Hi, We are in an iva, we save our contingency money and my husbands annual bonus. we are always upfront about our savings and his bonus. we recently bought some royal mail shares with our contingency money. the annual review picked up on this and they have said we have to sell the shares and send them all the profit. Is this correct, as we feel that we should be able to keep some of the money as they would not have had anything if we hadn't of taken this risk with our own money. Any advice would be much appreciated
Doesnt sound right to me. what you do with your contingency money is nothing to do with your IP. Like you said if you have been open and honest with them about bonuses etc surely its none of their business..
I would challenge this - what you do with your allowances and any bonuses etc after you have paid across the 10%; 50:50 rule is yours to do as you want with.... I certainly would not be cashing them in yet until this has been discussed in more detail with your IP direct.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I thought we should be able to at least some of it but when we asked we were told that the shares are an after aquired asset and we cannot keep any of it! I have spoken to national debtline today and was advised the same. the lady I spoke to at national debtline just kept saying it's not your money. we have only made £944 anyway. I thought you could keep £500 of any windfall.
Thanks for your replies, really appreciate it
Was the original money used to purchase the shares from your savings from your allowances ? or from your share of any overtime worked or bonuses ? If it were then I really think you need to keep on this - I may be wrong but would be fighting to the end on it.
£944 is a lot of money to loose - at the very least you should be allowed to retain your initial investment amount ....don't give up hope !
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
Patty -- just to clarify -- the windfall deminimis ---- it means if the whole windfall is less than £500 you keep it: windfall £499 and you keep it. Windfall £501 and you lose the lot.
That said -- in the case of these shares -- what you do with monies rightfully saved from legitimate allowances is your business alone. However, they will have a call on profit or interest earned.
I would imagine they can realise this interest by either the sale of the shares, or, more sensibly, a valuation toward the end of the IVA andf extra payments made to cover the amount.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
If you purchased a scratch card with your share of any overtime/bonus or you used money saved from expenditure allowances you would have to pay the winnings into your IVA as it would be a clear winfall, I guess the share profit is seen by the IP as the same.
Hi everyone, thanks for all your comments, I understand what your saying foggy about the windfall and also what your saying Andy about the scratch card scenario.
We did buy the shares out of my husbands annual bonus and savings we have made by saving our contingency money, dental and medical money, socialising money etc etc. We were totally upfront with IP about bonus and the fact that we save everything we possibly can which is very hard.
Anyway it seems there is no way round it, apparently it's like gambling with your own money, if you win you still have to pay, just like the scratch card Andy.
Just to add yes we have been allowed to keep our initial investment, as as it is out contingency and some of our annual bonus
Your savings money is yours to do with as you wish on a £ for £ basis. So if you have saved £500 and want to spend £500 on a holiday, that that is your decision to make with your own money. However if you have saved £500 and purchase shares, and the shares increase in value to £1,000, the £500 profit is a windfall and has to be declared and paid into the IVA unfortunately.
Thanks Melanie,
never mind, you win some and loose some! at least we still have the original money. We have sold the shares now and will be forwarding the profit to our IP as soon as it clears.
Thanks for all your replies, kind regards, patty
Whilst I see the logic behind this and would have expected the rule to apply as the experts advise... I would say in a 'fair' world perhaps this should be looked at in another way.
In an IVA, should I choose to do overtime to make more money... the 10% 50/50 split would apply to any overtime monies. This gives me an incentive to do the overtime and benefits the creditors with an uplift. Everybody wins.
Perhaps in the event where someone works hard at saving money to make an investment which through that effort then makes a profit, the same 10% 50/50 split could apply? This would then incentivise people in the same way and again all would win.
Not all of our jobs give access for overtime (mine doesn't) but where people in IVA's could find other ways to bring in profit, perhaps the very fair 10% 50/50 rule should also apply so as to encourage people to find ways to bring in extra income.
I myself considered the post office shares but immediately dismissed the notion assuming as per the above example that I would lose all profit. In this way creditors lose any benefit they might also have gained as the effort and trouble holds no reward for the debtor (other than the moral high ground of repaying more).
I totally agree that by the letter of the IVA rules the profit from the above shares should under law be paid over. From an ethical point of view and also from one looking to maximise peoples motivation for getting higher creditor returns, perhaps this is something that possibly one day should be reconsidered so as to encourage these profit building enterprises from those of us in IVA's?
Just a thought for the day [:I]
"Hope is the feeling you have that the feeling you have isn't permanent." - Jean Kerr
IVA approved Aug 2008 - 6 year term - last payment made 6 Oct 2014. CC received 14 Nov 2014.
Hi Til, that was my point when speaking to our IP, if we hadn't taken the initiative to save and invest the creditors would have received nothing at all! We do not get overtime either as we receive a salary.
our savings are kept in premium bonds again with the hope of winning some money to get us out of this mess. the IP is fine with our money being kept in bonds and obviously if we won anything all of it would have to be paid. we could easily have just saved our money in the bank or in the house and they would have received nothing. As you say Til where is the motivation to make money. We certainly won't be doing it again, however we will still put our contingency in bonds as to be honest we would love to get a windfall and happily pay it back just to be free.
