possible but not when I am paying more than £10,000 more than the total debt and they won't reduce the term, they just say any over payments would be looked at once the iva is complete!

I moved house and my expenditure went up which they have taken into account but I still think a rise of £482 per month is too much and I can't like on the surplus for the next 4 years (£275 per month). Their letter says that in the T & C's they take all of a pay rise but I jhave been through then with a fine toothcomb and cannot find anything of this at all. Do you think my offer of £900 would be agreed to? This would leave me £400 per month disposable income which would be more or less the 50% of the bonus I was allowed to keep. Thanks again

[MelanieGiles]

Hi sb

I'm with your IP all the way on this one - I could agree with Andy with regard to overtime payments where there probably does need to be some incentive to work harder - but this relates to a pay rise and is hardly the same thing.

Put it this way, had you not been in an IVA, but still struggling to make your contractual payments to creditors, the pay rise would have been a god send in that you could have paid more off the debts and cleared them earlier. The same principle should apply during the IVA as well.

If your IP accepts any less than you are required to retain for your usual household needs, he/she is not carrying out his/her duties appropriately for creditors. If you cannot see where this is referred to in the IVA proposal, ask your IP to point this out to you.

I have noted that you will be paying back more than £10,000 more than the total debt - which I assume represent the IP's fees and disbursements. How much interest do you think you would have had to pay over a five year period, had your creditors not agreed to your IVA? Probably a lot more, and in the meantime you have gained the certainty that they cannot commence or continue with any form of legal action against you. It seems a very fair deal to me.

I kmow that my reply will not be popular amongst our regular forum members, but as an IP in practice - we can often be unpopular, but we have to do our job properly and I think your supervisor is. Try and negotiate on the £900 figure - my gut feeling is that if you are being completely co-operative, rather than complaining against their decision, this may buy you some goodwill.

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]

Thank you Melanie and yes I do agree with you and had it been just a pay rise I wouldn't mind so much but my point is that I only went ahead with the iva as I knew half my bonus was mine and now I get nothing. I will negotiate the figure with him though and report back for the benefit of anyone else in the same position

[Adam Davies]

Melanie
Overtime and a pay rise must be classed as the same.
How are they different ?
Overtime requires extra work as does promotion,not necessarily in terms of hours worked[although this is often the case for a salaried position]but in terms of responsibility.
With both overtime and promotion the person has a choice,so with regard to promotion if someone has a chance to earn an extra £200 per month[net]and under my proposal pays an extra £100 into an IVA.Under your proposal they would pay the whole amount.If they declined the promotion because of this the creditors would get zero extra as opposed to an extra £100............which would they prefer??

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[aguise]

I see Melanies point about paying all that you can back to creditors but also think as andy says that there is no incentive left to improve yourself if all is taken away, if overtime is left at 50% as an incentive then a payrise is not any different. I am lucky mine states 50% of all rises in basic income. If the creditors agree originally to a certain amount surely if they are getting more both creditor and debtor should benefit. In five months of our iva we have worked overtime and paid an extra 1000 to creditors, some may say not worth it, but we have had the benefit of the same amount, so to us it was worth it.

Ang

[s.b]

Thank you Andy and Aguise, I am posting my letter tomorrow so will let you know the outcome. I know you can't think like this but part of me thinks I could have stayed what I was doing rather than with my new position of being stressed out of my head! Roll on 4 years and then it's mine all mine!

[MelanieGiles]

I understand all of your points, and of course every person who is in an IVA generally has a choice whether to work overtime or to progress their careers by accepting promotion.

I would have thought anyone who puts their life on hold, and turns down a promotion - or pay rise, for the sake of witholding monies from their IVA is rather naive, as there is life to look forward to at the end of the arrangement.

This poster had the option to turn down the creditors modification when it was put forward. He accepted it and therefore agreed to pay over his additional earnings - or so we think as he cannot find the reference within the IVA documents. Whether we all feel it is unfair or not, his IP is doing nothing wrong in seeking a full return for the creditors.

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]

I'm not sure what you're saying Melanie. Nowhere in my proposal does it say anything about all my pay rise being taken but they also made a mistake in a previous letter which they admitted to too. I brought this up with the ip as soon as I knew about my pay rise and I am happy to pay it but wanted to raise the issue about my bonus, the whole point of this forum is to discuss things and get advice but with your last posting you are making me out to be shirking my responsibilities which I am not. I am happy to be doing the job I'm doing and wouldn't have turned it down and I look forward to being debt free in 4 years time, I think I was just voicing what other people in this forum think, however we got ourselves into our own individual situations, we all took out iva's so we could pay more back - I could have gone for bankruptcy instead as I have no assets but wanted to pay back as much as I could. Yes my situation may be better than others but all I want to do is see if I can have a little bit more each month without being made to feel as though I'm trying to shirk my responsibilities

[keh]

hi sb,

My iva contract asks for half of any pay rise which i think is very fair as the other half offsets inflation.

In the last 3 years i've had a 4% 3.5% and this year 4%.

I'm paying now about 7.5% more than when i started and my partner is paying about the same.

As for bonuses the same rule applies that they want 50% of any

Keith

The long and winding road will straighten out eventually....keep the faith

[s.b]

Hi Keith
Yes that's totally fair, all mine says is that you must advise if you receive a pay rise and they will decide if a rise in contributions can be made - I've bee through all the letters and the small print bu can't find anything else on this!
Susan

[Lula]

perhaps if this issue was standardised, my terms state 50% of pay rise /overtime/windfall but i note other people have to pay 100% ,,, i think this is where it all stems from.

I agree we all got ourselves into this situation and have made a hard decision to enter into an IVA. I am not asking for tea and sympthy..but a chance to deal with my debt and move on... i think that being allowed to keep some of the overtime/payrise is an incentive and way to make sure the IVA works... (i save any extra money for a rainy day... !)

[keh]

Hi Lula

An totally agree with you that it should be standardised

Susan
I think you should speak to your IP and say that it doesn.t say anything in your contract about pay rise etc and your willing to give 50% and that you think it is fair as the other 50% will offset the rise in inflation

The long and winding road will straighten out eventually....keep the faith