Student Loans

[snoogle]

Hi All

Bit stressd now my IVA has been running for 2 months Yay! But....my IP excluded my student loans as I didn't earn enough to be making repayments to them and they are currently deffered. However if my employer gives a 3% pay rise in April this will take me over the threshold to pay them back which would mean £160 per month extra. I currently pay £643 to my IVA which is £0.46 in £ to creditors. What can do? Also my IP is Accuma so well respected should they not have thought of this?

Thanks in advance!

[MelanieGiles]

Hi Snoogle

Yes your IP should have thought about this, but did you make them aware of the impending payrise?

As this will probably serve to reduce your disposable income, as your salary will effectively drop, they may need to consider calling a variation meeting to explain matters to your creditors and see if they are prepared to accept a reduction in payments and therefore dividend.


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

[snoogle]

Hi Melanie

Thanks for your response. They were aware of my salary and aware of the repayment threshold. I didn't make it explicit that I would get a payrise but inflationary payrises are assumed are they not?

Anyway I suppose thats by the wayside now. If a variation meeting is held and I just struggle a bit more can the Student Loans be included in my IVA if I pay more to keep the dividend the same for the other creditors? They'g the same £0.46 in £ then?

Not sure I can go through another 6 weeks waiting though arrrgghhhh

[MelanieGiles]

Yes - it is fair to assume that an inflationary payrise would be forthcoming.

Student Loans will not agree to join into your IVA, they will expect to be paid directly from your salary unless you can negotiate a better settlement with them directly. They will also expect to have their debt paid in full rather than accepting a dividend payment. How much is the debt to Student Loans?

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

[snoogle]

I think I owe about £8500. I suppose I could talk to my mgr and not accept the pay rise.........? (just because the extra amount of money leaving my salary would make the IVA prohibative)

[MelanieGiles]

That is an option - but prejudices the Student Loans company who will have to wait until the IVA is finalised if your employer agrees to maintain your salary at current levels for the duration of the IVA.

This will also be tricky in the long run, as your other expenditure will go up with inflation, and you will start to struggle with the payments if your salary is kept to current levels. It is a Catch 22 situation, but see what you IP has to say on Monday.

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

[snoogle]

Melanie thank you as always. It really is a strange one because a 2.4% rise would be fine but 3% takes me over the limit. Will talk to Accuma Monday, they should be ringing me back.