Omar - the way your example reads of bob getting £150 bonus each month on top of his £1500 a month salary it wouldnt really be classed as a bonus, more a salary increase therefore bob would have to pay 50% of the £150 to the iva...£75. thats my understanding anyway!
Hi Omar and welcome to the Forum.
Your calculations are correct. However, few people get paid a regular monthly bonus as this would effectively be salary and treated as such in an I&E. Commission is normally paid monthly and dealt with under the 10% and 50/50 split but bonuses normally are not.
It is reasonable for creditors to have some of the bonus and allowing you to keep more than half is very fair. However, if you can convince your boss to pay your bonuses monthly, quarterly or twice a year, you may be better off.
10% plus 50/50 is better than nothing and we should all be prepared to pay back as much as possible to the creditors.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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I may be wrong because I don't have the 10% clause just the 50% of all additional clause in mine.
However I would have thought when calculating the additional they do it yearly.
Your first example he earns £18000 NET on his basic a year and his 12 £150 bonuses add up to £1800 which is 10% and therefore nothing extra to hand over to IP Company
Your second example of £2000 bonus but with no other additional income throughout the year would mean £1800 under the 10% clause and then 50% of the remaining £200 so you would have to pay the IP company £100.
This is my understanding and the most logical way of looking at it as they work out the 50% clause annually anyway.
Check with your IP if they work out the 10% monthly or annually cause if as I suspect they do it my way you are worrying about nothing
I have the 50% additional income clause but they review it annually on my P60 and anything above my declared income is taken into consideration. Is this 10% clause worked differently?
I think there is misunderstanding here. In your example you are saying £150 is 10% of the £1500 normally earnt so you pay nothing. That's not how it works.
You keep 10% of the extra so in this case 10% of £150 is £15 and 50% of the remaining £135 is £67.50 so in your example you would keep £82.50 and pay over the remaining.
Last edited by herbekj on Thu May 20, 2010 5:43 pm, edited 1 time in total.
Last Payment - November 2011 - Completion Certificate received 2 weeks after last payment, Removed from Insolvency Register within 4 weeks after last payment.
We have had this debate on the forum before and the wording provided was as follows (i dont have this clause so i am copying from someone elses conditions)
"The Debtor shall report any overtime, bonus, commission or similar to the Supervisor if not included in the original surplus calculation and where the sum exceeds 10% of the Debtor’s normal take-home pay. Disclosure to the Supervisor will be made within 14 days of receipt and 50% of the amount (over and above the 10%) shall then be paid to the Supervisor within 14 days of the disclosure. Failure to disclose any exceptional overtime, bonus, commission or similar by the Debtor will be considered a breach of the Arrangement and the Supervisor shall notify the Creditors in the next annual report with proposals for how the breach is to be rectified."
This statement allows you to earn up to 10% more a month than you have declared within your iva without making any additional contributions. You are required to pay 50% of anything above the 10%.
Looking at this clause it would appear that someone getting £150 a month on top of their salary on commission etc (using the £1500 normal monthly net in this example) retains it whereas someone who earns £2000 at the end of the year in one lump sum has to pay 50% of the £1850 over the allowed 10% for that month. I agree it seems unfair and the IP will have to advise you on their stance on it and whether they will average out the payments over the year or take it from that month alone.
Davey
Last edited by Daveyboi on Thu May 20, 2010 5:52 pm, edited 1 time in total.
I would have have to agree with you that based on that exact wording then a person getting an annual bonus is at a disadvantage.
Last Payment - November 2011 - Completion Certificate received 2 weeks after last payment, Removed from Insolvency Register within 4 weeks after last payment.
But surely the idea of entering an IVA is to repay as much to your creditors as possible, so I don't see how this is unfair - you get to keep some extra money, and more is paid into your IVA.
I would suggest emailing David Mond as he no longer posts on the forum.
