I have an IVA since 2006 and it runs out in January 2012. I have never missed a payment and have always sent documents for my yearly reveiws. At work we are being asked to take a 5% pay cut, but they will give a lunp sum as a sweetener suggested about £5000, I know that I have to declare this to my advisors, but my question is would they take all of the money. As I could do with a small amount to buy a new second hand car, to be able to get to work. Any answers greatly received.
Hi Denis - welcome to the forum. Sorry to read about the paycut, especially at this time of year. Your travel to work is essential to continue earning your income and if your current car is in need of replacement or will incur huge costs for maintenance, MOT passing etc then that should be a good justification for your IP to explain to the creditor why you need to retain a proprition. It is best to speak to them asap as they know your complete case and can best advise you on your specific numbers.
Let us know how you get on as other posters will find the outcome very useful.
Regards,
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Don't forget that by accepting the lump sum you will receive a 5% pay cut which means you have less money as disposable income hence less money to creditors so if they want the lump sum etc then reduce your IVA payments as they can't have it both ways.
Just a thought, depending on what you are expected to pay over the remaining term, could you not offer a full and final of all/part of the lump sum in conclusion of your IVA? Especially as you face a 5% reducton in wages.
Sus makes a very good point. Given you are quite a way into your IVA, there may well be an option to settle your IVA early with the lump sum your receive.
If this is not possible, you might be able to retain some of the money for a car but the lump sum will be treated as a windfall and you should expect to have to pay it into your IVA. However, this would go hand in hand with a review of your monthly payments which should be reduced if your income drops.
The best thing to do is have a chat with your IP and discuss all of the options.
This money is not a windfall - it is compensation for loss of some of your income and should be used to supplement that until it runs out. Your IVA payments should therefore be able to continue at the contractual rate, until this time when it may be possible to reduce your payments to suit your revised circumstances.
